Prevent Elder Financial Abuse

The financial abuse of elderly people in the United States is unfortunately a very serious problem, with more than $36 billion being stolen from elders each year according to The True Link Report on Elder Finance Abuse 2015.

The True Link study showed that seniors from all walks of life are susceptible to this type of manipulation, and a significant number of victims were younger seniors with college educations and not living in isolation. In fact, they lost more to abuse than those who were older, isolated, and less educated.

Unfortunately, the research shows that family members are the most frequent abusers of seniors. A relative might ask a widow or widower with assets for a “loan” to tide them over or invest in a new business and then fail to repay the loan (or the business fails or the investment is a scam). In cases such as these, the elder often has no recourse.

The misuse of a position of trust with an older person that harms the elderly financially is known as “undue influence” in some states and is prohibited by law.

Elderly individuals with assets should designate someone they trust as durable power of attorney for finances in their estate plan. The durable power of attorney should also be accountable to other people on a regular basis – such as the estate planner, financial adviser, insurance representative, and other family members – to ensure that transparency is maintained regarding the spending of assets. There should also be a backup plan made for the successor of the power of attorney. The use of an experienced estate-planning attorney is often needed to establish this hierarchy, and it is sometimes necessary to use corporate trustees if there are family conflicts.

It is estimated that 1 in 3 people ages 85 and up have Alzheimer’s. There is currently no cure for it, and many people do not realize they are slipping at the onset of the disease process. Many people are also in denial of it and do not want to give control over their money to another person. We can’t predict how we will age, so it’s important to have plans set in place in the event of incapacity for financial matters and to have designated power of attorney to an individual (or corporate entity) you trust with your finances to prevent any financial abuse.

Here are some of the recommendations from Larry Swedroe and Kevin Grogan from their book “Your Complete Guide to a Successful & Secure Retirement” (Harriman House):

  • Have a signed, notarized durable power of attorney for finances.
  • Have a signed advance health care directive.
  • Make a list of all bank accounts, passwords, investment records, financial records and contacts. Provide written permission to your loved ones to talk to your lawyer, accountant and financial planner.
  • Make a list of all insurance policies.
  • Make a copy of your mortgage statement and any other loans, financial statements and bank accounts.
  • List your physicians, care providers and medications. Give written permission for your loved ones to speak with your doctors.
  • Put in writing your wishes for burial or disposition of your remains.
  • Have a family meeting, provide these items to your loved ones, and explain them.

For assistance in creating your estate plan, contact us at Wilson and Wilson Estate Planning and Elder Law, LLC, 708-482-7090 or