Do you know what the most disturbing thing about elder financial abuse is?
It’s not strangers who steal from our elders. In fact, it’s much worse than that.
More than 60% of elder abusers are family members (spouses, adult children, etc.). And here’s the kicker…
Only 1 in 24 cases of elder abuse is ever reported to authorities.
That means that the problem is 24 times worse than what is reported. With elder financial exploitation costing Americans $28.3 billion each year, the time to start protecting elderly assets is now.
If you have aging parents or family members, you need to know how financial predators work. You need to know what steps you can take right now to protect your loved ones’ life savings.
In this guide, we’ll cover:
- Warning Signs of Elder Financial Exploitation
- Legal Tools to Protect Elderly Assets Before It’s Too Late
- How to Set Up Protective Barriers Against Fraud
- Steps to Take If Financial Abuse Has Already Occurred
Warning Signs of Elder Financial Exploitation
Here’s something most people don’t realize…
Elder financial abuse doesn’t typically happen overnight. While a big dollar lottery scam or bogus donation to a fake charity can happen in rare cases, the more common abuse starts small.
Slowly.
Someone works their way into the older person’s life and gains their trust. From there, the abuse can take many forms but generally gets worse over time.
Warning signs to look for:
Financial warning signs can be the easiest to detect. But only if you know what you’re looking for. Unexplained withdrawals from bank accounts, missing money, and sudden changes to spending habits should set off immediate alarms.
Social isolation is another red flag. Cutting an elderly person off from contact with family and friends is the number one thing abusers do. Creating isolation sets the stage for financial abuse.
Elderly people with cognitive decline are at particular risk. Nearly half of all elder abuse cases involve a victim with some sort of cognitive impairment (dementia, Alzheimer’s disease, etc.).
Behavioral warning signs:
- Confusion about their own money or possessions
- Fear or anxiety around certain individuals
- Sudden changes to wills or financial documents
- A “new friend” who seems overly interested in finances
The worst case scenario? The abuser is a trusted caregiver or family member. These individuals already have financial information and access. They are able to manipulate without as much risk of early detection.
Legal Tools to Protect Assets Before It’s Too Late
Power of attorney documents are the first line of defense.
This is where many people make a critical mistake. They wait too long to create a power of attorney or they select the wrong person. Make sure your power of attorney document is created while your loved one has clear mental capacity.
And make sure the person you name is 100% trustworthy.
There are various types of power of attorney you can create.
Financial power of attorney gives another person control over:
- Bank accounts
- Investments
- Financial transactions
This legal tool is critical for ensuring someone else can protect assets from exploitation.
Healthcare power of attorney is a separate document. This gives another person control over medical decisions. It is not directly related to financial protection but can help clarify authority in other areas.
Trusts can also provide protection of assets. When properly structured and funded, assets held in a trust are more difficult for financial predators to access. Get legal help with elder law issues to make sure your protective structures are set up correctly.
Here are some facts about trusts that most families don’t understand:
Trusts aren’t just for wealthy families. Assets of any size benefit from being held in trust. The key is to work with an attorney that has experience with elder law.
Revocable trusts are flexible but become more protective if changed to irrevocable status once cognitive decline is present.
How to Set Up Protective Barriers Against Fraud
Technology is your biggest friend or enemy when it comes to asset protection.
The good news is that some very basic steps can dramatically reduce risk of financial exploitation. The bad news is that most families never take these simple protective steps.
Bank account monitoring should be automatic. Set up transaction alerts over a certain amount. Most banks offer free text or email alerts for all transactions which can quickly catch suspicious activity.
Credit monitoring is another important step. Seniors are targets for identity theft and credit monitoring services can alert them to new accounts or credit applications in their name.
Additional steps to consider:
- Automatic bill pay to avoid missed payments that scammers target
- Regular review of credit reports to spot unauthorized accounts
- Avoid large amounts of cash that are easy to access
- Require more than one person to sign off on major financial transactions
Phone and mail filters can stop a large percentage of common scams from even reaching seniors. Simple settings for caller ID and mail screening can eliminate much of the fraudulent communication attempts.
The most effective protection plan involves many layers of security.
No one measure is 100% effective. Layering multiple types of legal protection, monitoring systems, and family involvement creates a much stronger defensive barrier.
Steps to Take If Financial Abuse Has Already Occurred
Speed is of the essence when elder financial abuse is discovered.
The sooner you take action, the greater the chance of recovering stolen assets and preventing further losses. The unfortunate reality is that many families delay, trying to handle the problem on their own first instead of immediately enlisting authorities.
Report the suspected financial abuse to law enforcement. Elder financial abuse is a crime. Filing a police report is necessary to create the official record needed to recover assets. Don’t be concerned about family relationships or embarrassment. Stop the abuse and protect assets that remain.
Financial institutions need to be notified immediately as well. Banks and credit unions have specific procedures for elder financial abuse situations and can freeze accounts or reverse transactions if alerted in time.
Document all evidence you can find:
- Bank statements with suspicious transactions
- Communications from the suspected abuser
- Legal document changes or account access
- Witness statements from anyone who observed suspicious behavior
Adult Protective Services is another agency that should be notified. They can provide additional resources and work with law enforcement to provide comprehensive protection for the victim.
Professional help is necessary for recovery. Elder law attorneys are aware of legal procedures for asset recovery and can work through complex financial systems to trace stolen assets.
Financial abuse can be devastating for elderly victims. It tears apart their sense of security and independence. Professional counseling and support from family is important for recovery.
Building a Support Network
Loneliness and isolation is financial predators’ best friend.
The most important prevention method is ensuring elderly people maintain strong connections with family, friends, and community resources. Regular contact makes it much harder for financial abuse to go undetected.
Trusted contact programs at financial institutions can provide another layer of security. This program allows banks to contact designated family members if they notice suspicious account activity for elderly customers.
Regular financial check-ins should be a normal part of every family’s care routine for elderly members. This does not mean taking control away from capable seniors, but rather it means being aware and checking in on their financial situation.
Community resources can be an added support:
- Senior centers can provide social interaction and scam education
- Volunteer check-in programs can provide regular visits for isolated seniors
- Financial institutions offer elderly-specific services and protection
Wrapping It All Together
Elder financial exploitation is a serious problem in America. Millions of seniors are victimized every year. The majority of abuse cases are committed by family members, and only a small fraction of cases are ever reported.
Proactive planning is the key to prevention. Legal protections, monitoring, and support networks put in place before a problem arises provides the best defense against financial abuse.
Remember these points:
- Create power of attorney and trust documents before cognitive issues
- Set up monitoring systems for bank and credit accounts
- Maintain contact and awareness of seniors’ financial activities
- Take immediate action if abuse is suspected or discovered
Don’t wait until it’s too late. Prevention is always cheaper than recovery. Many losses can never be fully recovered.
The elderly people in our families have worked hard to build their financial lives. They deserve protection from those who would prey on their trust and vulnerability. Take action today to ensure their assets remain safe and their dignity is preserved.