Encore: How to protect elderly loved ones from financial ruin

Last weekend, The Wall Street Journal published a column by Jason Zweig about Edith Berwald Steierman, an octogenarian who racked up $ 65,000 in margin debt in her brokerage account over the past 27 years — without realizing it.

It’s a column you should read if you have a relative who suffers from cognitive impairment or lacks financial sophistication, as Steierman admits.

While Steierman, a New Yorker, had received monthly account statements from her brokerage firm for years showing “she owed a relentlessly escalating pile of margin debt,” Zweig’s column reports that she wasn’t aware of the debt until recently.

The problem, according to Steierman, was too much paperwork. “These brokerages give you more papers than a stationery store. Who can understand it all?”

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If you suspect an elderly or financially unsophisticated relative may be having trouble keeping up with his or her financial affairs, there are a number of steps you can take.

Don Blandin, president and chief executive of the Investor Protection Trust, a nonprofit dedicated to investor education, says parents and adult children need to have conversations about the older generation’s finances. That way, their children will be better equipped to identify and resolve any problems that arise.

“You have to determine who you are going to trust,” he says, adding that parents should designate one person to take over in the event they need help — preferably by appointing that person to serve as power of attorney.

“If you have a child who is more organized or has more experience with financial matters, they may be well suited to the executive role,” he says.

Blandin, 66, says he has already instructed his two children, both in their 20s, to intervene in the event he “starts doing things that are different from the way I normally manage money. I told them to call me on it. If I lose money, it will affect them,” he says.

“Start talking early and often,” he adds.

But what if you don’t trust your adult children? After all, in cases of financial exploitation of the elderly, family members are often the perpetrators.


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