MoneyDo: Protect Yourself/Family From Financial Elder Fraud
Most of us have taken steps to protect ourselves from the menace of identity theft, from freezing our credit to even adding protections to our computers and email. While Identity Theft is trouble, Financial Elder Abuse is more of a danger than identity theft.
Experts agree that a majority of Financial Elder Abuse cases are not reported, so the number of instances of this fraud exceeds the 200,000 cases reported annually in the United States.
Financial Elder Abuse can be defined several ways, but generally involves abuse of financial control in a relationship where there is an expectation of trust. Typically, this type of fraud is perpetrated by someone known to the victim, who has been asked for assistance, which is why it is often unreported.
This week, your MoneyDo is to be proactive and take steps now to protect your finances as you age.
The best line of defense against Financial Elder Abuse is surrounding yourself with a strong and trustworthy social support network.
Start by putting a Durable (Financial) Power of Attorney (POA) in place. The person you nominate should be someone you trust, but also someone is who has a strong financial foundation and comprehension. Without that foundation, money issues may drive otherwise-trustworthy people to take unexpected action.
When selecting a POA, your spouse may be the natural choice if married; however, you may need to reconsider if that is appropriate in a second marriage situation where children from a prior relationship could be a better choice. Selecting the alternate or backup is another important decision. Remember, the person you name will ultimately have control over your finances, so any decision should not be taken lightly. You could also name multiple individuals as your POA so that they can monitor each other’s actions as well.
Secondly, surround yourself with trustworthy individuals – often family. Elderly individuals who have many people involved in their lives are much harder targets for fraud predators.
“Surround” means having conversations with those individuals you trust on a regular basis. An open line of communication will give your loved ones comfort to talk to you when something doesn’t feel right of if there is a significant behavior change. It will also help build trust as you work on our third suggestion…
Thirdly, we suggest a system of checks and balances. As you age, learn to trust your network. Allow your family to monitor your bank accounts. Look for unusual activity. Fraudsters tend to start small to see if they are successful. Again, the more eyes looking out for you and your family, the better.
Fourth, we suggest having a family meeting. The key is to establish expectations, ground rules, and appropriate checks and balances to ensure that everyone follows your plan—and to have your loved one update their estate plan, if need be, to document these wishes and avoid potential misunderstandings between family members. Clear expectations help everyone understand their role.
Some of these steps may not only improve your defense against Financial Elder Abuse – use them as a chance to strengthen ties and lines of communications between you and your loved ones. You’ll discover you’re not just promoting financial stability but building a strong family and social network at a time when you’ll need it most.