Today, we want to focus on one of the major risks of not being “in the know” when it comes to your parents’ estate planning matters: How To Protect Your Parents From Undue Influence.
It’s an unfortunate fact that predators emerge during times of upheaval to take advantage of people. That means the COVID-19 pandemic can leave your parents vulnerable in more ways than one. But even when things go back to normal, there will still be a risk of financial exploitation.
We see it happen far too often. Maybe your elderly parents live several hours away, in another state or country, and someone in their community gets close to them. Or maybe they have a close relationship with a financial advisor who isn’t really looking out for their (or your) best interests. This person could even be another family member, friend, business partner, hired caregiver, professional advisor, or even someone they’ve just met.
We see it happen far too often. Maybe your elderly parents live several hours away, in another state or country, and someone in their community gets close to them. Or maybe they have a close relationship with a financial advisor who isn’t really looking out for their (or your) best interests. This person could even be another family member, friend, business partner, hired caregiver, professional advisor, or even someone they’ve just met.
Sometimes, when bad actors become involved with your parents’ lives and assets, it can lead not only to a loss of money, but even a loss of personal freedom. One of the worst cases of this I’ve heard of is the case of Mark, a retired veteran living in Arizona, and his son Steve, who lived in Colorado. It all started when Mark asked Steve to help him protect his small amount of money from a family member who was “borrowing” it freely. All Mark had was a savings of $150,000 and payments of $3,500 per month from social security, a pension, and veteran’s benefits.
To help his father out, Steve applied for guardianship of Mark’s money, and the court granted it to him. At the same time, without notifying Steve, the court appointed a professional financial Conservator that neither Mark nor Steve knew. The Conservator quickly set to draining Mark’s small savings, with the court barring Steve from filing any more motions.
The situation escalated even further when the Conservator decided to move Mark from his assisted living facility to a cheap lock-down facility, where he wouldn’t even have access to the outdoors. This would, of course, free up more money for the Conservator to access. Before this could happen, though, Steve hurried to pick his father up and bring him back to his home with him.
Now, the two are essentially on-the-run from authorities, who are trying to bring Mark back to Arizona and under the control of the Conservator. Mark and Steve are out of funds and are now trying to raise the $15,000 it would take to hire a lawyer and free Mark from this terrible situation.
The scariest part is that Mark and Steve had all the proper legal documents in place. Sometimes, though, that is not enough to protect your parents from being taken advantage of—even to this extreme of a level. Especially in a time of stress and confusion like the Corona virus pandemic we are currently living in, it is vital to be vigilant and get the best possible counsel to avoid something like this happening.
This isn’t meant to make you paranoid or distrustful of the people around you, or of how your parents handle their own lives. Well, maybe it is a little. Mostly, though, it’s a call to encourage you and your family to be aware, educated, and empowered in knowing what risks are possible for your parents, and for your future inheritance.
Look Out For The Following Actions We Have Seen From Influencers:
Preventing important communication between family members;
Withholding documents from other family members;
Encouraging financial gifts or economic benefits to recently-met connections (usually in the same network as your parents’ “new friend”);
Naming recently-met connections as attorney-in-fact (under a financial power of attorney), or as a joint owner on financial accounts, real estate, and other assets; and
Giving financial advice that may not be in your or your parents’ best interests, but rather in the interests of the advisor.
We recommend you start talking with your parents now about how they want their affairs to be handled. Also, you should immediately investigate any situation where you suspect your loved ones are being taken advantage of. There have been too many cases of financial abuse or inappropriate influence where family members are too late to stop the bad actor.
Ideally, you know the value of your parents’ tangible assets (i.e.,home, car, business, stocks) and intangible assets (i.e., generational stories, personal relationships, theological legacies). Additionally, you should be working with an advisor to help you understand how family dynamics and the law will impact you, and everything that matters to you and your parents, when they’re gone.
If you’d like our assistance in considering your parents’ affairs, and how you can be in a position to support them when they need you, contact us. We can help. This article is a service of Brian Musell.
We don’t just draft documents; we ensure you make informed and empowered decisions about life and death, for yourself and the people you love. That’s why we offer a Strategy Session, during which you will get more financially organized than you’ve ever been before, and make all the best choices for the people you love. You can begin by calling our office today to schedule a Strategy.Post navigation
