Find out how you can take precautions to protect your loved ones from elder abuse.
Did you know that every year 1 out of 10 Americans over the age of 60 experiences some sort of elder financial abuse? And those are just the cases reported. We can assume that the number is much higher, since many seniors are either too ashamed to admit being a victim, or they simply aren’t able to speak up for themselves. Add the increased number of baby boomers who are getting older, and we have a serious problem on our hands.
Most of us couldn’t even imagine that happening in our families. However, according to the National Center on Elder Abuse, 90% of elder abuse is committed by family members. The best way to protect your parents from elder abuse is to take precautions to prevent abuse ahead of time. That means open communication and a system of checks and balances.
Open Up Communication
Communication is key to building trust on both sides. Your parents may not feel comfortable discussing something as personal as finances, and you don’t want to imply that they are incompetent. Make sure to explain that your motive is only to protect them, and that it makes sense to have someone else who is aware of their plans down the road. By establishing open communication, your parents may feel more comfortable to come to you if something suspicious does occur in the future.
How Do I Know?
Once you’ve started the conversation, you should be able to answer the following questions:
Who manages your loved one's money on a day-to-day basis?
How are these relationships going?
Are there new or unusual credit card charges or cash withdrawals?
Is someone else named as an authorized person on their bank or investment accounts?
Has your loved one recently run out of money at the end of the month?
Have they mentioned regretting or worrying about any financial decisions made recently?
Does anyone else have access to their accounts or assets, or to their home (where sensitive documents and passwords may be)?
Has anyone recently asked them to change their will or power of attorney in their favor?
If you or another family member is not able to answer any of these questions, it’s time to deepen the conversation.
Create a System of Checks and Balances
Who will manage the finances? The very first thing is to choose the best person for the job. Often a parent will choose the oldest child by default, or the one who lives nearest. However, that person may not be the one who would have the parent’s best interest in mind.
Legal documents. Your parents should have their legal documents in order. These documents may include a will, a healthcare proxy (for healthcare decisions), a HIPPAA release (permission to release healthcare reports and results), and a durable power of attorney for signing documents on their behalf (which remains active if they become incapacitated). You should familiarize yourself with the document content and where they are kept.
Review these documents often. You will want to sit down with your parents at least once a year to discuss whether any changes should be made. Encourage them to avoid making any changes until they run them by you or another trusted family member or friend.
Get to know the financial team. Involving multiple third parties in the management of your parents’ finances, including their financial advisor, attorney and banker, creates an extra layer of protection. Often these professionals can see changes in behaviors, transactions, balances, etc. that you may not notice. Establish a relationship with them yourself, so they can communicate with you if any type of potential misuse is suspected.
Check on caregivers. If someone is taking care of your parent, assess the environment often. Drop in unexpectedly. Is the space kept up and clean? Are your parents eating? Are they nervous when you visit, or do they whisper so the caregiver can’t hear?
Educate your parent about scams. People over 70 often have a hard time refusing someone who calls or visits to solicit. Explain to them how fraud can happen. Discourage them from sharing any personal information, such as their social security number, bank account and credit card numbers, etc.
Remember, elder abuse can happen to anyone, in any family, and it can be hard to spot. Take early precautions to keep your loved ones safe.
If you or your parents need help setting up a plan, First Bank offers estate planning services. Call Alan Spears at 765-973-4209 to schedule a free consultation.