7 Signs of Elder Financial Abuse

published by:
TED TOAL, CFP®
December 31, 2020
7 Signs of Elder Financial Abuse

7 Signs of Elder Financial Abuse

Nobody likes to think of their parents getting older and needing assistance, but it’s a reality many of us face. An essential part of caring for your parents as they age is identifying and protecting them from elder financial abuse. Baby boomers and the Silent Generation are getting older. With their accumulated assets, they have a higher chance of being defrauded than those who are younger. According to one estimate, seniors collectively lose up to $30 billion a year to elder financial abuse.1 This abuse can come from total strangers or even friends and family members.

As a concerned child, how can you help combat this? Here are seven ways to spot financial abuse and six ways to protect your parents and their financial futures.

Signs of Elder Financial Abuse

Protecting your parents from scammers is crucial, especially as they get older and have a more challenging time managing their finances.

Warning signs may include:2

  • Unusual activity in their bank accounts, such as large or unexplained withdrawals
  • Withdrawals from an inactive account
  • A newly opened joint account
  • New credit card balances
  • Bank and credit card statements sent somewhere other than your parents’ home
  • Suspicious signatures
  • Closing a Certificate of Deposit or savings accounts without worrying about penalties

Protecting Your Parents From Elder Financial Abuse

Tip #1: Talk to Them About Money

Reach out to your parents and make sure that you are staying in touch with them regularly. Ensure they are paying their bills and, if applicable, find out who is doing it for them. Your parents may not want to share this information or admit that they need help. You can ease them into it by asking them for advice or speaking about your own money worries. Once this becomes more comfortable, they may let you help with more as it becomes necessary.

Tip #2: Automate Their Bills or Deposits

One way to go about helping them pay their bills is by automating the process. Automating your parents’ payments with direct debits from their account can help keep things organized while lessening the chance that they will become victim to a scam.

Similarly, you can automate transfers into their checking account, as they may have funds coming from various sources, such as social security, pensions, annuities, etc.

Tip #3: Have the Necessary Documents Ready

Are your parents’ legal documents in an accessible location?

Legal documents could include:

  • Wills
  • Healthcare Proxy
  • A HIPAA Release Form
  • Power of Attorney

Ensure your parents are careful when choosing a power of attorney, as this person will be responsible for managing finances once your family member is no longer able to do this. Having more than one is also a good idea, as this is an excellent way to act together and consult each other.

Tip #4: Condense Your Parent’s Finances

Consolidate your parents’ finances when possible. Many older people have more than one account—practice caution when consolidating and moving accounts to ensure that you don’t incur any penalties. Additionally, respect beneficiary designations, or you could face legal action.

Tip #5: Encourage Credit Card Use Over Cash

If your parents sent cash to a scammer, it would be much more difficult to trace than if they paid with a credit card.

If they were to make a purchase with a card, the credit card company can:

  • Protect against identity theft
  • Allow past transactions to be reviewed
  • Reimburse any stolen money that

Tip #6: Create a Trust

A trust is a great way to manage and protect your parents’ assets. But, they can still withdraw from this account, making it easy for them to fall prey to scammers. However, suppose your parents name you (or another trusted individual) as Trustee or Co-Trustee. In that case, they cannot withdraw money from this account without approval from the Trustee.

Many older people do not like giving up this type of control, but if you speak to them about the importance of their safety, they may be more open to it.

If you can establish a system of checks and balances by utilizing the above tips, your parents will be much more protected from fraud. Take a proactive approach so that you can get ahead of them before it becomes an issue rather than waiting until your parents become the victim of financial abuse.

  1. https://dfi.wa.gov/financial-education/information/warning-signs-elder-financial-abuse
  2. https://www.consumerreports.org/elder-fraud/ways-to-prevent-elder-financial-abuse/

This content is developed from sources believed to be providing accurate information. It may not be used for the purpose of avoiding any federal tax penalties. Please consult legal or tax professionals for specific information regarding your individual situation. The opinions expressed and material provided are for general information, and should not be considered a solicitation for the purchase or sale of any security.

We're Here to Help: We welcome the opportunity to learn more about your goals and discuss how we may be able to work together. To get started, schedule a 15 minute phone call with us.
Not ready to talk? Connect with us on
LinkedIn or Facebook and subscribe to our informative newsletter.

About Us

At RCS Financial Planning, our mission is clear and straightforward: to provide personalized wealth planning and investment advice that minimizes our clients' financial concerns and maximizes their long-term peace of mind.. We firmly believe that a true financial partner shows you how to make the best choices for your future by always focusing on your needs first. And our fee-only service model ensures there is no conflict of interest.

series
Choosing The Right Finnancial Advisor
Ted Total, CFP®
January 16th, 2020
What Plan Is Right For You?
Ted Total, CFP®
March 18th, 2020
Where To Start Saving?
Ted Total, CFP®
june 12th, 2020
send us a message
Thanks! We'll be reaching out to you!
Oops! Something went wrong while submitting the form.