Elder financial abuse

Question:

How can better planning help prevent elder financial abuse?

Response:

Elder financial abuse usually comes from two sources: scams or trusted people, whether family members or neighbors or aides, who take advantage of the relationship.

The scams are becoming more widely known, the grandchild in jail, the international sweepstakes, the big killing if the victim contributes seed money. I got a call just the other day from someone purporting to be from Xfinity. I was offered a 50% reduction on my bill by paying for six months up front.

Awareness of potential scams helps a lot. But steps to avoid isolation are even more important and they can also help prevent theft by family members and other trusted individuals. Having someone trusted involved with finances, whether another family member, an attorney, a bank or trust company can prevent or reduce the impact of scams or theft.

This can be accomplished through naming one or more trusted individuals as agents under a durable power of attorney, giving them online access to accounts so they can monitor activity, or naming them as trustee of a revocable trust.

Over the years, I’ve become a strong proponent of using revocable trusts for this purpose since they give the trustee access without taking away any of the rights and control of the trust grantor. Banks and financial institutions are more comfortable with trusts than with durable powers of attorney and in setting up trusts grantors tend to consolidate their various financial holdings which is important for both management and planning purposes.

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