How to Protect Yourself from Elder Financial Abuse

The story in this video is not uncommon. Here’s another scenario:

If there were an award for Elder Abuse Prevention, Eva Smith would be a contender. Working with an estate planning attorney, she crafted a bulletproof plan to protect herself from being financially exploited by a family member. Here’s her story:

Eva hated to admit it, but she was concerned that her daughter Karen would try to take advantage of her after her husband Bob’s death. Karen had been unable to hold any job for longer than a few months due to her alcoholism. She had tried numerous times to play on Eva’s sympathies, but Bob always made sure to keep clear boundaries. Now that he was gone, it was up to Eva.

Securing your finances

To protect herself, Eva met with an estate planning attorney. Here’s the plan she and the attorney came up with to protect her from financial exploitation by Karen:

The attorney rewrote Eva’s Will and power of attorney documents, bringing them up to date.

  1. The attorney recommended that a financial planner join the planning team to assist her regarding investment and retirement decisions.
  2. Eva appointed the financial planner to be her power of attorney and required him to provide a monthly report of transactions to her attorney so that there was an independent person (the attorney) watching over the financial planner.
  3. The attorney created a Living Trust and requested her investment and bank accounts in the name of the trust. This registration limited information about, and access to, her money by Karen or any other relatives.
  4. Since Bob had handled all of their finances and paid the bills, Eva decided to use her attorney’s paralegal to help her with these tasks.
  5. With the paralegal’s help, Eva contacted Social Security and applied for survivor benefits to be direct deposited into her newly established individual bank account.
  6. The paralegal set up automatic bill pay for her mortgage, utility bills and other recurring expenses.
  7. She bought a shredder and made sure to shred any documents containing personal information.
  8. She rented a post office box that only she can access.

Hiring a caregiver

Since Eva had mobility problems and Bob had been her primary caregiver, she needed someone to help her with bathing, household chores and meal preparation. Karen said she would move in to help out. Eva declined, and at the recommendation of her elder law attorney, hired a geriatric care manager to create a plan of care, hire and manage the caregivers, whose backgrounds had been checked.

As an added precaution, Eva took an inventory of her valuables and photographed them. She placed her most valuable items in a locked drawer.

Seem far-fetched?

The fictitious story above is based on recommendations made in Consumer Reports’ article “Protecting Mom & Dad’s Money: What Do You Do When You Suspect Financial Abuse?” These may seem like extreme measures, but the statistics on elder financial abuse are alarming:

  • 76% of victims are between ages 70-89, living alone and needing some assistance
  • Women fall prey to exploitation twice as often as men
  • 60% of perpetrators were adult children
  • 80% of cases go unreported
  • The goals of the perpetrators were achieved through deceit, threats, and emotional manipulation

Source: MetLife Mature Market Institute, “Broken Trust: Elders, Family and Finances”

What do you do when you suspect financial abuse?

If you or someone you know needs protection from a financial predator, give us a call.  We have the knowledge, experience and track record defending individuals who are at risk, or who are already victims.

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