- Make decisions that benefit the person for which the decisions are made.
- Act in good faith and with fairness.
- A trustee;
- A guardian;
- A conservator (protector of assets);
- An executor;
- An agent under the financial power of attorney or health care power of attorney; and/or
- A representative payee (someone who accepts benefits on the behalf of an impaired person and responsible for the management of benefits such as Social Security payments).
Quick Fact: The perpetrator of financial elderly abuse is usually someone close to the victim such as:
- Family members;
- Caretakers;
- Neighbors;
- Friends and acquaintances; and/or
- Health care providers.
Common Financial Abuse Schemes Unfortunately, there are many types of schemes used against elderly people. Institutional Financial Schemes
- Predatory Lenders – Lenders sometimes target elderly individuals to take out reverse mortgages even when it is harmful.
- Investments – Institutions and people looking for investors often target elderly people. This is commonly done by a family member as well.
- Stolen Identity – Many elderly people are not current on technology, processes, and abilities of people with respect to identity theft. They may not regularly check their credit reports and credit card statements.
- Home Repair – This usually starts with a phone call or a knock on the door. Sometimes the “contractor” will say they noticed some things that need repair and they will insist on money up front. Then, they leave without completing the work.
- Law Enforcement – A scammer calls and says the elderly person owes a fine. Another common technique is to call and say their grandchild has been arrested and they need bail money.
- E-mail – This is common to all age groups, but elderly people are especially susceptible. They get an e-mail that looks like it is from the state or federal government, which says they must provide identifiers (social security number, credit card information, date of birth, etc.). This leads to identity theft.
- Bank Fraud – A friend or relative takes the elderly person’s checks and/or bank cards and withdraws money for themselves.
- Threats – A caregiver tells the elder they will hurt them or a loved one if they do not pay.
- Neglect – Someone close to the elder threatens to withhold food, medication, or refuses to help with hygiene unless there is payment.
Did you know? According to the True Link Report on Elder Financial Abuse 2015, it is estimated that over $36 billion are fraudulently taken from the elderly every year.
Financial Abuse Prevention and Mitigation Elderly financial abuse is a scary topic, but there are things which can be done to prevent it. Planning is essential. A revocable living trust could greatly benefit an elder seeking to protect their assets while they are alive. This type of trust is unique because:
- It allows the settlor (the owner of the assets) to place assets in a trust to be managed.
- This type of trust can be changed or completely revoked if needed.
- Probate court can be completely avoided which means the estate will not be diminished by fees and court costs.
- Shredding all bank receipts, cards, and voided checks before throwing them away.
- Never pay taxes up front for supposed lottery winnings.
- Pay with checks and credit cards to create a paper trail.
- Do not be afraid to say “no” and resist financial pressure.
- Deeply consider who will oversee finances. Do not simply choose the oldest child or grandchild. Consider the person.
- Do not give up the home. Many times, the first instinct when trying to protect this asset is to sign it over to a relative.
- Avoid joint bank accounts. This greatly reduces the amount of control over the money within the accounts.
- A clergy member;
- An attorney;
- Your doctor;
- An officer at your bank;
- Adult protective services; and/or
- Your state’s Ombudsman office.