Forward Thinking – Protect your nest egg from financial elder abuse
In last month’s Forward Thinking column, I wrote about elder abuse from the perspective of how to spot signs of physical and emotional abuse as well as passive or willful neglect. Today’s topic concerns financial elder abuse and how to prevent it.
In May, Kiplinger’s Personal Finance magazine reported on the federal Senior Safe Act and its impact on financial abuse against seniors. Passed in 2018, it allows banks, credit unions, investment advisors and brokers to report suspected fraud to law enforcement without fear of being sued. The act also requires staff training to spot financial abuse and fraud by those institutions to qualify for the liability protection.
The good news is that it seems to be working.
“In 2020, more than 36,000 reports of suspected elder financial abuse were filed by depository institutions with the Financial Crimes Enforcement Network, up 49% from 2018,” the article states. It also included this telling Consumer Financial Protection Bureau statistic: The loss when a stranger was involved averaged $17,000. It rose to $50,000 when the victim knew the suspect.
The AARP, National Council on Elder Abuse and other sources all agree that the same red flags that bank employees are trained to notice also can help family members protect loved ones. These include:
- Unusual changes in bank account or money management, including checks written to strangers and ATM withdrawals at odd times.
- Unusual or sudden changes in a will or other financial documents; newly drawn up financial documents you or your loved one do not understand.
- Fraudulent signatures on financial documents
- Unpaid bills
Consumer Reports shares three additional steps you can take to protect yourself or a loved one.
First, no matter how hard it is, start talking. If you have an elderly parent, especially an isolated one or one with cognitive issues, find out if they are keeping up with their personal finances. Ask if any strangers or new friends have asked about their financial status or offered to help them. If you personally need help, reach out to a trusted family member, banker or financial adviser for assistance with bill paying and reviewing financial statements. If you are not comfortable with the advice you receive or the actions taken, seek out a second opinion and set of eyes.
Second, do you and/or your parents have essential legal documents in place for protection down the road? These include wills, financial and healthcare durable powers of attorney and HIPAA release forms. All are vital in case you or someone you love cannot make important life decisions. However, strongly consider who will put your best interests ahead of his or her own – even if it means stirring the pot a bit. You can also have more than one person as power of attorney.
After years of nudging by our financial advisor, my husband and I finally updated our documents a few months ago. We used a recommended software program to make updates, then had the documents witnessed and notarized. It was so easy I was angry with myself for not doing it sooner.
Third, if you or your loved one have multiple credit, bank and other accounts, consider consolidating them (while being careful not to take actions that may incur taxes or penalties.) Simplifying accounts makes it easier to keep track of anything unusual.
I’ll finish with a few more tips from AARP:
- Stay connected with loved ones through regular phone calls, visits or emails.
- If applicable, develop a relationship with your parent’s caregiver. They are less likely to financially exploit if someone is paying attention. (This also pertains to other forms of elder abuse)
- Become a “trusted contact” to monitor bank account and brokerage activity.
- Set up direct deposit for checks so others don’t have to cash them and direct payments for bills to insure delivery.
If you suspect elder abuse of any kind, contact your local police department, the sheriff’s office or the Tennessee Adult Protective Services at 888-APS-TENN (888-277-8366). The National Center on Elder Abuse offers more ways to get help by calling 1-800-677-1116. Other resources include FiftyForward’s Victory Over Crime program, 615-743-3417 and the Mid-Cumberland Human Resource Agency’s Ombudsman program, 615-850-3918.
Next month I promise something on the lighter side!
To view this column on WilliamsonHerald.com, click here.
Susan Leathers is a Brentwood-based journalist with a keen interest in aging issues. Send suggestions for future columns to [email protected] This monthly column is sponsored by The Heritage at Brentwood. For more information, call 615-507-2686 or visit www.theheritagelcs.com.