Here are some tips on preventing elder financial abuse.
What does the London subway have to do with financial abuse?
I recently took my first trip out of the country since pre-pandemic. I went to London. The weather was fabulous, the sites were inspiring, and the food was delicious. And we walked miles and took the London Underground subway (“mind the gap”) everywhere.
While riding the subway I saw several signs that struck me as concerning, from a financial advisor point of view. One sign advertised getting money now from your pension plan so you could travel or do home renovations. Another sign advertised taking a loan against your home to cover your bills or other expenses. Both of these signs concerned me from a financial point of view because these type of actions could result in negative financial implications down the road.
This made me think about who might fall prey to this type of advertising, and that led me to thinking about financial elder abuse.
What is financial elder abuse or exploitation?
The National Council on Aging estimates that “elder financial abuse and fraud costs to older Americans range from $2.6 billion to $36.5 billion annually”.
Financial elder abuse or exploitation can take many forms. One way elder financial abuse can occur is through a scam perpetrated online or via phone. A friend of mine recently uncovered such as scam occurring to her father, who had cognitive impairments. She happened to visit while he was on the phone with a stranger, reading off numbers from a stack of prepaid Visa cards he had bought for this purpose.
Another type of elder financial abuse is when a person takes advantage of the elder in person, through accessing their accounts, asking for cash, or taking belongings such as silver, artwork, or other valuables from their home.
How can we prevent elder financial abuse?
There are several actions that can be taken to help prevent elder financial abuse or exploitation. AARP has a great list of some of these options, here (link opens in new tab).
Investment accounts have begun asking for a “trusted contact”, which is a person that can be reached if there is a need. This is not only beneficial for elders, but for anyone who wants to designate someone to be listed.
Establishing a financial power of attorney is another option that could be beneficial regardless of your age. Typically estate planning attorneys will provide financial and healthcare power of attorney documents along with a will and estate plan. But if you don’t have these documents already established, contact your estate planning attorney to work out what is best for your situation.
If you have a loved one in your life who’s elderly, keep in touch with them and stay informed about what is going on with them. Talk to them about any concerns you have.
Have more questions?
Your personal financial advisor can help you in your particular situation. The above is informational only and is not intended as investment advice or as a personal financial recommendation.