You are back home celebrating the 4th of July holiday with your elderly mother. She has always bought fireworks for the grandkids, but this year she is hesitant. When pressed, she acknowledges that money is just a little bit tighter this year. As far as you know, nothing has changed in her financial situation, so what gives? After much cajoling, your mom allows you to take a look at her most recent statements. After you look, you can’t decide whether you should yell or cry, a few thousand dollars each month are going to various “charities” and “businesses” that are really just out to scam vulnerable people out of their hard-earned money.
Unfortunately, the situation above is all too common, and if you have not yet experienced it with someone you love, you can consider yourself one of the lucky ones. While elder abuse encompasses various forms, in this blog we will primarily focus on financial issues. Its prevalence is alarmingly high, necessitating effective strategies to prevent and address this problem. In this blog, we will explore the warning signs, factors contributing to abuse, practical tips to implement, and lastly, the role a trusted advisor plays in mitigating the impact of elder abuse.
Warning Signs of Elder Abuse
Recognizing the signs of abuse is crucial in order to intervene and protect vulnerable elders. Some common indicators include sudden and unexplained changes in their financial situation, such as depleted savings or frequent, large cash withdrawals. Other signs may include unauthorized or suspicious transactions, changes in legal documents or beneficiaries, and the presence of new individuals who exert undue influence over the elder's financial decisions. Additionally, seniors who display a sudden reluctance to discuss financial matters or seem confused about their own financial affairs may be victims of financial abuse. It is essential to remain vigilant and address any potential signs of financial elder abuse promptly to ensure the financial well-being and security of our older adults.
Factors Contributing to Elder Abuse
Understanding the factors that contribute to elder abuse can help us address the root causes. Social isolation and loneliness play a significant role, as isolated individuals are more susceptible to exploitation. Dependence on caregivers may lead to power imbalances and potential mistreatment. Cognitive impairments can make older adults more vulnerable to manipulation. Additionally, we see that older individuals who are most charitably inclined seem to be a particular target for the scum that prey upon our elderly population.
What Can be Done?
Like many other things in finance, there is no best one-size-fits-all approach. However, below are some practical tips that you may be able to implement.
1. Regular Communication
Without this piece, all else will be in vain as it will seem intrusive and overbearing to the person you are trying to protect. Also, it will be more difficult to spot abuses if you are not familiar with their regular patterns. In addition to being significantly beneficial to help ward off elder abuse, many find this relationship a source of great joy for both parties.
2. Communication of the Estate Plan
While an obvious first step is to ensure that an estate plan is put into place, once that’s done, communicating the estate plan in a family meeting format allows everyone to know their role, including who the Power of Attorney(s) is/are, how the beneficiary designations are structured, as well as serving as a launching point for everyone to be on the same page.
3. Dual Statements
Having statements delivered to both the elderly individual as well as the power of attorney, or another trusted individual allows for a safeguard in which another individual can spot areas of concern and discuss anything that seems out of place.
4. Screen Mail
One area that is most ripe for exploitation is offers sent to elderly individuals in the mail. You can head this off by redirecting all mail to a PO Box and screen the mail pulling out anything that exposes your loved one to possible abuse.
5. Work With a Trusted Advisor
Having a trusted advisor allows for a third set of eyes watching out for the elderly person. Sometimes it is difficult for family members to broach such difficult topics, this advisor can help act as a disinterested party to help navigate these difficult times.
An Advisor’s Role
As previously stated, a financial advisor’s role is to act as an extra set of eyes on your loved one’s finances. However, I would like to discuss the importance of the advisor to have safeguards put into place to help communicate when abuses might be taking place. As I am sure you are aware, advisors are bound by confidentiality and cannot share privileged client information. To combat this, here at QED Wealth Solutions we obtain a trusted contact during our onboarding process that we may share information with if we suspect cognitive decline or financial exploitation. This contact can only be made if certain behaviors are observed. We find that it is critical to have the plans put into place long before cognitive decline is expected or observed.
Elder abuse poses a significant threat to our loved ones as they age. While not perfect, implementing the simple safeguards laid out in this blog can go a long way to preventing, or at least minimizing this threat. By raising awareness and taking the proactive measures laid out, we all can help to ensure that our elderly loved ones receive the respect, care, and protection they deserve.
This post is for educational and entertainment purposes only. Nothing should be construed as investment, tax, or legal advice.