Virginia Beach, VA (Law Firm Newswire) May 31, 2016 – Diminished capacity can have a detrimental effect on a person’s investments. A decline in an individual’s financial capacity means that a person can no longer manage their money and financial assets, and is unable to comprehend the ramifications of investment decisions. When people lose the ability to manage their finances, they may become susceptible to investment fraud and other types of financial abuse.
However, there are steps people can take to avoid or reduce the likelihood of problems for themselves and their families. For instance, they can organize important documents, and place them in a secure location that is easily accessible. Distribute duplicates to family members and loved ones who are trustworthy, or inform them of their location.
Andrew H. Hook, a prominent Virginia elder law attorney with Hook Law Center with offices in Virginia Beach and northern Suffolk, states, “When individuals lose capacity, and are no longer able to manage their finances, there should be safeguards in place that designate a trusted person to make financial decisions on their behalf.”
Compile a list of bank and brokerage accounts along with their account numbers. Maintain a separate list of passwords and PINs for online bank and brokerage accounts, and keep them in a safe place. Additionally, compile a list of where any safe deposit boxes are located along with the location of their keys. Furthermore, make sure that recent bank and brokerage statements are available, as well as information concerning ways in which to access such statements online.
Moreover, individuals should compile a list of debts and regular payments, along with account numbers and the names of the financial institutions that provided the loans and credit cards. Other significant documents include insurance policies, pension and other retirement benefit summaries, information regarding Social Security payments, and contact names and numbers for financial and medical professionals.
People should also provide their financial professionals with emergency contacts of persons they trust. In the event the investment adviser is unable to reach the accountholder, and suspects that there is a problem, the adviser can call the emergency contact. Also, they should have a discussion with the adviser about what constitutes an emergency, and state under which circumstances the adviser can communicate with the emergency contact.
As an added safeguard, think about establishing a durable financial power of attorney. While a financial power of attorney grants someone the legal authority to make financial decisions on behalf of another person if the person cannot make such decisions, a durable financial power of attorney remains effective in the event the person becomes incapacitated.
It might also be helpful for people to confide in a trusted friend, family member or adviser about the general state of their finances. For instance, they can request that their bank issue duplicate statements to their relative or adviser. It is important to keep the adviser apprised of any changes, such as a new account, or a new emergency contact. And in the event that there is any suspicion of fraud, do not be afraid to report it.
Hook Law Center
295 Bendix Road, Suite 170
Virginia Beach, Virginia 23452-1294
5806 Harbour View Blvd.
Suffolk VA 23435