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CFPB Bulletin Offers Checklist for Elderly with Diminished Capacity
Wednesday, June 3, 2015 6:40 AM

As consumers age, their ability to manage money and other personal assets can become compromised, which has led to the Consumer Financial Protection Bureau’s latest bulletin, “Planning for diminished capacity and illness,” which contains strategies for the elderly and their caretakers to prepare for their financial futures.

“Diminished financial capacity” is used to describe the decline in a person’s ability to manage money and financial assets to serve his or her best interests, including the inability to understand the consequences of investment decisions.

The CFPB provides a checklist to minimize risks, which includes:

  • Organizing important documents, such as financial institution account information and statements, mortgage and credit information, insurance policies, retirement benefit and Social Security payment information, and contact information for financial and medical professionals;
  • Providing financial brokers, advisers and other professionals with trusted emergency contacts. Give the professionals what information can be shared with the emergency contact;
  • Considering creating a durable financial power of attorney. This gives someone the legal authority to make financial decisions; and
  • Considering giving a trusted friend, relative or professional a complete overview of finances.
  • The bureau also recommends several actions for caretakers dealing with those who may have diminished financial capacity:
  • Have an open conversation with the loved one about the steps listed above, as well as any other wishes they may have;
  • Understand any responsibilities if you are named to manage money or property;
  • Review and assess the riskiness of the individual's investment portfolio; and
  • Make any professionals aware of your role going forward.

World Elder Abuse Awareness Day is June 15. Find out more about it here.