How To Avoid Elder Financial Abuse

Financial abuse of the elderly could include financial exploitation and criminal fraud, but a surprising 45% of elder financial abuse cases in 2011 were caused by the manipulation of a senior citizen by a trusted family member, friend or neighbor. This type of abuse that capitalizes on taking advantage of a trusting relationship to get money accounts for $6.67 billion in annual losses.

“At least one in 10 elders is exploited,” says the founder of the Elder Financial Protection Network, Jenefer Duane. With the growing population of senior citizens comes the increased risk of your loved one becoming exploited financially. Here’s how you can prevent your loved one from becoming a statistic.

What To Look For

Although any senior citizen could be at risk, most victims have cognitive conditions, identify as being very friendly individuals, and suffer from poor memory. Women are nearly twice as likely to be victims of elder financial abuse than men, and college-educated seniors are just as susceptible to lose money to trusted family and friends as those who are not, especially if they exhibit financial sophistication.

The perpetrator can be a family member, paid caregiver, family friend, or trusted lawyer or financial adviser. Financial fraud can range from something as small as borrowing money from a forgetful elderly family member to obtaining a loan in an elderly’s name.

How to Protect Your Loved Ones

This type of abuse isn’t always easy to detect and oftentimes goes unnoticed or unreported. Although incidents of elderly financial abuse or fraud by trusted individuals are fewer than incidents by strangers, loss incurred by trusted individuals exceeds loss incurred by strangers. Either way, it’s imperative to protect your family with proper preparation.

Here’s how you can start:

Gather decision makers- The earlier you can gather a group of your family and friends to come to an agreement about your loved one’s finances, the better. Don’t let the responsibility fall on a single person. Have everyone agree on options to avoid later conflict.

Complete legal documents- Help your loved one complete estate planning documents like wills and living trusts with careful consideration. Your family should also create a financial and medical Power of Attorney – someone appointed to make decisions in case of illness or disability. Include trusted family, friends, and financial advisers on any decisions. Keep completed documents in a safe place that you can reference if need be.

Check for inconsistencies- Trust your instincts. If something doesn’t appear to be on the up and up, look into it. Check your loved one’s finances on a regular basis either online or request courtesy copies from the banks. Pay special attention to irregular spending, deposits, cash withdrawals, and any other changes that you are unfamiliar with. Communicate with your loved ones’ bankers to see if they have any concerns about your family member’s account. It is also advisable to run a credit check on your loved one to see if there any irregular credit accounts have been opened.

Regulate caregivers- Set guidelines for caregivers through personal care agreements. If a caregiver should need to be hired outside of the family, be sure to go through a trusted agency that is bonded. Also, don’t hesitate to install security cameras and devices to ensure your loved one is protected.

Find the right people to help- Throughout this process, you’ll find that legal and financial advice from a trusted third party will become invaluable. Hire the right professionals like an elder law attorney, care manager,  and/or a certified financial planner to help you determine the best plan for your family. If you feel like a family member or close friend has already been the victim of fraud or financial abuse, you should immediately contact Adult Protective Services (APS), and get the help of an elder law attorney.

Be involved in elder abuse prevention- Multiple legislative actions have occurred in an effort to not only educate the public about elder financial abuse but also prevent it:

• Passage of the Elder Justice Act in 2010 which requires that the Department of Health and Human Services manage resources aimed to protect senior citizens from different forms of elder abuse.
• In 2010 the Office of Financial Protection for Older Americans was created as part of the Financial Regulatory Reform Bill.
• The White House hosted a World Elder Abuse Awareness Day event in 2012, focusing on elder financial exploitation.
• The recent creation of the Elder Justice Website by the Department of Justice as a way to educate families, victims, attorneys, etc. on financial exploitation of the elderly, and provide tools for how to recognize and address a financial abuse situation.
• In 2015, the White House Conference on Aging made elder justice one if its main priorities, acknowledging the need to protect the growing senior population.