3 ways to protect yourself against financial abuseFinances
Elder financial abuse is a big problem — with estimates ranging anywhere from $3 billion to $36 billion annually.
Seniors can be taken advantage of financially in several ways, from lottery and charity scams to investment and life insurance schemes. Shockingly, more than 90 percent of reported elder abuse is committed closer to home — by a family member or another trusted person such as a caregiver.
"It’s a hard thing to prevent, and you don't know whom to trust," says Neal A. Winston, a certified elder law attorney at Winston Law Group in Somerville, Mass. Often, someone starts out with good intentions — maybe handling the bills, then borrowing money with the intention of paying it back. Instead, they just keep taking.
Of course, this doesn’t mean you need to be wary of all of your loved ones when it comes to finances. To be clear: the overwhelming majority of your loved ones have your best interests at heart, but there are still steps you can take now that will ensure your money stays safe in the future.
Here are three ways to protect yourself:
- Make plans now. Even if you don’t think you’ll need help for several years, start making decisions now as to who will provide that assistance when the time comes, says Winston. Formulating that plan — and asking that person if he or she is willing to help — can prevent you from being scammed in the future by someone who may see your need as a financial opportunity.
- Hire another set of eyes. When considering who will manage your finances in the future, don’t limit it to just one person. In addition to the relative who has offered to step in, Winston recommends hiring a CPA or attorney to serve as a fiduciary. "It’s always good to have another set of eyes to watch and pick up on something that’s happening," he says. Make sure this person plays a role any time the power of attorney is changed too. It will keep that power out of the hands of someone whose goals do not include your financial protection.
- Keep a hand in what’s going on. Even if you’re going to turn over the financial reins to someone else later in life and have another set of eyes in place, try to review bank and credit card statements yourself as well, if you can. Unexplained large withdrawals, frequent transfers between accounts, or ATM withdrawals could be signs that abuse is happening, says the National Committee for the Prevention of Elder Abuse (NCPEA). A caregiver who is scamming may also express excessive interest in the amount of money being spent by you. The NCPEA also recommends being wary of someone, like a relative with whom you’ve had no close relationship in the past, who suddenly becomes very friendly with you right at the time you need help.
By having a plan in place with someone you trust, you avoid being taken advantage of by a relative who sees you as an easy target. Not only should you have a CPA or attorney to serve as a fiduciary, you should also let your financial planner know about your situation to help make sure your plans stay on track and check in with you regularly in case plans should change.
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