Keeping your assets safe is not an easy task because the future is unpredictable. It is even more arduous for seniors as they frequently face several challenges that may deter them from undertaking the proper steps and actions to protect their assets from being exploited. Explore our compiled list of useful tips and tricks to get your parents started with asset protection planning for seniors.
Asset Protection Planning for Seniors: Simple, Smart Moves to Help Older Adults Protect Their Finances
Asset Protection 101
Asset protection focuses on creating and implementing various forms of legal strategies and measures to safeguard a person’s assets from being seized by future potential financial abuse, lawsuits, foreclosures, creditors, legal claims, con artists, or thieves.
What does asset protection mean for seniors? While protecting assets is essential for everyone, regardless of their asset size, asset protection planning for seniors is all about ensuring that seniors will stay out of crises arising during their retirement. They have access to adequate financial resources to cover the costs incurred in later years, such as nursing homes, senior care services, medications, long-term care, insurance, etc.
Another significant reason why protecting assets for seniors is highly advisable is that they are often the targets of scams. In addition, asset protection is a great way to pass down assets to the next generation, such as children, grandchildren, or family members. Overall, asset protection helps seniors achieve greater peace of mind knowing that their life-long assets are preserved and distributed to their loved ones while avoiding potential legal conflicts like probate or legal judgments.
There are many different asset protection planning strategies, with insurance being the most basic pathway to prevent asset loss. Other strategies specialized for families, business owners, and people working in high-risk professions like real estate investors include setting up a trust to secure their hard-earned assets and minimize the risk of bankruptcy.
Tips & Tricks to Protect Seniors’ Assets
Educate Your Seniors
A 2014 study revealed that American seniors are more likely to become targets of financial exploitation, with one out of every 20 older adults falling victim to fraudulent schemes. Such crime is particularly concerning among seniors as it leaves the victims in a situation where they might face financial burdens due to little to no time for recovery. That’s why it’s always best to educate your parents and raise their awareness about potential scams. For example, some of the most common scams targeting seniors include lottery scams, phone call/internet frauds, healthcare/insurance frauds, funeral, and cemetery scams, anti-aging product scams, counterfeit prescription drugs, investment schemes, etc. In worst-case scenarios, help your parents report financial abuse to the police and ask for extra assistance to redeem the loss. Remember to keep your cool instead of shaming your scared and ashamed parents.
Watch Out for Signs!
Sadly, there’s nothing we can do to stop scams, but there are several signs and hints that you and your parents can watch out for to stay away from financial abuse. Remind your parents to hang up the phone or stop chatting immediately if the other side does one of the following:
- They ask you to buy prepaid cards.
- They inquire about your personal information.
- They offer deals and promotions that are too good to be true.
- They ask you to download software or click on suspicious links.
- They ask you to send them money for emergencies.
- They inform you about unpaid bills.
Hire A Power of Attorney
A power of attorney is an appointed person responsible for managing business and legal matters on a person’s behalf, in this case, seniors, who may lack an understanding of financial management. Most people believe that only people with massive fortunes need a power of attorney (POA). The truth is that a power of attorney can ease the anxiety in seniors dealing with the complexities of finances and assets, especially when they experience health conditions preventing them from making the best decisions for themselves, such as Alzheimer’s. While hiring a power of attorney might be costly, keep in mind that it doesn’t have to be someone with a solid background in law but anyone you and your parents can trust to hand over all legal affairs. Check our guidelines for getting a power of attorney for your parents here.
Encourage Estate Planning
Opting for estate planning is one of the best things your parents can do to keep track of their assets. Having careful estate planning in place serves as a backbone for the management of intangible assets and investments of seniors, providing them with a sense of security and control over their assets while structuring all aspects of planning and protecting their finances from possible abuse. It gives seniors peace of mind, knowing that their valuables are safely organized and managed in the best way possible. Estate planning is relatively complicated, so it is best to hire a professional to make a comprehensive estate plan for your parents.
Set Up A Trust
Since seniors are at higher risk of financial harm, trusts emerge as an essential tool in asset protection planning for seniors. Creating one or multiple trusts is one of the best ways to preserve your parents’ valuable assets and possessions, such as homes, money, stocks, bonds, and a business, from mismanagement, fraud, creditors, and taxes. Such trusts are best for shielding assets from shady individuals as they can only be modified, accessed, or terminated upon the named beneficiaries’ permission. When establishing a trust for your parents, some must-do steps include making a list of holdings, getting all the paperwork ready, and talking with your parents about choosing the beneficiaries.
Keep Track of Account & Credit Reports
Did you know that even tech-savvy people could be the victims of shady financial traps? Seniors are no exception; actually, they are more susceptible to fraud than other age groups. Monitoring banking accounts and credit reports might be a hassle for many seniors due to many things. For example, they simply don’t have time or energy to go through pages and pages of reports to dig out any suspicious statements made against their will. That’s why keeping a close eye on your parents’ bank accounts for any unusual banking activities, such as large purchases, is another step you can take to ensure your parents’ assets are safe from financial exploitation before it hurts their pockets and credit scores. Be sure to get help from siblings and other family members to help notify you about any fishy activity in your parents’ account balances.
If you have questions about asset protection planning for seniors or any topics discussed here, connect with us and learn more.
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