Because seniors are particularly vulnerable, they are at a higher risk of being exploited financially. When seniors are forced to manage their own retirement funds while coping with an array of health issues, the potential of being victimized by financial fraud is high. If you or a loved one has been the victim of elder fraud, the best way to protect your rights is to consult an experienced elder law attorney.
What is elder financial fraud?
There are a number of forms of elder financial fraud. One of the most common scams is telemarketing fraud which involves phony telemarketing calls aimed at obtaining personal information such as social security and bank account numbers. Seniors who shop over the phone for convenience are often unaware of the risk of such tactics.
Additionally, investment schemes can be pitched to older adults, leaving them little time to recover their losses, while unscrupulous financial advisors may engage in account churning (conducting excessive trading in a client’s account mainly to generate commissions). The problem is compounded by the fact that many states do not have reporting rules for financial professionals who suspect elder fraud has occurred.
Finally, fraudulent schemes can be undertaken by people who are close to an elder. In particular, caregivers and family members can take advantage of an elderly victim by skimming savings accounts or stealing valuables.
Why are seniors at risk of financial exploitation?
Seniors are at a greater risk of financial abuse for a number of reasons. First, many elders have often accumulated significant wealth or have equity in their homes. Moreover, older adults typically receive Social Security retirement benefits and also draw income from other types of retirement accounts, such as pensions, IRAs, and 401(k)s. Finally, elderly individuals who are isolated or suffering from physical and mental conditions, such as dementia, are more vulnerable to financial predators.
The Bottom Line
Financial exploitation is an unfortunately common form of elder abuse as misappropriation of funds, property and assets results in losses of billions of dollars each year. While state and federal lawmakers are taking steps to combat financial elder abuse, it is crucial for adult children and other responsible family members to be actively involved in managing the financial affairs of aging parents.
Ultimately, the best way to minimize the risk of elder fraud is by having a well-conceived estate plan. As an example, an elder’s assets can be transferred into a living trust managed by a co-trustee who can protect the assets. In the end, by consulting an experienced elder law attorney, you can design a plan that will protect your assets and allow you to enjoy your retirement years in peace.