Fraud, Scams, and Phishing. Con artists often prey on seniors, who can have difficulty identifying scams that may occur in person, over the phone, or online.
Frank Abagnale, the con artist who inspired the film “Catch Me If You Can,” is now a renowned security consultant and author of “Scam Me If You Can: Simple Strategies to Outsmart Today’s Rip-off Artists.” Abagnale is not only a prolific author, but he co-hosts the AARP’s weekly podcast “The Perfect Scam.”
Abagnale’s work is packed with terrific examples of scams ranging from simple to complex, along with numerous steps all of us can take to better protect ourselves and our families. One simple step is to be aware of recent scams and recognize their characteristics. Remember, if it sounds too good to be true, it probably is.
Why Now? A confluence of factors has led to the increase of elder financial abuse. The number of older Americans is growing steadily as the bulging demographic of Baby Boomers retire and the members of the Silent Generation live longer. This is compounded by the significant amount of wealth that retirees now control.
In addition, the investment industry’s trend away from corporate pensions toward self-directed retirement accounts has left more retirees responsible for their own investment decisions. This trend does provide more individual influence on financial health. However, a decline in cognitive health from aging can result in lapses in memory, judgment and intuition. These skills are key tools to help identify and defend against financial fraud.
Beware of Friends, Family, and Caregivers. Sadly, financial abuse is often perpetrated by the people closest to the victims. Family members, relatives, neighbors, and friends can be very manipulative and the risks are significant. Abusers have forced victims to withdraw cash from ATMs, have forged checks from their accounts, or even manipulated older relatives to change their wills.
The abusers can include professionals, such as caregivers, investment advisors, attorneys, or accountants, also. These professionals often enjoy a trusting relationship and access to important documents or assets.
Elder financial abuse is an under-reported crime because of the shame and embarrassment it brings to the victims.
Grey Divorce. The Silent Generation and Baby Boomers are living longer, and the incidence of older couples divorcing is on the rise. Silver Splitters, or Diamond Divorcees, also are getting remarried, sometimes bringing younger second (or third, etc.) spouses into the family.
If the second spouse is also a caretaker for an aging partner, it can be difficult to determine if undue pressure exists to change an existing will, especially when the family member’s cognitive abilities decline. This can cause friction between the children from the previous marriage and the new spouse. Unfortunately, changes to estate plans often are discovered by heirs only after the loved one is deceased, too late to clarify the circumstances around redistribution of assets.
Next Steps. These examples merely scratch the surface of the issues related to elder financial abuse. Commit yourself to improving your defenses against it:
Step 1: Meet with your accountant, attorney, investment advisor, doctor, and other professionals to solicit their advice. Addressing elder financial abuse is a huge issue in these professions. Each will have recommendations relevant to your family’s situation. One hot topic is identifying a “Trusted Contact” at your financial institutions.
Step 2: Protect your family at home. Be careful whom you allow in. Secure your checkbook and valuables. Use your safety deposit box. Shred old financial statements. Check your credit report. Get your legal documents in order.
Step 3: Monitor your assets. Keep an eye on transaction activity in your accounts. Get access to duplicate statements for your parents’ accounts or other family members’ accounts.
Step 4: Talk to your attorney. A family member experiencing financial pressures, substance abuse, divorce/remarriage, etc., may be a greater threat. An attorney can help update trusts and wills to help protect the family from financial misfortune, internal conflict, and embarrassment.
Conifer Bay Capital has increasing knowledge and resources in the area of elder financial abuse. For suggestions about where to start with your family, call us.
Why Is Elder Abuse in the Family Governance Section?
Wealthy families often focus on two financial goals: maximizing and sharing the value of their assets and preparing future generations to inherit wealth. The first goal involves investing, financial planning, and tax/estate planning.
The second goal is where family governance comes in. Financial literacy, shared values, philanthropy, genealogy, or family history are all tools to prepare your heirs. This includes teaching them about – and preparing yourself against – financial scams and elder financial abuse.