Elderly financial abuse has been around for millennia; the Old Testament chronicles it. In Genesis, Jacob deceives his blind father, Issac. While elderly financial abuse is far from new phenomena as our population ages, it is more far-ranging today. Due to embarrassment and shame, incidents rarely make the police files. Newer studies indicate financial shenanigans cost elders more than $30 billion annually.
Protect yourself. Give your advisors the name of a trusted contact who they can speak to should suspicious activity occur. Be aware the trusted contact could be the duplicitous party. Consider multiple contacts and set up a protocol where the advisor can flag suspicious transactions.
In-home caregivers are in a position to commit financial abuse. Caregivers can have more contact than family members. With access to ATMs, credit cards and checking accounts unscrupulous caregivers can drain accounts surreptitiously. Monitor an elder’s bank accounts. Frequent trips to ATMs is a tip-off. To prevent forgery, have all dividend, retirement and Social Security checks deposited electronically. Review grocery store receipts — cash withdrawals at checkout are a warning sign. Corrupt service providers can scam the elderly. Excessive fees for lawn maintenance, replacing HVAC units unnecessarily, or irrigation systems sold at a high premium are examples.
Everyone should have an updated power of attorney (POA). Properly used, a power of attorney (medical or durable) provides legal protection when an elder is incapacitated. However, powers of attorney can be used to benefit the holder of the power. Sometimes the holder can convert property to their name to circumvent a will. Having an incapacitated elder co-sign a loan is another type of exploitation.
Sometimes the elderly are isolated by caregivers. Examples include taking away cell phones, changing locks, failure to open the door and removing elders from their home. Isolation by caregivers is cover for a crime. If isolated, document the circumstances. They aren’t letting you in the home for a reason.
To help detect elder financial abuse follow these red flags from the National Adult Protective Services Association. If an elder’s financial documents or valuables disappear, take action immediately. In the words of Deep Throat, follow the money. Unexplained withdrawals or checks payable to cash are a dead giveaway something is rotten in the state of Denmark. Forfeiture of oversight where an amoral relative or new acquaintance “helps” with the finances is an indicator of dubious activity.
Ask questions if your parents always paid their bills on time, but now creditors start knocking at the door. It can get serious quickly, especially if there are foreclosure warnings or property liens. Other indicators include unpaid bills or utility disconnections.
Elder financial abuse is not simply a disaster monetarily, but can be a personal tragedy since the victims often trust the culprits.
Even though Buz Livingston is a fee-only certified financial planner this should not be considered personal advice. For specific recommendations visit online livingstonfinancial.net or at the office in Redfish Village, 2050 Scenic 30A, M-1 Unit 230.