Are You Seeing Signs of Cognitive and/or Physical Decline in Mom or Dad?

 

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Not sure what to do or how to  proceed?  At Principled Money Management LLC, your financial concierge,  we can help evaluate  the economics around quality home care, assisted  living, skilled nursing and we can guide you to a professional Geriatric  Care Manager if that is a better outcome.  Give us a call if the need  is in Delaware, southeastern Pennsylvania or Northeast Maryland.  


Common Signs of Elderly Financial Exploitation

Among the warning signs:

• Money or property is missing.

• Unexplained withdrawals from bank accounts, frequent ATM use or large wire transfers;

• Unable to pay normal bills;

• Bank statements or bills stop arriving in the mail;

• Purchases of merchandise or services that seem unnecessary;

• Names are added to bank accounts that they’re unable/unwilling to explain

• Unusual gifts to caregivers, family members or a new “best friend;”

• Changes to beneficiaries on a will, life insurance policy or retirement funds;

• A caregiver, friend or relative suddenly begins handling the money without documentation of the financial arrangement

Source: Consumer Financial Protection Bureau

A Great Read:

Protecting Mom & Dad's money:  What to do when you suspect financial abuse

From Kiplinger's Magazine:  https://tinyurl.com/cvb6mpz

References

"I have known George professionally for several  years. Recently, my husband and I hired George as a financial consultant  as we plan for retirement. We were extremely pleased with the  expertise, suggestions and plan that George prepared for us. I would  highly recommend George."  

                          -Elizabeth Adams, Community Liaison at Willow Tree Hospice, August 2, 2013

***

"I heartily recommend George and Principled Money  Management LLC for anyone who could use assistance in organizing and  managing their finances.

I have found George and his company to be honest,  trustworthy, and very efficient in the manner in which they conduct  their business.  The manner in which he communicated and the detailed  reporting that he has provided on a regular basis always gave us a  feeling of comfort and confidence.  Not only was the bill paying  extremely efficient, but George intervened with health care agencies and  credit card companies on my mother’s behalf and negotiated very  favorable payment terms.  His efficiency kept our fees to a minimum and  was excellent value."

 -Frank M.; Chester County, PA

***

"I am very pleased with George’s services as my financial counselor.   Though he simply shrugs off my comments by saying, "I’m just doing the  job for which you engaged me," he does more than is required. 

 Over the years, I have handled my investments almost all by myself.   However, the fast-paced market and the associated high technology tools  needed to keep up with it make it difficult for me to cope.  George  worked with me to find a Financial Planner to restructure my investment  portfolio.  Since I have worked with him, I have done well in a  difficult investment climate.  The allocation of my investments is now  quite appropriate for someone of my age.  There is significantly less  volatility in my portfolio.  Finally, the management costs of my  portfolio are significantly reduced relative to what I was paying  before.  Principled Money Management LLC has worked with me to keep my  daily finances organized and within budget.

 I am much more confident going forward.  The only regret I have is  that I did not work with George before 2008, when every broker thought  what followed would simply be just a "bump in the financial road"  instead of the major recession that ensued."

 - Horst K.; White Marsh, MD

News

This is from the office of Consumer Credit Commissioner in Austin Texas:

 In recognition of Financial Literacy Awareness Month, the Office of  Consumer Credit Commissioner (OCCC) will be posting "Financial Facts" on  ways to prune, preserve and plant money saving seeds.

§         Only a quarter of Americans feel well informed about managing household finances.

§         Between 25 and 56 million Americans do not have a bank account.

§         98% of banks responding to a Consumer Bankers Associations'  survey said they sponsor financial literacy programs and/or support  such efforts through partnerships.

§         Young adults between 20 and 24 represent the fastest growing segment of bankruptcy filings.

§         The average credit card debt among graduate students who carry cards is $7,831 per student.

§         43% of parents believe that schools should be doing more to educate kids about money.

Case Studies

Talking to Mom About Alzheimer's and Her Money

Ruffenach on Alzheimer's impact: lost money, damaged credit, even foreclosure.

By GLENN RUFFENACH


Increasingly, my friends and I -- most of us in our mid- to late 50s  -- are starting to see the same thing: elderly parents who are grappling  with memory loss and finding it difficult to manage their finances. And  most of us, I'm learning, are making the same mistake: We're waiting  too long to act.

The numbers are scary: One in eight Americans age 65 and over and 43  percent of individuals 85 and over have Alzheimer's disease. Every 69  seconds, on average, someone in the U.S. develops the illness. But  financial advisers and accountants, when asked about their experiences  with clients who have memory loss, invariably raise the same concern:  Elderly parents and adult children alike are too slow to seek or provide  help in the early stages of decline.

"Denial is a big part of it," says Ron Kelemen, a certified financial  planner with the H Group in Salem, Ore., who has seen the problem  firsthand. Parents, hoping to stay independent, typically are quick to  minimize difficulties; adult children, hesitant about meddling, may  ignore red flags. The consequences, says Kathleen Michon, an attorney  and editor at Nolo, a provider of legal information and products, can be  dire: closed accounts, damaged credit, money lost to scam artists --  even foreclosure.

I asked financial advisers to highlight the warning signs involving  memory loss and money management, as well as how to broach the issue  with elderly parents and what steps to take. Here are some of their  thoughts:

Red flags

Amy Charles, a senior vice president and financial adviser at  Pinnacle Financial Partners in Nashville, remembers visiting her father  -- and overhearing him give his debit card number to a caller on the  phone (purportedly, from a political campaign). Shocked, she warned him  against sharing financial information with strangers, but soon learned  why older adults, in particular, are disposed to listen and agree to  requests for help. "It's a way to stay involved with the outside world  and feel like you're still making a difference," she explains.

But unusually large numbers of phone solicitations and mailboxes  stuffed with donation requests are two signals that parents might need  help, Charles says. Other indicators: checkbook mistakes; unpaid bills;  and desks and drawers, once neatly organized, now scattered with  paperwork.

"Can we talk?"

Broaching the issue of financial assistance with parents is difficult  enough; waiting until problems have arisen all but guarantees conflict,  says Kiki Brink, a former college professor who worked with dementia  patients in hospice settings before starting her own  personal-administrator service in Salem, Ore. "If you suddenly step in  and take control, without any prior give and take, parents feel  belittled," she says. But "if you get in early, you haven't taken away  their dignity."

Several strategies can help. Michon suggests that adult children and  parents -- before memory loss sets in -- agree on "triggers" that might  signal a need for help (for example, a notice that an account is in  arrears). At the same time, both sides can settle on a plan that lets  parents and children work together if such an event occurs.

You can share news articles with parents about scams targeting older  adults -- and ask to monitor their accounts for signs of abuse, says  Charles. Or you can tell them about steps you've taken to safeguard your  own finances and ask if they have similar plans. Sometimes, the  simplest approach is best, says Brink: Point out that, as they've aged,  they've likely allowed others to help with tasks like yard work or home  repairs -- and that "there comes a time when we all need a 'personal  secretary' to help with money."

Diving in

If your parents are willing to accept help, the critical first step  is to ensure that they have essential documents: a will, a power of  attorney and health directives. Consider, too, the benefits of a living  trust, says James Kane, a tax lawyer in Atlanta. With a power of  attorney, you're acting "simply as [your parents'] agent, and some third  parties will balk at dealing with an agent," he notes. As a trustee,  though, you could take direct control, if need be, of a parent's assets.

An increasingly popular -- and less hands-on -- option is a service  called "daily money management." Pros who offer it can sit with a parent  at home and help pay bills, balance checkbooks and file medical claims,  among other tasks (a list of such managers can be found at the website  of the American Association of Daily Money Managers, aadmm.com). Be sure  the managers are insured, bonded and willing to include other family  members in their work, says Vivian Wright, president of Common Sense  Solutions, which offers money-management services in Atlanta: "If you  aren't asking to review what a manager does, that's a big mistake."

With luck, your parents will act on many or all of these things  before you do. Adviser Kelemen recalls a client who, with his wife and  daughter, walked into Kelemen's office and asked to have his name  removed from all his accounts. "He knew his memory was slipping, and he  didn't want anyone to take advantage of him," Kelemen says. "That takes a  lot of courage."

Understand Your Cash Flow

Principled Money Management LLC  recently encountered a dual income family of four: the husband working  for the county, the wife a part-time counselor, a 21-year-old son still  in college, and a twenty-something daughter working in a fashion  boutique. In spite of the home having been paid off a number of years  ago, the family was still over $100,000 in debt, and their debt was  steadily growing. They were asked to keep a log of everything they spent  for a month.

A month later, they sat down and reviewed  the details of how they spent their money. They were shocked. The son  was spending $12/day at Starbucks or about $3,000/yr, the daughter spent  $1,200 on clothes that month, some of which will only be worn once. The  husband spent $140 on cigarettes, and they were spending $550/month  dining out.

We then analyzed the wife's income as a counselor, and she realized that she hadn't raised her fees in over five years.

After this rude awakening, they realized  that there were plenty of areas in which they could cut back spending  and get their finances back under control. In addition, the wife met  with each of her clients and informed them that her hourly rate was  going to be raised 25%.

Keep a log of your expenditures for a  month, and then see where you might cut back. This simple exercise has  the potential to produce significant savings. When considering expenses,  try calculating the future value of the money spent if it were invested  instead. Use this calculator:  Spending Investment Calculator. You can see that if this family simply reduced dining-out expenses by half, they could generate over $33,000 in 10 years.

Helping Elderly Parents Cope

The adult son of an elderly woman in Chester County needed help managing his mother's finances. He was referred to Principled Money Management LLC by a business colleague who was aware of our services. The mother's  cognitive abilities had declined to the point that she wasn't exercising  good judgment with regard to her financial decisions. She was spending  significantly more than she could afford on questionable expenditures,  unable to reconcile her records, and incurring expensive bank fees due  to multiple overdrafts. Because of his extensive global business travels  and time commitments, her son was unable to deal with the situation on  his own.

The Principled Money Management LLC representative met with the son and proposed a plan to solve the  problems. Since the son already had a general Power of Attorney, we set  up a new joint checking account into which he had his mother's  retirement income directly deposited. All of the mother's bills were  sent to her in care of the Principled Money Management LLC mailing address. The Principled Money Management LLC manager established online access to the new account and paid the  bills. Each month, the son was provided by email a checkbook register  report, a cash flow report, and copy of the bank statement. Once the  situation was being managed by Principled Money Management LLC, there  have been no missed payments, no overdraft fees, and no questionable  expenditures. This client has only incurred fees for an average of 1  hour each month, and his problem has been completely resolved.

Build a Long-Term Plan

Robert, a recently divorced 58 year-old man with no children, approached Principled Money Management LLC for help with his long-term financial plan. He had never worked with a  financial planner but knew he needed a real perspective of his financial  future.

Robert called Principled Money Management LLC to set up an appointment. To prepare for the first meeting, Robert  needed to complete a questionnaire that listed his assets, liabilities,  current income, living expenses, anticipated pension income, expected  retirement age, and tax information. This financial inventory made the  first meeting much more efficient, enabling Robert and the Principled  Money Management LLC manager to create a preliminary plan.

Robert wanted to retire at age 62, only four years away. His financial inventory revealed the following:

  • Current salary
  • Anticipated Social Security benefits
  • Pension
  • Effective tax rate
  • Current savings
  • Current value of his 401(k) plan, the fraction of his salary that he contributes, and the amount matched by his employer
  • Current value of two rollover IRAs, to which no further contributions were planned
  • Current value of his home
  • Balance and terms of his mortgage
  • Current living expenses

With Robert's input, the following conservative assumptions were made:

  • Salary will increase at the same rate as inflation
  • After retirement, his effective tax rate would be reduced
  • Robert sells his house at age 68 to move into an apartment with an assumed rent
  • Two major expenses expected within five years: new roof and a new car
  • Medical expenses will increase 6%/year
  • Living expenses decrease 10% at age 65 and another 10% by age 80
  • Rate of inflation of 3%
  • Rate of return on investments of 5%

Adding our assumptions to the financial  information Robert provided, we saw that Robert would be out of money by  age 86. Because of his good health and family history, he wanted to  cover his needs until at least age 95. Thus, Robert had a problem. By  adjusting his retirement age (sorry, Robert!) as well as his living  expenses, we created a plan that has a high likelihood of his remaining  remain solvent until age 95.

We reviewed Robert's 401(k) and IRA  accounts and realized he had no real investment strategy. He was  unlikely to achieve the assumed rate of return without incurring  unnecessary risk. We referred him to a financial planner, with whom we  work closely, to design a personal allocation strategy suitable for his  circumstances. Finally, we recommended to Robert the purchase of a  long-term care insurance policy.

Robert now feels quite comfortable with  his long-term personal financial plan because it is based on his actual  income combined with conservative assumptions for the future. This  comfort gives him confidence and allows him to face the future with  peace of mind. Kudos to Robert for taking the step that made it possible  for him to sleep at night!

 Locations Served

Chester County, PA:

Oxford, West Grove,  Avondale, Kennett Square, West Chester, Coatesville, Downingtown,  Cochranville, Unionville, Parkesburg, Exton, Frazer, Malvern.

New Castle County, DE:

Wilmington, Newark, Glasgow, Middletown.

Cecil County, MD:

Elkton, North East, Rising Sun, Chesapeake City.

Daily Money Management Services Keep Seniors Independent

(adapted from Chicago Tribune, June 8, 2011)

Think of all the day-to-day tasks that involve our money from paying  the bills and balancing the checkbook to giving to charity, filing  insurance claims, managing investment income, and more.  It's too much  for many seniors, especially when you factor in memory issues,  arthritis, failing eyesight and hearing.
 

If you or a relative  is having trouble paying bills and managing life's paperwork, hiring a  daily money manager or a bill paying service might help maintain  independence -- and protect nest eggs too.

Get help
 

Daily money managers are part of  an emerging profession, says Mindy Luebke, the Chicago president of the  American Association of Daily Money Managers.  Money managers are not  exclusively for seniors.  Wealthy individuals have used them for  generations.  However, over the past 10 years, some have tailored their  services to helping seniors at home with money management and the  associated paperwork and mail.
 

"This service is very much in  demand, as the younger generation does not always live in the same area  as their parents," says Amie Hyman, owner of Heartfelt Solutions for  Seniors, Inc., in Willow Springs, Illinois.  Hyman is a licensed social  worker who began doing money management professionally five years ago.   She realized the need after moving her mother to Illinois from  California.  “She needed everything done for her," Hyman says.  "I spent  hours and hours."
 

Like Hyman's mother, many older people just  can't do this anymore, she says.  "It becomes overwhelming when the junk  mail, doctor bills, and Medicare statements start to pile up.  They can  forget to pay a bill, or they are late and incur fees," Hyman says.   "Once I have the proper permissions, I can set up automatic withdrawals  and monitor the transactions, write checks, manage the bank deposits,  transfer funds from one account to another, negotiate on their behalf  with creditors, and deal with their medical insurance company."
 

Some people simply do not know where their money is going anymore,"  Hyman adds.  "A daily money manager can prepare a budget with them.”   This allows the senior to maintain control, with help.
 

 Unfortunately, fraud and scams are a big problem with the elderly and  their money.  Having a professional looking over the senior's shoulder  (and into their checkbook) can prevent catastrophic loss.
 

"I  once had a client who was an inch away from sending her checking account  number to a foreign entity," Hyman says.  "I can also spot red flags,  such as numerous ATM withdrawals when the person is homebound.  A  caregiver or a family member is often the abuser," she adds.
 

 Like any service, costs vary.  Hyman's fees range from $35-$100 an hour,  depending on what type of work she is doing.  (She also does medical  advocacy, where she attends doctor appointments and emergency room  visits with the senior.)
 

Other options
 

For those who don't yet need at-home scrutiny of their mail, but would  still like the convenience of having their bills paid automatically, a  company like Principled Money Management LLC might be a good fit,  because it also caters to active adults.
 

Clients have their  bills sent to the company, which pays them on the client’s behalf.  If  there are insufficient funds in the client’s account or a mutually  managed escrow account, we notify the client beforehand.  In addition,  if a bill goes up a certain percentage over a three-month average, our  software catches it.  We can even help small businesspeople work with  us, so the landscaping company or the trash collector can get paid by  us.

Principled Money Management LLC charges a modest hourly rate,  which usually results in costs lower than what most banks will charge  for this service, if they even provide such services at all.
 

A  bill paying service is perfect for snowbirds.  Our typical client is  someone in their 70s or 80s, retired, and may have a second home in  Florida.  They have worked very hard and built up a nice nest egg.   Using a daily money manager is one way of eliminating some of their  concerns.  It also dramatically improves their credit rating.  The last  thing they want to do is create a problem by paying a bill late.
 

Get help
 

To find a daily money manager or bill paying service, go to www.aadmm.com/findDMM.php.   Type in your ZIP code and view a list of people in your area.   Alternatively, call the Association of Daily Money Managers at  877-326-5991.

In Chester County PA, New Castle County DE ,or Cecil County MD, call  Principled Money Management LLC at 484-748-0021 or 302-545-7763.

 Related resources

Brandywine Village Network: http://www.brandywinevillagenetwork.org/

Net Care of Chester County: http://www.net-care.net/

Delaware Senior Resources Network

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