How to Recognize and Prevent Elder Financial AbuseSubmitted by Miller Financial Group | Red Oak Iowa Financial Advisor on January 16th, 2020
How to Recognize and Prevent Elder Financial Abuse
By: Daniel S. Miller, CFP®
Financial abuse may take on many forms and have long reaching repercussions. Though it can be a complicated subject, at its most basic level it involves taking advantage of someone through manipulation or intimidation to steal their money or property. And unfortunately, the most often targeted group are the elderly.
What are some of the risk factors for financial abuse?
Elderly adults are the most often targeted group due primarily to the changes to a more sedimentary lifestyle and cognitive issues as we age. Some of the biggest risk factors for older adults include:
Isolation can cause extreme loneliness in seniors, leaving them desperate for any sort of social connection. Many abusers target and pray on elder adults by pretending to befriend them to gain their trust.
Lack of knowledge of specific financial matters:
Elder adults who in their later years do not pay as much attention to, or don’t understand financial issues as well as they once did, may be tricked into giving over secure information. Fraudsters may try to confuse them by claiming that certain changes now exist, and they must take a specific action of some type regarding their financial accounts or investments.
Whether the older adult has a physical or mental disability, they may be dependent on others to help take care of them. This can leave them vulnerable to manipulation and intimidation by caregivers. This same disability may also make it more difficult for an elder adult to take action against their abuser. Unfortunately, this is something the abuser is probably counting on.
Who is most likely to abuse?
Unfortunately, the abusers are more often than not, people that the abused person already knows. In fact, those who are most likely to abuse are the ones who are often closest to the elder individual or someone that he or she trusts. The most common financial abusers include:
Family members may have many different motivations for committing financial abuse. They may feel entitled to their relative’s money or property due to certain circumstances. This may be especially true if they are set to inherit from the elder person or are in a caretaking position.
A caretaker may be a family member or someone who is paid to provide care to an older adult in the elder’s own home. As such, a caretaker may be the one person who has the most access to the details of the elder adults' life. Caretakers may be in a position to exploit this relationship of dependence if their intentions are not pure.
Professionals in whom the elder trusts:
Professionals may be defined as anyone in whom the elder adult depends on to take care of the things, he or she is not capable of handling alone anymore. These services can range from attorney legal services to someone your relative hires to take care of the lawn. Abusers may take advantage of older adults by overcharging for services or manipulating them into signing documents that they don’t understand.
Scammers and con artists:
Some predators prey specifically on elder adults, counting on their social isolation and lack of knowledge about financial matters to be able to gain access to their financial assets. This is one group that may not be known to the elders initially but use their desire for social interaction as a way to gain their trust so that they can scam them.
What types of financial abuse exist?
Financial abuse can take many different forms, depending on the relation of the abuser to the elder adult. Though this is not an exhaustive list, common tactics include (but are not limited to):
• Theft of money or property • Using manipulation or intimidation to force him or her to sign legal/financial documents • Forging his or her signature • Fraud • Telemarketing and email scams
So how can you help prevent financial abuse of elders?
One of the best things that you can do to help prevent elder financial abuse is to keep your older relative or friend from becoming isolated. Check in regularly, make sure you know who has access to him or her, and know the signs of financial abuse. Keep an eye out for suspicious signatures on checks, suddenly unpaid bills, and new and unexplained “friends.” By knowing the signs, hopefully you can help protect your loved ones from falling prey to financial abuse.
*Material presented is not intended as tax advice. For specific tax advice, please contact your own qualified tax professional.
Daniel S. Miller, CFP® is President of Miller Financial Group, Inc. with offices located in Bellevue, NE and Red Oak, IA. Dan and his team serve clients throughout the country as they prepare for the next stages of their financial lives. Dan is a published author of the book “Retirement Built to Last: Planning for When the Paychecks Stop” and has had articles published in the Wall Street Journal, Financial Advisors IQ, Successful farming and The Hill. He is also a dedicated husband, father, and advocate for the financial planning process and financial education.
Dan Miller, David Eads, Kaleb Robuck, and Marcus Taylor are investment adviser representatives of, and securities and advisory services are offered through, USA Financial Securities Corp. Member FINRA/SIPIC. A Registered Investment Advisor located at 6020 E Fulton St., Ada, MI 49301. Miller Financial Group is not affiliated with USA Financial Services.