Is a loved one of yours residing in a nursing home or an assisted living facility? If so, it’s crucial to be on the lookout for signs of physical abuse or neglect in these settings. Additionally, it’s vital to be aware of the potential for financial abuse.
Based on the current data, there’s a worrying trend indicating a sharp increase in elder financial abuse incidents over the next two decades. This form of abuse, including scams and fraud, is estimated to drain seniors of over $36 billion each year, with more than half of this amount lost through methods that are, unfortunately, considered legal.
Who Are the Perpetrators of Elder Financial Abuse?
The extent of elder abuse is deeply troubling, and more often than not, the perpetrators are individuals close to the victim. Research shows that two-thirds of financial crimes against elders are committed by relatives, friends, or other trusted individuals. The list of potential culprits is quite broad, encompassing:
- Family
- Care providers
- Supposedly trusted neighbors
- Acquaintances and friends
- Bankers/financial advisers
- Medical personnel
What Makes Seniors Susceptible to Financial Exploitation?
Approximately three-fourths of the funds in financial institutions are owned by those aged 65 and over. This wealth, along with their typically good credit, makes them a prime target for exploiters. Additionally, the elderly tend to be more trusting, and feelings of loneliness can make them more receptive to interactions with strangers who may have harmful intentions.
Seniors are also more likely to suffer from health conditions or disabilities, such as cognitive impairment due to Alzheimer’s disease, which can make them more susceptible to manipulation. This vulnerability exposes them to the potential theft of a wide variety of assets.
Forms of Elder Financial Abuse
Advocates for the elderly frequently discuss the following examples of financial abuse, usually committed by individuals known to the senior:
- Money or property theft
- Signature misuse
- ATMs or credit card fraud
- Check cashing
- Misusing decision-making authority
- Carelessly mismanaging funds
- Breeching promises of care
- Shielding seniors from access to their assets
How to Prevent Elder Financial Abuse
The following proactive steps can be taken to protect seniors from financial abuse:
1.) Encourage Open Dialogue: Foster an environment that enables elderly loved ones to talk freely about their finances. By ensuring they are comfortable discussing major transactions or financial changes, you can catch potential problems early on.
2.) Conduct Regular Financial Reviews: By frequently checking your loved ones’ financial transactions and bank accounts, you can be alerted to unusual activities that could indicate exploitation.
3.) Implement Legal Measures: Establishing a power of attorney (POA) can offer significant protection to seniors. A POA authorizes a reliable person to make financial decisions on the senior’s behalf.
4.) Create Trusts: Trusts can act as a safeguard for an elder’s assets and are managed by a trustee who provides additional oversight.
6.) Stay Updated About Scams: Seniors often fall prey to scams. By staying informed about the latest fraudulent tactics, you can protect your loved ones from such threats.
7.) Protect Personal Information: Personal details such as Social Security numbers, banking details, and credit card information should be securely stored and only accessible to trusted individuals.
8.) Encourage Regular Social Interaction: Regular social activities can help reduce the feelings of loneliness that often make seniors susceptible to scams. Encourage involvement in community activities or local social groups to foster a sense of belonging and safety.
By adopting these prevention strategies, you can significantly decrease the risk of your loved ones becoming victims of elder financial abuse.
Schedule Consultation Today!
We have shared some tips about things you can do on your own to prevent elder financial abuse, and we can do our part as well. When you choose our firm, we will help you establish a well-rounded estate plan that covers each and every one of your bases.
If you are ready to get started, you can set up an appointment at our Oklahoma City estate planning office by calling us at 405-843-6100. Additionally, you can reach our Tulsa location at 918-615-2700, and you can use our contact form to send a message to either location.
Since founding Parman & Easterday in 1985, Larry has led over 1,000 free, community-service education programs and helped more than 10,000 Oklahoma families go from putting off their estate plan to getting it done. His goal for every client is the same: to become the person their family calls "the one who took care of everything."
Larry is the author of three books: The Straight Shooter's Guide to Estate Planning; Estate Planning Basics; and Guiding Those Left Behind in Oklahoma. He served as Oklahoma's Secretary of State and Secretary of Commerce, and his firm is the only member of the American Academy of Estate Planning Attorneys in the state.
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