Ask the expert: Protecting checking accounts for elderly parents
November 23, 2010
Q: My father is quite elderly and lives alone, but he is also fiercely independent. He doesn't have much money, but he does have several thousand dollars built up in his checking account, and I am concerned someone will con him out of his money. Short of taking over financial responsibility for his affairs -- which neither of us wants -- what can I do to protect him?
A: Protecting an elderly parent's financial affairs while respecting his or her desire to remain independent is a delicate balance, but there are some positive steps that you can take:
- Talk about your concerns. Perhaps broach the subject by finding a recent article about a case where a senior citizen was victim of a scam. Use that as a lead-in so your parent knows you don't think he or she is incompetent, but that your concern stems from the fact that there are many con artists around who target the elderly.
- Limit the checking account balance. Checking accounts are people's most frequent point of access to their money, and thus a point of vulnerability. If your parent has accumulated more money in a checking account than is needed to pay the bills, suggest transferring the excess into a savings account or money market account.
- Periodically review account statements. Make a habit of reviewing your parent's account statements for unusual activity. Don't necessarily look just for big withdrawals -- some scammers are patient enough to bleed money away in $50 increments over time.
- Make sure you parent hasn't opted in for overdraft protection. As long as their checking accounts have enough money to pay their bills, seniors can be safeguarded by not having overdraft protection. That way, if an account has been drained it will be immediately apparent -- as opposed to running up overdraft fees or triggering a transfer from another account.
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