It’s estimated that millions of seniors are victims of financial abuse on a yearly basis. This abuse can come from many different places; family members, nursing home staff, and even strangers looking to take advantage of a vulnerable person for monetary gain.
Financial abuse usually entails tricking or coercing a person to hand over funds, and the loved ones of seniors play an integral role in preventing it. If left unaddressed, all or most financial assets may be lost, which can be devastating to an elderly person. Here are a few things you can do to safeguard aging relatives and their finances.
Stay In Touch With Elderly Relatives
Isolation is a huge problem for elderly people. Many seniors lack meaningful connections with friends and family, which can leave them susceptible to scam artists offering kind words and a pleasant demeanor. This is especially true for people who are largely homebound, who may only ever interact with professional caregivers and other healthcare staff.
Staying in touch with your loved one serves two purposes. First, it prevents them from feeling isolated and lonely, which makes it less likely they’ll fall victim to a friendly scammer. Second, it allows you to ask questions about your relative’s financial outlook and offer suggestions as needed. You can even offer to look over the person’s bank statements or checkbook as a precaution.
Establish Yourself as a Trusted Contact
Banks allow account holders to establish trusted contacts, which are people permitted to monitor banking activity without any real power or authority over them. For example, if a family member makes you a trusted contact, you would be privy to their account information but unable to withdraw money or switch it from one account to another.
As a trusted contact, you can also notify the bank if you believe any fraud or wrongdoing has occurred. This is crucial to put a hold on debit or credit cards that have been used unauthorized, or to refund money spent by someone other than the account holder.
Discuss Legal Options
When cognitive decline becomes too severe, drafting a power of attorney (POA) can help families protect their elderly loved ones. A power of attorney provides total or partial financial authority to another party, depending on the situation. A limited POA can have a beginning and end date, while a general POA would imbue a person with the power to pay bills and make other financial transactions until a person dies or becomes incapacitated.
While having this discussion is often difficult for families, it can be in the best interest of a senior who is no longer able to manage her finances. Sit your loved one down and explain your concerns. If there have been issues in the past with money mismanagement, be sure to bring them up during the conversation.
If you have questions about establishing a POA on behalf of a family member, Roybal-Mack & Cordova, PC will provide all the information you need so you can make the right decision. Our firm provides a wide range of estate planning services to clients in New Mexico, including living wills, trusts, and help with probate.