By Stella Knight, Attorney
Question: My widowed aunt lives alone in another city. She is in fairly good health, but I feel she may be an easy target for unscrupulous individuals. Recently, I learned that Aunt Penny withdrew a large sum of money to “help a friend.” Apparently, as my aunt’s neighbor tells me, this “friend” is a woman who works at the beauty salon where my aunt gets her hair done. The friend had fallen behind on her car payments and was in danger of losing her car. Aunt Penny has always been a kind-hearted woman, but I’m afraid this woman took advantage of her. I learned that last week the friend borrowed some additional funds – apparently, she needed the money to pay for her child’s summer camp. If this continues, Aunt Penny may not have sufficient funds to take care of herself. Plus, I doubt this friend intends on repaying my aunt the money she borrowed. How can I protect my Aunt Penny?
Answer: You have good reason to be concerned. Kindhearted individuals, regardless of their age, are always easy targets for the unscrupulous. However, several things concern me with regard to your aunt’s situation. First, assuming this “friend” is legitimately in need of the money, your aunt should have her sign a promissory note. This promissory note to your Aunt Penny should outline the amount borrowed and the terms of payment (amount of payment, date of payment, interest rate and when the debt will be paid in full). If possible, this note should be secured. It’s not too late to try to get something in writing.
Second, do you believe your Aunt Penny is competent? If so, opening the lines of communication and discussing a durable power of attorney or a revocable trust would be a viable option. These legal documents enable your aunt to appoint you (or another family member or a professional individual) to manage her financial affairs. By “turning over the financial reigns” to someone else, your aunt will no longer have daily control over her finances. This alternative may make it more difficult, if not impossible, for individuals to borrow money from her.
If your aunt could truthfully say she doesn’t control her finances, the pressure would be taken off her to deal with similar situations in the future.
If you believe your Aunt Penny is losing her mental faculties and is no longer competent to make her financial decisions, you may have to seek court intervention – a guardianship. General Guardianship means that you petition the Court to have your aunt declared judicially incompetent. Thereafter, you (or another individual) would be appointed guardian. A general guardian is a court-appointed fiduciary to manage your Aunt Penny’s financial and medical decisions. You may think this is an intrusive step to take. If you aunt is incompetent, your options are limited.
Remember that implementing either of these suggestions is for your aunt’s protection. As her nephew, you have a moral responsibility to protect your aunt from herself and unscrupulous individuals. Many times, older people are “easy target” for scams – whether it’s instant sweepstakes, telemarketers, repairmen or “friends.” It’s our moral responsibility to protect those that are vulnerable. It’s not easy, and you may experience some resentment from your aunt for “meddling in her affairs.” On the other hand, Aunt Penny may be grateful to you for taking the time and the interest in her.
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