Limiting Access to Financial Accounts to Stop Financial Scam - What is AARP doing to help

[BarryS926264]

My parents are now in their 80s. We want to restrict their access to their IRA and Trust accounts to prevent them from being scammed of their savings. Schwab told us there is no legal way to limit their access (online, phone, or mail) because they are the legal owners of the account unless they are declared incompetent. They have a local bank savings account where we keep a few thousand for daily expenses.

1. I would like AARP to push for legislation to allow family members to help their older parents protect them from financial scams.

2. what are you doing to help your older parents from financial scams?

[GailL1]

@BarryS926264 

This is already covered in our legal system. Schwab is correct in what they told you.

The owner of the account has the ability to appoint a person or institution to act as their Power over their financial affairs.  A Power of Attorney can do everything an owner can do - they are charged with acting as a good steward to the funds of another.

The Power needs to be established BEFORE the owner of the financial account has cognitive decline.  If their mental abilities are compromised then the court can appoint a guardian or conservator to act on their behalf.  

If they are making the decision, they can pick anybody or any institution they want.  If the Courts are making the decision, then it is up to the courts to appoint the best person or institution for the job - 

The person appointed as power of attorney can be family or trusted friend if the beneficiary is making the decision.  

If the Court is involved, a family member / friend can petition the court for this assignment of guardianship or Conservatorship.  This is if the beneficiary has cognitive decline.

Banks often perform this function under a specific type of Trust agreement.

I have long had a Power of Attorney.  The person I have picked to act as my power of attorney is trust-worthy, organized and knows generally now where my income and assets lie.  The way mine is worded, I can assign them the power to act on my behalf in a specific account or transaction - and that’s it.  Then if there comes a time when I cannot act on my own behalf, I can either let them just take over or if I cannot at that time, they can present evidence from my doctor that I can no longer handle my affairs and the power will be activated at that time by the courts.

If they still have the ability to make decision,y our parent should see a lawyer to set this up and if they don’t already have them also do a Will and healthcare directive in addition to the power of attorney.  The state where they live have specifics on how all of this has to be done - an eldercare attorney or a family attorney can usually hand all of these

Once this is done, each financial institution under which they have an account has another form to fill out and sign that the financial institution can keep on file as to how the power is applied.  

Also to deal with any Social Security benefits, the Power has to assigned by becoming a Representative Payee of the benefits - 

SSA.gov - Representative Payee Program  

In fact, SSA would like for any beneficiary to appoint someone to act in this capacity on their personal Social Security account.

[GAKKIEZ]

@BarryS926264 At what age do you feel oversight is needed?  Should it be linked to mental competency (which it already is)?  

How do you protect from family members taking advantage of these accounts? (There are many examples of family members being financially abusing of these accounts or withholding assistance because an older family member 'can pay for it'.)