Elder Financial Abuse: How to Protect Yourself and Loved Ones
Unfortunately, elder financial abuse is an escalating problem in America. Millions of senior citizens deal with abuse every year.
According to the American Banker’s Association, people ages 50 and older control more than 70% of the nation’s wealth. Which means fraudsters are trying new tactics to take advantage of retiring baby boomers and older Americans.
Here are some signs of elder financial abuse and how to protect yourself and loved ones.
Signs of Financial Elder Abuse
You might have heard of scammers trying to call and gain personal information, but financial elder abuse can be harder to detect. The perpetrator can be someone close to the family, or someone you know. This person might be a new romantic interest, friend, family member, or paid caregiver.
Exploitation can include theft, fraud, misuse of a person’s assets or credit, or use of undue influence to gain control of an older person’s money or property. Stay on alert for these signs of financial elder abuse.
Fraudulent signatures on financial documents
Forgery, or false signatures, involves the falsification of information on a document. Keep a close eye on important documents, such as bank account titling information or real estate documents. Be sure to regularly evaluate who is allowed on your bank accounts, and be wary if someone attempts to add themselves to your account. It’s always a good idea to regularly check your financial documents to ensure the only people with access, are the ones you allow.
If someone else is responsible for handling your finances, be on guard if you receive notices about unpaid bills. This can include evictions, foreclosure notices, bills past due, or receive an alert of utilities being discontinued, despite having sufficient funds.
Unusual or sudden changes in spending patterns, altering a will, or other financial documents
Stay on alert for a change in your loved one’s established financial patterns. It’s always a good idea to keep up-to-date with current and long-term bank statements to monitor for unusual changes. Be aware of any caretaker, relative, or friend who suddenly begins conducting financial transactions or changes financial documents, like a will or trust.
New joint accounts
With a trusted family member or friend, joint accounts can make it more convenient to handle your banking business. Since joint accounts allow the same ownership over the account, an untrustworthy person could take advantage of the situation. Also, be on the lookout for anyone encouraging you to change the type of account you have, especially if you don’t need the additional features.
Unexplained credit cards
Look out for unusual credit card bills for which you didn’t apply. Be sure to shred any credit card offers, and order a copy of your credit report annually to ensure it’s correct. A good resource for checking your credit score is by visiting AnnualCreditReport.com.
Giving money to family members, "new friends," or caregivers
Unfortunately, the people closest to an ageing loved one can be more likely to commit financial crimes. Checks made out to family members for “gifts” or “loans” are red flags to look for when checking bank statements. As well as attempts to wire money, or large withdrawals or transfers from bank accounts.
There are two different types of financial scams targeted at elderly people.
- One is “predatory,” which purposefully and directly attempts to scam someone. This can be someone calling you, pretending to be a grandchild in need of money.
- The other type is “opportunist.” Unlike a direct scam, an “opportunist” will simply take advantage of the situation. For instance, if they have easy access to an elderly person’s financial tools, like checks or an ATM Card. They may try to use an elderly person’s ATM or Debit Card without permission. Or if they have Power of Attorney, trying to use the victims’ funds for their own needs.
Six Ways to Protect Yourself
Be aware of the risks
The factors known to increase the risk of elder abuse are social isolation and cognitive impairment. In other words, if someone tries to take away contact between you and society, and confuse you. As we get older, it can be more difficult to remember certain things. As an elder, it’s important to stay engaged and socially active. It’s more difficult to take advantage of someone who is always in contact with family or trusted friends. Don’t make it easy for a person to isolate you socially.
Resist being pressured
You shouldn't let anyone pressure you or rush you to buy something, sign a document, or give your money away. Rather than giving in to the pressure, suggest speaking with trusted friends, families, attorneys, or bankers. Taking your time to better understand the situation can keep your finances and information safe.
Be selective with joint accounts
As mentioned previously, joint accounts provide the same ownership over an account. Be selective with whom you decide to share a joint account with, so this person doesn’t end up draining your bank accounts. If you’re considering using a joint account to pay for your finances, talk to your trusted banker or financial advisor. These people can offer alternative solutions, and are trained to identify potential elder financial abuse.
Make financial decisions with the help of a trusted advisor
A crucial step in preventing elder financial abuse is involving multiple parties in helping you manage your finances. With your advisor involved, a professional is overseeing and also looking for any possible problems. Some financial advisors act as a fiduciary, which is someone who must act in your best interest. Consider your relationship with your financial advisor, and make sure it’s the right fit for your needs.
Consider setting up a Revocable Trust
A revocable trust is helpful in providing flexibility and income to the living grantor (you!). The grantor can revise or revoke the trust terms without needing consent of anyone else, like beneficiaries. If necessary, the grantor may appoint a successor to control the trust. As long as you are living, you retain control of the trust. Upon your passing, the estate will transfer to your beneficiaries.
Execute a durable power of attorney
Estate planning can be easier with a durable power of attorney. A durable power of attorney authorizes someone you choose to handle certain financial or health matters. It’s important to remember your finances are accessible by the person with durable power, so choose someone you trust. Also, be sure to provide copies of all transactions and statements of investments, banking, and credit cards to your financial advisors. If the power of attorney is “durable,” it will remain in effect in the event you become incapacitated, like illness or an accident.
How to Report Elder Financial Abuse
Talk to your loved ones or family if you notice any of these signs, or if you are suspicious someone is taking advantage of you. Report elder financial abuse to your bank, so your banker can make sure your accounts are protected. Your banker can go over your accounts to make sure the right people have access, and help prevent any additional exploitation.
In addition, you can contact Adult Protective Services in your area for help. It’s also important to report all instances of elder financial abuse to your local police. If there’s fraud involved, the police should investigate the situation. Reporting instances of elder financial abuse can help protect someone else in the future, and also protect your or your loved one’s finances.
Above all, remember you are not alone and if something feels “off” or “too good to be true,” it’s important to trust your instincts. Remember to never give out your Social Security number, account numbers, or other personal information unless you initiated the contact.
As always, we’re here to help you with your finances. If there’s any way we can help you, or if you have any questions, please don’t hesitate to contact us.
- Elder Financial Abuse, Nursing Home Abuse Center
- Protect the Elderly from Financial Exploitation, American Bankers Association
- Revocable Trust, Investopedia
- What Is a Durable Power of Attorney?, Legal Zoom
- Eight ways to protect yourself against elder financial abuse, USA Today
- Get the Facts on Elder Abuse, NCOA
This information is not intended to be a substitute for specific individualized advice. Neither LPL Financial, nor its registered representatives, offer legal advice. We recommend you discuss your specific situation with a qualified attorney or legal advisor.