Elder financial abuse
You probably know to look out for things like identity theft and scams like con artists soliciting money over email. But, there’s another threat you need to be aware of. It’s called elder financial abuse—and it’s often perpetrated by people you trust, such as caregivers, friends, or even family members.
“Since these are the people closest to the seniors, they are the ones who have the greatest opportunity to commit abuse,” says New York attorney Tanya Hobson-Williams (thobsonwilliamslaw.com). “People in these confidential relationships often prey on the sympathies and generosity of the senior to gain their trust.”
Elder financial abuse can take many forms. Relatives or caregivers might manipulate older adults, particularly those suffering from memory loss, into giving them money. Or, people who have access to an older adult’s accounts might simply steal money.
Pennsylvania wealth manager Jonathan Maula (smayinvest.com/our-team) says people can perpetrate elder financial abuse by pressuring an older family member to take on their debt or opening credit cards in the older person’s name without their consent.
“The most common [form of elder financial abuse by a relative] is confusing or pressuring an elder member of the family to sign a will turning over assets upon death, or even while they are still alive,” Maula says.
What you can do
You can protect yourself from being taken advantage of by a caregiver, friend, or family member by hiring a financial advisor to oversee your affairs. Maula also recommends simplifying your accounts, perhaps moving them all to one bank and only keeping one credit card.
“Keep stuff simple, in a way you understand now, so things do not get confusing later,” he says.
Hobson-Williams says having the appropriate advance directives, such as a power of attorney, in place before you need them is key to preventing financial abuse as you age. She also says that caregivers should undergo a criminal background check or be hired from an agency that bonds its employees.
“There are also independent agencies and financial advisors that seniors can contract to provide bill payment services on behalf of the senior and to manage their assets to ensure they are protected,” Hobson-Williams says. “Family members should check on their senior family members regularly to look for signs of potential elder financial abuse.”
Enlist someone who you know for certain you can trust to help keep your finances safe from other relatives, friends, or caregivers who could try to manipulate you. David Reiss, a professor at Brooklyn Law School, says the Consumer Financial Protection Bureau recently issued a report for financial institutions on preventing elder financial abuse. The report outlines some of the warning signs, which you and the people who care about you should look out for.
“If a senior has a previously uninvolved relative or friend take an active role in his or her financial activities, it could be a sign that that person is attempting to exercise an inappropriate influence,” Reiss says. “If the senior appears fearful or anxious around that person or overly excited about financial opportunities involving that person, it should raise additional concerns.”