If you’re an adult child with senior parents, you’ve probably experienced a reversal of past roles. Early in your life, your parent may have taught you how to bandage a scraped knee after a fall and how to tie your shoelaces so it doesn’t happen again. Now, as an adult child, you may find yourself watching out for your elderly loved one’s well-being and preventing them from falling into precarious situations.
In the United States, seniors fall victim to over $2.9 billion dollars of loss due to financial exploitation each year, and the US Census Bureau projects that one in five individuals in the U.S. will be of retirement age by 2030. It's a crime known as elder financial abuse, and unfortunately, the people who commit it against seniors are sometimes the ones closest to them. It can be their caretaker, financial manager, or even their family, like their children or spouse.
Many of our clients come to us with questions and concerns about how to protect a senior parent from being financially taken advantage of. That’s why we created this resource to help you identify red flags as you protect aging parents from individuals who might take advantage of their financial situation.
STEPS TO PROTECT A SENIOR PARENT FROM ELDER FINANCIAL ABUSE
- Discuss their finances as early as possible. In general, individuals become increasingly vulnerable to financial exploitation as they age, especially if they struggle with diminished mental capacities or memory issues. Starting conversations early reduces confusion later on.
- Understand their overall financial picture. Make a list of your parent's important financial documentation, including power of attorney, any wills, and trusts. Make sure you or another family member is listed as a trusted contact for these accounts in case of emergencies.
- Simplify their finances. Accounts that get forgotten or go unchecked for long periods of time are more vulnerable to elder fraud. Simplifying, streamlining, and organizing your parent's untidy financial accounts may help reduce risk. For example, if your parent has five credit cards, maybe they should pare down to just one or two.
- Involve multiple family members. Overseeing a senior loved one’s finances can be a challenging task. Bringing multiple family members into a group conversation reduces the burden and ensures that there isn’t just one point of contact for your parent's entire financial situation.
- Talk to them about scams and fraud. Phone and internet scammers often target the elderly. Keep yourself up-to-date on local scams, and remind your loved ones to never give out their personal information (like social security numbers or financial account information) to someone they don’t know. Consider signing them up for the Federal Trade Commission’s Do Not Call Registry.
- Hold a family planning financial meeting. If appropriate, hold an annual meeting with your family to discuss the senior’s current assets and liabilities, their budget, cash flows, and any action steps to take. Tasks should be divided between individuals and discussed together.
- Stay connected. Seniors living in isolation are more likely to fall victim to financial scams, manipulation, and exploitation. Call or visit your loved one often to check in on their life and how they are doing.
RED FLAGS FOR ELDER FRAUD AND FINANCIAL ABUSE
Prevention is the strongest kind of protection. But even if you're well-prepared, elderly financial exploitation might already be affecting your parent.
Here's a list of common red flags for elder financial abuse. If you recognize any of these warning signs, you may consider using the resources in the next section to take action.
- Inflicted isolation - A family member or caregiver isn’t allowing the elder to have conversations alone, they are always around, or seem to be keeping them separated from others.
- Submission to another - The older adult seems submissive to the suspected person and they aren’t being allowed to speak for themselves.
- Uncharacteristic financial transactions- Bills are being paid late, checks are bouncing, unusual investment or transaction activity in financial accounts, or the senior is giving large or regular gifts to one person. This can suggest funds are being mismanaged or misused.
- Change in cleanliness or appearance - The elder shows signs of neglect and does not seem to be maintaining the lifestyle they once had or that their resources should provide.
- Legal ownership updates - Sudden changes in their power of attorney or estate documents, titles, and mortgages that seem uncharacteristic or at odds with previously expressed wishes and decisions.
WHAT TO DO IF YOU SUSPECT ABUSE IS TAKING PLACE
Each individual and family circumstance is unique and can vary drastically. Fortunately, there are many institutions and individuals that can provide resources and help you assess the situation and decide on a course of action.
- Call the National Elder Fraud Hotline at 833-FRAUD-11 (833-372-8311). The hotline, created by the Department of Justice, is open from 5:00 a.m. to 10:00 p.m. Central Time daily.
- Report financial exploitation to a local Adult Protective Services (APS) or local law enforcement.
- Call the Minnesota Adult Abuse Reporting Center at (844) 880-1574 or email dhs.adultprotection@state.mn.us.
- Of course, if the situation is an emergency and your loved one is in danger, call 911.
Our team of financial professionals at Birchwood Financial Partners is trained to recognize signs of senior financial abuse and exploitation. We encourage all of our clients to take action to ensure the financial health and safety of their loved ones and themselves.