Estate Planning | Making a Difference One Family at a Time

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elder financial abuseIt takes a very cold-hearted individual to take advantage of a vulnerable senior citizen. Unfortunately, there are a lot of them out there because financial abuse is a very big problem within the elder law community.

Let’s look at the problem from an overview, along with some of the steps that you can take to mitigate your exposure.

Senior Life Expectancies

It can feel impossible to picture yourself as a target when you are sharp as a tack and fully independent. Yet, statistics tell a different story about the aging process.

If you are a man who has reached the age of 65, your average life expectancy is about 85 years. For women, it stretches closer to 87 years.

As you age, your risk of cognitive decline grows. Research shows that about one in three people over 85 has Alzheimer’s disease or another form of dementia.

Even without dementia, older adults often experience some level of cognitive impairment that can affect financial decision-making. This reality makes planning ahead essential, even if you feel confident in your abilities today.

Prevalence

Financial exploitation is much more common than most people realize. The National Council on Aging reports that older Americans lose billions of dollars every year to financial abuse. Estimates suggest the total losses may exceed $36 billion annually when factoring in unreported incidents.

About 1 in 20 older adults has experienced some form of financial mistreatment. Sadly, this problem is likely even more widespread because so many cases never come to light. If you do not have safeguards in place, you could become part of these troubling statistics.

Who Commits Financial Abuse?

It is natural to think of strangers when you hear about scams and theft. However, research shows that most elder financial abuse happens closer to home. The MetLife Mature Market Institute found that about 55 percent of cases involve family members, neighbors, or caregivers.

Perpetrators often exploit their position of trust to gain access to your finances. In other cases, professionals such as financial advisors or attorneys may betray their duty. You should stay aware of this possibility, even if you trust the people around you.

Common Methods

Elder financial abuse can take many forms. Some of the most frequent methods include:

  • Misusing a power of attorney to transfer assets
  • Stealing checks, credit cards, or valuables
  • Forging signatures on legal or financial documents
  • Convincing you to change your will or deed under pressure
  • Running scams that involve phony investments, lotteries, or charities
  • Charging excessive fees for services you never requested

These tactics often start small and escalate over time. Staying vigilant about your accounts and property is one of the most important steps you can take.

Risk Factors

Certain circumstances can make you more vulnerable to financial exploitation. You face higher risks if you:

  • Live alone or depend on others for daily care
  • Have cognitive impairment or memory loss
  • Feel socially isolated or lonely
  • Lack experience with modern banking technology
  • Have accumulated significant savings or property

If you identify with any of these factors, you should consider proactive measures to protect yourself and your family.

Extreme Underreporting

As we stated, many cases of financial abuse never get reported. According to the Government Accountability Office, only about 1 in 44 instances comes to the attention of authorities.

Victims often feel ashamed or fear losing independence if they admit they have been exploited. Others depend on the abuser for care or companionship, and some simply don’t know they are being victimized.

This underreporting means that your risks are even higher than public records suggest.

Elder Law Actions

You do not have to face this problem alone. An elder law attorney can help you develop safeguards that limit your exposure to exploitation.

Consider these protective strategies:

  • First and foremost, in a general sense, practice due diligence at every turn in light of this widespread phenomenon.
  • Create a durable power of attorney that names a trustworthy person to manage your finances if you become incapacitated. This document should include clear limits on authority.
  • Adjust your revocable living trust to include oversight via a professional co-trustee who can provide an extra layer of protection.
  • Use automatic bill pay and account alerts to track transactions and catch unauthorized activity quickly.

We Are Here to Help!

Our firm can help you create a plan that protects your interests on every level. We have an estate planning office in Glastonbury and another location in Westport, CT, and you can call us at 860-548-1000 to schedule a consultation.

If you would rather send us a message, use our contact form, and we will get in touch as soon as possible.

 

 

John McCann, Estate Planning Attorney
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