Protecting your parents’ money

Transcript of Interview: “Protecting your parents’ money”

Mike Barnes: I think one of the biggest fears that a lot of us have is Mom or Dad running out of money. Maybe because they didn’t invest well, invested poorly, or got scammed and they don’t have anything left. 

Kim Barnes:  There are so many different ways that that can happen. Today we’re going to talk to Todd Whatley, who is an elder law attorney and also just recently wrote a book about steering clear of pitfalls in your senior years to try to keep people from losing money unnecessarily. So thanks so much for being with us, Todd.

Todd Whatley: Hey, thank you very much for having me on today.

Kim Barnes: Where do we start as far as the discussion of helping our parents keep the money that they have or use it as wisely as possible?

Todd Whatley: Yeah, it’s just that in 25 years of working with older people, when we mess up, when we’re subject to a scam or make a bad decision, we can just work harder and make more money. But when you’re retired, if it’s gone, it’s gone. You can’t go out and make more money. It’s so important that this age group be careful, and I see so many ways that they are losing money unnecessarily. It just kills me. I’ve seen it over and over and over, so I decided to put it down in writing to show people here are some problems and here’s how to fix it.

Kim Barnes: What do you think is the most common way that people are losing money?

Todd Whatley: Probably the scariest is scams. This generation is so trusting. Back in their day, when the phone rang on the wall, they knew it was someone who knew them. They would pick it up, talk to them, and trust who was there. They’re still doing that, and there are people out there who are not trustworthy and are doing things to get people to lose a lot of money. But that’s not the only way. There are so many decisions that they make, and probably one thing, and this is coming up very soon, is the Medicare open enrollment. So many people are like, “I love my plan, it was a great plan this year, and I’m sure it’s going to be good next year,” and that is absolutely not the case. Every single year, people need to talk to their agent and say, “Here are my drugs, here’s what’s going on this year,” and see which is the best plan for you. It is absolutely okay to change plans every single year to get the best one. But there are people who have been on their plan for 15 years and they’re not changing, and it’s not a good plan for them. It might have been 15 years ago, but it’s not good now. Please look at it, re-evaluate it, and you can save thousands of dollars getting the right Medicare plan.

Kim Barnes: That’s something that we talk a lot about and will be talking more about, but I think the other thing to remember is don’t be inclined to switch by those people who call you on the phone to ask you to switch. Make sure that you’re talking to your Medicare agent or somebody who knows what they’re doing and is going to be able to guide you in the right direction because that’s another kind of scam.

Todd Whatley: Do not call the number on the screen, call your personal agent, talk to them.

Mike Barnes: You mentioned the word trustworthy. I think there are lots of things we can do to help protect our parents, but one of the biggest things is us getting involved and making sure that we know what Mom and Dad are spending their money on, where the money’s going, how much money they still have. But that involves trust—they have to trust us.

Todd Whatley: Yeah, and I speak all the time, and as an elder law attorney, the most important document you can do is a power of attorney for finances. You need to trust the person that you assign, but that person can then see what’s going on, can jump in, and take action. One of my chapters is estate planning to teach people what they need to look at, and not doing a power of attorney can result in the loss of their entire estate if they need long-term care. The Medicaid rules are there to protect you, particularly if you’re married, and I go into that in my book about long-term care planning and Medicaid and how it’s important to now, while you can still sign documents, do a power of attorney, do your will, do a trust if that’s necessary. I teach them that in this book and say go to the right person, get a person who knows what they’re doing, ideally someone who has worked with seniors and can tell you exactly what you need to do now so that you can take care of it later when you can’t sign new documents.

Kim Barnes: We have heard so many horror stories in our community about people whose parents have been taken, if you will, for lack of a better word, by someone they trusted or just someone that was very convincing and manipulative and got scammed, losing tens if not hundreds of thousands of dollars, which is, as you mentioned earlier, devastating when you’re not still working where you could try to recoup that.

Mike Barnes: One of the things that I found from my personal experience with my mom being scammed is that I had to be really careful once we knew that was what was happening to not sort of lose it and say, “Oh my gosh, Mom, what were you thinking? Why did you give out your bank account information?” Because what I found is that if I reacted in a way that made her embarrassed or ashamed that that had happened, then she might not tell me the next time or give me a heads-up that, “Hey, this person keeps calling me,” or that kind of thing. So I think that’s also pretty important, how you react as the adult child when something is going on, but obviously, the sooner you can get involved, the better.

Todd Whatley: Yeah, I see this all the time. People have been being scammed for years, and I’m like, “Why didn’t you say?” They’re like, “I was embarrassed. I knew this was happening. I didn’t know how to get out of it. I was just embarrassed.” It’s like, hey, these people are good. They are really, really good. There are some good fake emails out there that look just like UPS or FedEx, and we’re always ordering things online, so it’s like, “Oh, my package is hung up at the distribution center.” Click on that link, and it’s done. As soon as you click on that link, it’s a problem. There are so many ways. Another thing that I see is with investments—there are fees. Ask your investment advisor in dollars, “How many dollars am I paying in fees?” I see people that invested 20, 30 years ago, and it was okay then, just like with Medicare, it was good then, but is it good today? How much are the fees? They’re like, “Oh, it’s just 1%.” Well, 1% on $100,000 is $1,000. 1% on a million dollars is $10,000 that you’re paying, and there may be ways to save money there by getting into investments that are not as expensive. Get with your investment person and say, “What am I paying in dollars? How many dollars am I paying?”

Kim Barnes: That’s one of the biggest things I think we can do with our parents is make sure that they’re talking to the right people.

Todd Whatley: Exactly, talk to the right person. Back on families and scams, one of the biggest scams is family members. Chapter 10 of my book is “Family and Caregiver Relationships.” Make sure that you know the caregiver that’s in your house, be it a stranger or a family member, that they’re not taking advantage of them. You talk about someone really hiding—it’s when their kid is stealing money from them. It’s like, “Mom, I need a car payment,” or “I need this,” and it’s just like, oh my goodness, they’re being taken advantage of to the exclusion of the other kids. I encourage families to get together, sit down, and talk. Look at the bank account, see what’s going on, be informed.

Mike Barnes: What’s the first thing that we should do if we’ve never done any of this? Because of what Todd Whatley said, we’re a little nervous about Mom and Dad’s money. What’s the first thing you want us to do?

Todd Whatley: Power of attorney. Go to an elder law attorney or someone who understands Medicaid, understands end-of-life incapacity, things like that. Get a very comprehensive power of attorney so that someone that you trust and by law is trustworthy—they have a fiduciary duty to do what’s in your best interest under this power of attorney. Appoint someone to be able to look over your shoulder and just make sure things are going well. People are like, “I don’t want to do a power of attorney because I will lose my rights.” No, you don’t lose any rights by doing it. My wife is my power of attorney and I still practice law, I still do things. It’s just if I can’t do it, she can. Same thing with an older person. Appoint someone that you trust to be your power of attorney so that they can look at these things and help you not lose money.

Kim Barnes: How would you suggest having that conversation if you have a parent who’s been really independent, always taken care of all of their finances themselves, maybe haven’t had lots of conversations with you about, “Here’s how I’m investing,” or “Here’s maybe what I have coming in as my retirement,” those kinds of things? How do you have those conversations to help them see that I’m just trying to help, I’m not trying to be nosy? And in conjunction with that, we probably need a power of attorney.

Todd Whatley: Get a professional involved. Get my book. It says, “Hey, this happens to the best of us,” and go through the book together and see, “Here are some potential problems. Mom, Dad, are you having these problems? Is this going on? What’s going on here?” Keep those channels of communication open. Be very agreeable, work with them. I tell people anyone over the age of 18 needs to do a power of attorney. Even my kids, when they turned 18, they’re adults. If they were in a car wreck or they were off on vacation or doing something and something came up here, I need to be their power of attorney or someone needs to be their power of attorney so they can handle things. I always tell people, they think I’m picking on them. It’s like, “You think I’m incapacitated, so you’re telling me to do a power of attorney.” No, I tell everybody that. Everybody over the age of 18 needs to do a power of attorney. I’m not picking on you. You really need to do one because so many things are going on. You don’t get out as well. It’s difficult for you to get to the bank or wherever. Let someone else do this for you, someone that you trust and by law is trustworthy to do this for you. That’s the first step, and get informed.

Mike Barnes: What if you, even if you have that power of attorney, and yet your parents are still potentially making poor decisions, letting themselves be scammed? What do you do then?

Todd Whatley: I am not a fan of guardianships. I don’t like them because it truly does take the rights away from the older person and gives it to someone else. It’s open court, it’s humiliating, it’s just not a good thing. But sometimes, if a person—and I’ve had clients say, “No, I won that $20 million, I know I did, and I just need to send another $1,200.” It’s like, no, you’ve not won $20 million, I promise you. If you can’t get across to them and they continue to do things that are not in their best interest, ultimately you have to do a guardianship. I hate that, but there are times that it is necessary to jump in with legal authority and stop this from going on.

Kim Barnes: Hopefully, you can have reasonable conversations and help them see whether it’s the fees, whether it’s some donation requests that they keep getting over and over again. Because I feel like once you get on some of those lists, you just get even more.

Mike Barnes: What are some other ways that you see people potentially losing or overspending?

Todd Whatley: Just the Medicare stuff. That’s one thing that I see so much, and that time’s coming up. Please be careful with that. Identity theft—get your credit report. You’re entitled to get that once a year from each of the three agencies. I encourage people, get your credit report, see what’s going on out there, see who’s putting things on your credit history, and if necessary, shut it down. You can call the three agencies and say, “Look, no more credit. Do not extend any credit to anyone,” and that will shut this down too because there could be credit cards out there that you don’t even know about. They’re not going to pay them off, and they’re going to come after you because it’s your social security number. That happens a lot. Taxes—please seek the advice of a professional. Some people, their income’s so low, their assets are low, they’re not worried about taxes, but if you’re in a taxable situation, please get the advice of someone because there’s a lot of things out there as an older person that can protect you from paying those taxes. Some people say, “Oh, I’ll just give my house to my kids.” Well, that’s a huge issue on so many different levels, but there are some taxes that they’re going to have to pay that are easily avoidable if you get the right advice.

Kim Barnes: So much to learn, but your book is going to help us in a big way. We’re going to have the link below. Anything we should look out for in the book specifically?

Todd Whatley: Just please read it and look at any chapter. It’s not start at the beginning and go to the end. Pick out what interests you. If it’s identity theft or scams or Medicare, just pick that chapter and read it. Each chapter stands on its own. There are so many money-saving things in there that I’ve accumulated over the last 25 years. I’m excited about it, and I think it will truly make a difference in a whole lot of families.

Kim Barnes: It’s a great example of you don’t know what you don’t know, right? Until you look at some of the options of, hey, these are ways we could potentially save more money rather than overspending. That would be a great way to start.

Mike Barnes: Todd Whatley, thank you so much for sharing your knowledge and helping so many people.

Todd Whatley: Thanks for having me, appreciate it.

Mike Barnes: It’s just something that we need to know, and it goes back to what we always say—communication. Talk to Mom and Dad, talk about the power of attorney, talk about their investments, talk about everything so you know and can help protect them.

Kim Barnes: Have them be open to those conversations and feel like you’re on their side and trying to help them the best you can. Having knowledge and communicating with them about it and them sharing with us helps us be able to help them.

Mike Barnes: Remember, if there’s any other topic you’d like us to discuss, please let us know. Parenting Aging Parents.

*This transcript is auto-generated. Please excuse any typos or mistakes.