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
From Kiplinger's Magazine: https://tinyurl.com/cvb6mpz
"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
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.
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:
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."
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."
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.
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.
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:
With Robert's input, the following conservative assumptions were made:
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!
Oxford, West Grove, Avondale, Kennett Square, West Chester, Coatesville, Downingtown, Cochranville, Unionville, Parkesburg, Exton, Frazer, Malvern.
Wilmington, Newark, Glasgow, Middletown.
Elkton, North East, Rising Sun, Chesapeake City.
(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.
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.)
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.
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.
Brandywine Village Network: http://www.brandywinevillagenetwork.org/
Net Care of Chester County: http://www.net-care.net/
Delaware Senior Resources Network