April 25, 2014 by lpalma
John Gower is a writer for NerdWallet.com, a personal finance website dedicated to helping you make smart financial decisions.
Knowing the signs and stopping the crime are the steps to take in the immediate event of abuse, but what about the future? You don’t need to wait around to protect aging loved ones from being targeted for financial exploitation. Build up reinforcement measures and guard their finances against those who would like to use them for their own purposes.
1. Check in occasionally
It may seem obvious but this step is often overlooked. By checking in with the loved one, you can tell if any changes occur, whether in health, habits, or even conversation topics. These can help you assess their psychological condition (if you think an onset of dementia or Alzheimer’s is coming) and how they’re spending their time and money. Any abrupt changes in financial habits such as forgetting bills, spending far in excess of normal monthly obligations, or excessive gift-giving (especially to one person) are cause enough to investigate.
2. Set up automatic deposits and payments
Both out of convenience and safety, ensure that the elder uses automatic payments for mortgage or rent, utilities, and car payments, as well as automatic deposits for Social Security benefits, pension payments, and tax refunds. This eliminates the possibility of any unnecessary middlemen managing the money.
3. Prudence about any investment “opportunities”
A prime method of exploiting the finances of seniors is in spectacular “investment opportunities.” These tend to be the sort of scams to watch out for, but they shouldn’t be the reason to stop the elder from investing altogether. Check in with a financial advisor before any investments are made and once they are approved, make sure that regular oversight on investments is maintained, either by the elder’s fiduciary or even you.
4. Consider power of attorney
If you realize that the fiduciary, the financial trustee of your elderly relative, is not quite listening to your advice and making suspicious or extreme changes to the elder’s finances, it’s time to consider getting a lawyer’s opinion. One possible solution offered will be for you to become the power of attorney for the elder. In this way, you will be able to supersede financial control from the fiduciary and protect the older loved one’s accounts.
5. Vet and monitor any caregivers
Do a background check for criminal history on any new person responsible for the senior’s care. While checking in and visiting the loved one, keep a careful eye on both any valuables and important documents in the room or general vicinity. Get to know the caregiver and ask them how the senior is doing during your visit too. This way you can compare their assessment with your own and the senior’s.
Ultimately, this type of exploitation may be more subtle and gradual than you think. Recognizing the signs and perpetrators, acting when necessary, and taking preventative steps will put you ahead and ultimately give you peace of mind in knowing that your older loved one is not being subject to elder financial abuse.