In this episode of ThimbleberryU, we delve into the critical topic of safeguarding senior finances with Amy Walls from Thimbleberry Financial. The discussion highlights the importance of recognizing signs of financial exploitation among seniors and offers practical advice on how adult children can approach their parents about financial matters. We stress the importance of maintaining open, empathetic, and proactive conversations to prevent financial abuse and ensure seniors' financial well-being.
Amy starts by explaining the signs of financial exploitation, such as unexplained withdrawals, sudden changes in spending patterns, and alterations in legal documents. These warning signs might indicate someone is trying to gain control over a senior's assets. Isolation from family and friends, as well as the sudden appearance of new friends or caregivers with a strong interest in finances, are also red flags.
Approaching the topic with parents can be challenging. Amy suggests starting these conversations early, even before there are signs of trouble. Regular check-ins can help normalize financial discussions and reduce anxiety. Empathy is key—approaching these conversations from a place of care and support rather than control. Setting clear agreements about when and how to get involved can prevent misunderstandings and ensure everyone is on the same page.
For senior listeners, open communication with their adult children is crucial to prevent exploitation. Statistics show that a significant number of seniors experience financial victimization, and regular discussions can help identify and stop abuse early. Seniors should also ensure their wishes are clearly communicated to avoid misunderstandings and ensure their intentions are honored.
Amy provides practical steps for both seniors and their adult children to make these conversations more effective. Organizing important documents, developing a financial plan, and using technology to monitor accounts and automate payments are essential measures. Regular reviews with or without a third party can keep everyone informed and prepared for any financial or health emergencies.
As we wrap up, the emphasis is on the importance of technology and communication. Technology offers great tools for managing finances, and maintaining an open and ongoing dialogue is crucial for building trust and ensuring financial security. Amy encourages starting these conversations early and being empathetic and respectful throughout the process. For those needing assistance, financial advisors and lawyers can provide valuable support and mediation.
ThimbleberryU 115 - Safeguarding Senior Finances
Speakers: Jon Gay & Amy Walls.
[Music playing]
Jon Gay (00:03):
Welcome back to ThimbleberryU, I'm Jon Jag Gay. I'm joined as always by Amy Walls from Thimbleberry Financial. Amy, always a pleasure to be with you.
Amy Walls (00:10):
Jag, it's always great to talk to you.
Jon Gay (00:11):
And today, we're diving into a very important topic: financial exploitation of seniors, how adult children can approach their parents about finances, and why these conversations are crucial.
So, we'll start with the basics, Amy. What are some signs of financial exploitation that families should be cautious of?
Amy Walls (00:29):
Before I answer this question, this is definitely a conversation that I think is for adult children to be thinking about for their parents.
I think though that if any seniors are listening, it's also good to think about it from the perspective of those adult children and how they're trying to help. Because it can feel like they're trying to take away your independence. And in the vast majority of cases, that is not what they're trying to do. They're trying to be helpful.
Jon Gay (01:01):
Yeah, because on one hand, you've got the child feeling like, “Okay, I've got to take over, I'm the adult, and now I've got to take care of them.” And then the parent is like, “Hey, you're trying to take over my life” and it can get quite contentious. I'm sure you've seen it with folks in your life, I've seen it with folks in my life.
Amy Walls (01:15):
Absolutely. And it's not even necessarily that they're trying to take over.
Jon Gay (01:18):
But that's the perception, sometimes.
Amy Walls (01:20):
It's the perception that they are when they just want to make sure that just like their parents took care of them, that they can help take care of their parents if it's needed. And that they aren't in a position to be caught off guard and not know how to help when it's too late.
Jon Gay (01:40):
Absolutely. You don't want to be looking at the financial statement and say, what happened? It's beyond the point of no return, pick your cliche. Alright, let's get to these warning signs.
Amy Walls (01:47):
First thing, I'd say is unexplained withdrawals. Now, obviously, to recognize there are unexplained withdrawals, you'd have to have line of sight into something. So, this might be in some subtle messages. If there is line of sight, it's looking for it. Sudden or unexplained withdrawals or transfers from bank accounts.
Jon Gay (02:06):
And by line of sight, you mean being able to see the accounts?
Amy Walls (02:09):
Yes. This could happen behind the curtain if you don't have any idea of what the finances look like. But there could be subtle signs of this too. Basically, what you're looking for is unusual changes in spending patterns or financial activities. So, some of that might be visible just by being in the house. It might be some of the subtle things they say.
For example, someone making large purchases or donations that are out of character. Talking about hobbies, even that might be expensive or charities that they haven't had any interest or involvement in, could be some signs around that too.
Another one would be altering legal documents. It's important, every few years, check your legal documents, make updates. We want to make sure those are what people want them to be. If the situation doesn't really make sense, it might be a red flag. It could be a sign that someone is trying to gain control or influence over that person's assets.
Jon Gay (03:11):
That's almost like, “Oh, this nice neighbor that moved in, he's really doing a lot for me. Like I think I want to leave something to him,” stuff along those lines.
Amy Walls (03:19):
Yes: “I have a new caregiver that comes in and checks on me, I think they should get something.”
Jon Gay (03:27):
Let’s be clear, there are small situations where that might make sense, but if it's something drastic that's seemingly coming out of left field, that's worth digging a little deeper on.
Amy Walls (03:35):
Absolutely. Isolation is a red flag, and we know a lot of seniors may be isolated. So, this is isolated from family and friends, withdrawing from the people they’re around most.
Now, this could be from a couple things. It could be an abuser helping them isolate. It might also be them isolating because they might be embarrassed or ashamed. They have concerns, they don't know how to voice it, and so they're withdrawing themselves.
Jon Gay (04:11):
Okay.
Amy Walls (04:12):
And then we touched on this, but new friends or caregivers. Those new people coming into their lives that all of a sudden, have a really strong presence. They seem to have a significant interest, especially in finances and usually, in this case, it’s they're presenting themselves as being very helpful, but the intention just isn't genuine.
Jon Gay (04:36):
Yeah. For the sake of our conversation, we'll put “new friends” in quotes.
Okay. So, those are really important points. Let's move on to a more sensitive area. And this is the tricky part. How can adult children approach their parents about these concerns without causing distress as we started to allude to earlier?
Amy Walls (04:57):
Well, it's definitely a delicate situation. There are some strategies that can help. One, is start early. Talk about these things before there's a sign of trouble. Have it as early as possible be a conversation.
I think we can even take this to our much younger adult listeners, even before their parents are in a senior position. Maybe it's a family where parents don't talk about money, but as their children are maturing and taking over financial responsibility, financial adulting for themselves, the parents will talk to the kids about money.
For those listeners in that position where parents ask them about their financial situation, it might be a perfect time to start switching the script on that, so that the conversation is not one sided.
Jon Gay (05:51):
Makes sense.
Amy Walls (05:52):
That can be uncomfortable. And I know plenty of people who parents are like, “No, I always want my kids to be able to come to me. I want them to feel like they can talk about this,” but maybe they're not in a position actually to be helping their kids, which is the reason they want the kids to come to them, but they don't want the kids to know.
Jon Gay (06:09):
I know if I am out to dinner with my folks and I want to pick up the tab, there is a lot of push back there: “No, you're our son, you should not have to do that, we're your parents.” I just want to do something nice. I just want to pick up dinner but there's this larger issue of, “We're the parent, we're the provider, you shouldn't have to worry about our stuff.”
Amy Walls (06:28):
Back to how to handle this, because it is so delicate, just paying the bill is challenging. Having regular check-ins; what I mean by that is having a regular set time to have conversations around money so that it doesn't feel like you are putting someone on the spot or that they don't feel they're being put on the spot.
I regularly meet with many of my clients every six months. They know what to expect, a topic comes up, we need to deal with something, no big deal. But when something happens out of the blue and I call, they either know I'm just calling to chitchat or there's a moment of, “Oh gosh, what's the problem?” So, if something's on a regular schedule, anxiety can be reduced, stress can be reduced.
Jon Gay (07:19):
I like it.
Amy Walls (07:20):
I think approaching from a place of empathy more than anything else is so important. Helping them understand that you are caring for their wellbeing, knowing that you are trying to support them, not control them-
Jon Gay (07:38):
That's the key right there. Support, not control.
Amy Walls (07:41):
And so, I think one of those things with empathy, maybe something comes up, maybe an adult child and parents share a bill. And it's technically under the parent's name, and maybe parents forget to tell the kid for a month or two, “Hey, you need to pay this,” and then all of a sudden, it comes through and it's a bigger bill than what's expected.
That might not the time to try to talk to the parents about money because just the timing feels accusatory. Do it at a time when there isn't an issue that's happened where you need to talk about it.
Set some clear agreements. This goes back to starting early, having regular check-ins. But if you've got some agreements around, “When do you want us involved? How should we be involved? What do you want from us?” And on the flip side, “Hey, as the kid, I want to ensure that when you do need us involved, I'm involved early enough that it isn't a freak out moment.”
Jon Gay (08:46):
Exactly what I've been thinking here. Like you don't want to wait till something is on fire, you want to be able to prevent it.
Amy Walls (08:51):
Absolutely. And especially parents, if you're listening, your kids are busy, they may have their own kids, they've got work and professional life and hobbies and things that they're involved in. They care about you and your stress and helping you because they care is a stressor in their lives. So, being proactive is one way they can help manage that stress and you can help with that.
Here's a big one. Involving a third party; whether or not for our clients, for example, both parties are clients, the parents and the kids. Or one party is having a family meeting with a financial advisor that one of you works with, especially who the parents work with, or with an attorney.
And when I have these meetings, even though parents have given us permission to talk to the kids, if the parents are the clients, I'm going to talk to them about, “What are your boundaries that you don't want us to go into? Let's talk about this ahead of time so that I can respect those wishes and lead this conversation effectively knowing that we're not going to step on your toes.”
Jon Gay (10:07):
Got it. Amy, a moment ago you started to address the parent side of the equation. So, for our senior listeners, why is it important to talk with their adult children about the finances?
Amy Walls (10:18):
First, let me, I think address an elephant that might be in the minds of our listeners, especially those senior listeners. And that elephant is the idea, “this will not happen to me.” Interesting statistic is that about 20% of people aged 60 plus (and this statistic is available by decade and doesn't change materially from age 60 on) report some level of financial victimization each year.
Jon Gay (10:55):
That's staggering.
Amy Walls (10:56):
It is. But what's more staggering to me, is the reporting rate for those 50 to 59 is 27%.
Jon Gay (11:05):
So, that number's higher.
Amy Walls (11:07):
I don't know the reason why there is the discrepancy, and I don't know that it's been studied in a way that is available. I think it could be easy for someone to look at that number and say, “Well, 20%, I'm not going to be one of those people,” and if I'm 60 plus, I'm going to want to say we're just more aware.
But I think there could be a different correlation here. And it is that those 60 plus may not be aware of the exploitation or are too embarrassed or ashamed to report it.
Jon Gay (11:43):
Yeah, speaks to the importance of having open communication, right?
Amy Walls (11:47):
Yes. So, parents, it's important to have this open communication to help prevent exploitation. If it's happening to one in five people your age, then those regular discussions can help identify and prevent abuse.
Now, I share this, for example, in my team, we have monthly reminders around how to avoid hackers getting access to our systems. Monthly reminders, because things evolve and change, and the ideas evolve. It used to be not long ago that people thought, and a lot still do, that you can't get a virus by opening a PDF document. Well, you can. That's a shift.
The techniques and the strategies that people are using to exploit people changes and evolves. If you aren't paying attention to this, if you aren't spending time on this research compared to someone who's working as regularly on computers, is talking to people, hearing these stories, as a senior, you may not be as aware as your child of the ways that people are trying to do this.
Jon Gay (13:05):
I have tried to get my folks, if something looks fishy, I'm like, “If you're not sure, call me. Before you open something, I'm happy to look at anything for you. If something seems like you're not sure, I'm always happy to take a look.”
Amy Walls (13:17):
It's so important. Another reason for the open communication is so that your kids can help ensure your wishes are followed. We don't know what we don't know.
Brene Brown has the idea of the stories that we tell ourselves. When there is lack of information, we fill in with a story and that story may not match what you want. So, by having clear communication, you fill in the story you want the person to have versus the story they're going to tell themselves.
Jon Gay (13:48):
Alright.
Amy Walls (13:49):
And that story could be for good or for bad. And this could be not just about financial topics but healthcare decisions.
Another reason for open communication is being prepared for emergencies. Whether that's financial or health crises. What is your situation? Where are you at right now? How might someone fill in? And as we age, in six months patterns, things could change drastically. And so, having those regular conversations will help.
And then just to build trust. If, Jag, you and I outside of this topic need to work on something, if we don't ever talk about that thing and just do our stuff independently, we're not going to build trust between each other towards it.
Jon Gay (14:35):
The old group project. If there's no communication, the group project will fail.
Amy Walls (14:39):
Yeah, but if we're talking about it, we're going to work through difficult points, we're going to build that relationship so that you feel you can trust me, and I feel I can trust you. Or I'll say, whoa, this totally isn't going to work.
Jon Gay (14:53):
Alright. Amy, as we start to move on here. What are quickly some practical steps that both seniors and their adult children can take to make these conversations more effective?
Amy Walls (15:01):
Number one, organizing documents. I think I've mentioned before that my husband and I have a regular weekly meeting and finance becomes part of that topic.
Having things organized, knowing what it is so we can quickly run through things. In this case, that's having estate planning documents, wills, powers of attorneys organized, accessible. Knowing what the insurance policies are and bank account information.
And I think in many cases, it's giving that access. Maybe it's using a password vault and making sure that in the event that you pass away or unable to do things, that access goes directly to the kids if you don't want them to have access now.
It's developing a financial plan. Obviously, I'm a financial advisor and wealth manager, but having the kids be as aware of possible of what that plan is. And that should cover budgeting, investments, healthcare costs, estate planning.
Regular reviews, as we talked about. How can parents and kids come together with a third party or without a third party to go over those things.
And then I alluded to it, using technology. How can you use apps and financial management to track things to ensure things are being done effectively.
Jon Gay (16:20):
Alright. So, those are some broad strokes, Amy, but specifically, what can folks do day to day?
Amy Walls (16:24):
First, I'm just going to say technology. Online banking, that's important. Making sure that there's access, making sure bills are set up to be paid regularly. That's one of the big things I hear from seniors is missed payments, or I hear from kids — “I found out my parents are missing payments.”
Sending up things to be automatic as much as possible using apps, whether it's password vaults, shared access through bank information so that multiple people have access to see and just monitor what's happening. And like I said, regular check-ins, maybe people live far apart: Zoom, enough said. Zoom.
Jon Gay (17:04):
Alright, as we put a bow on this, Amy, you're right, technology really does offer great tools. What final advice would you give to our listeners about maintaining that open and healthy financial conversation within their families?
Amy Walls (17:14):
I have two that are at the top of the list. One is start early with these conversations and be proactive. Make it a norm to talk about as opposed to a taboo topic. Don't make it taboo with the people who you love.
Number two, be empathetic and respectful. It goes both ways. People are trying to help. It's about support, it's about love. If you need help with the conversation, get that help. Most financial advisors are going to be happy to help navigate and mediate this conversation as lawyers if needed.
And goes along with all of this is keep the conversation open and going even through the sticky points.
Jon Gay (17:56):
Technology and communication, the key takeaways today. I know Amy, you work with parents, kids separately, together. If anybody listening wants to talk to you about their financial situation, whether it's personally or for their family as a larger entity, how do they find you at Thimbleberry Financial?
Amy Walls (18:10):
They can give us a call at 503-610-6510 or by finding us online at thimbleberryfinancial.com.
[Music playing]
Jon Gay (18:20):
Great stuff, Amy. We'll talk again in a couple weeks.
Amy Walls (18:22):
Sounds good.
Jon Gay (18:23):
Securities offered through registered representatives of Cambridge Investment Research, Inc, a broker-dealer member of FINRA/SIPC. Advisory services through Cambridge Investment Research Advisors, Inc, a registered investment advisor. Cambridge and Thimbleberry Financial are not affiliated.
Discussions in this show should not be construed as specific recommendations or investment advice. Always consult with your investment professional before making important investment decisions.
Securities offered through registered representatives of Cambridge Investment Research, Inc, a broker-dealer member of FINRA/SIPC. Advisory services through Cambridge Investment Research Advisors, Inc, a registered investment advisor. Cambridge and Thimbleberry Financial are not affiliated.