Preventing Elder Financial Abuse
Elder financial abuse is one of the more uncomfortable issues that seniors and caregivers have to deal with and it’s more complex than trying to make plans for their finances after they’re no longer with us. Unfortunately, this is also an issue that touches more than a quarter of a million elderly people every year. With numbers like that, it doesn’t matter how uncomfortable or complex – it’s a conversation that needs to be had.
As email and Internet awareness becomes more prevalent in our elderly population, so do email scams and other Internet based ploys that con artists employ to fleece their elderly marks. We’ve all seen the emails from the Prince of Nigeria and most of us can instantly recognize it as a scam but unfortunately there are still a lot of older Internet users believe that it’s a real opportunity.
Fortunately investment firms, wealth advisors, even skilled nursing facilities are turning their attention to the issue. Recently Wells Fargo Advisors went on tour to raise awareness about financial abuse in the elderly population among elderly participants, their caregivers and people who work in the aging fields.
Unfortunately, financial abuse doesn’t just happen as a result of a scam or a con artist with a flashy smile. Many instances of elder financial abuse comes by the hand of those who they think are closest to them. Friends and family members who they think have real needs or are acting in their best interest are too often the ones perpetrating the abuse – and far too often these cases go unprosecuted and unpunished.
So how can you prevent your elderly loved on from being the victim of financial abuse? Here are a few things that you can do to help Mom, Dad, Grandma or Grandpa from losing their financial ability to live independently:
Designate an Emergency Contact
More than likely you have a power of attorney designated but typically they can only act on your loved one’s behalf once they’re incapacitated. Think about setting up an emergency contact with the different financial firms where they have accounts. Places like banks, investment houses, etc, need to be authorized to discuss concerns if they suspect some form of extended fraud or a one time scam.
Plan for Gifts
One of the major areas of financial abuse in elderly populations is having their power of attorney make gifts on their behalf while they’re still alive. Make sure that you’ve detailed exactly what powers your power of attorney has when it comes to finances. Particularly in cases of lower and fixed income seniors, gifting can drain an account incredibly quickly without setting off any typical fraud or tax alerts.
Keep it Simple
Seniors early in their retirement may enjoy managing their same diversified portfolios, regardless of the complexity, but it can become incredibly overwhelming as they age. Any situation where money might be overlooked is a perfect target for fraud and abuse so it’s best to encourage simplification earlier than later. Moving from five accounts to two, for example, will make it much easier to keep an eye on where the money is and how much there is of it to last through their golden years intact.
As mentioned before, this is an incredibly complex issue and one that’s not easy to talk about. For many seniors, their finances are one of their main footholds of independence and giving up control or taking advice in the matter isn’t something that most will want to do. However, the numbers speak for themselves and cannot be ignored.