A problem that many seniors do not think of is the chance of experiencing financial abuse. While it is not often talked about, it is a huge issue that many people fall victim to. It’s important to know what it is, what the signs are, who is most at-risk, who common perpetrators are, and how you can prevent this from happening to you or a loved one. The first thing you will need to know is the definition of financial elder abuse.
Elder abuse is a crime that deprives older adults of their resources, and ultimately, their independence. One way that elder abuse can occur is financially. Although it is not well-known, financial abuse of seniors is more common that you think. According to the National Adult Protective Services Association, “one in nine seniors reported being abused, neglected, or exploited in the past 12 months.”
While financial abuse can take different forms, there are some common signs to look out for. The most common signs of financial abuse include: signs of theft, fraud, misuse of a person’s assets or credit, and use of undue influence to gain control of an older person’s money or property.
Now that you know what financial abuse is and what some of the signs are, you need to be aware of who is most likely to fall victim to this crime.
Who is At Risk?
According to a survey done by the Investor Protection Trust, most victims of financial elder abuse are over the age of 80, specifically between the ages of 80 and 89. These victims also tend to live alone and require some form of home or health care assistance. Other common factors of these victims include:
- Diminished capacity due to an injury or illness.
- Seniors who do not have English as their first language.
- Seniors suffering from Alzheimer’s or dementia.
- Seniors who are isolated.
- Seniors who have financially dependent adult children.
- Seniors who have experienced a change in personality through age with caregivers that might rationalize their hard work deserves extra rewards.
Who Are Common Perpetrators?
While many believe financial abuse is performed only by professionals and strangers, the most common perpetrators are those who the victim trusts most. These trusted individuals can include:
- Family members
This is not to say that all cases involve a family member or a trusted confidant; many cases of financial abuse can occur through different types of scams. Some of the more well-known types of scams performed include cons of home repair, telemarketing, and sweepstakes.
Tips to Avoid Financial Abuse
If you are worried about becoming a victim of financial abuse, don’t be. There are many ways you can avoid becoming a victim. The best ways to prevent this from happening are:
- Being involved with your friends and family and building a trusting relationship.
- Do not allow yourself to become isolated.
- Seek out trusted people for advice or help if you begin to struggle doing things yourself.
- Regularly discuss any emotional or physical problems you are experiencing with a trusted professional.
- Get your financial assets in order before you begin experiencing a decline in mental acuity.
- Be actively involved with your finances.
- Assert your right to be treated fairly and with respect.
One of the best ways you can avoid becoming a victim of financial abuse is to plan out what you want to happen with your estate.
Why Estate Planning Is Important
Planning out what happens to your estate is very important because it allows you to have control of the ownership of your assets when you are gone. This can ensure that you will not become a victim of financial abuse when you are gone. One of the more common ways people participate in estate planning is by getting a will or trust. By doing this, you can feel assured that your assets will be in the hands of the people you choose.
Importance of a Will or Trust
Some people use these two words interchangeably, but they are two different things. A will is a written document that ensures the distribution of property and assets among the people named as beneficiaries. A will can also address issues such as guardianship for minor children and others needing ongoing care. A trust is used to reduce large estate taxes and to shield the transfer of other assets from being part of public record as an estate goes through the probate process. The main difference between these two documents is that while a will does not go into effect until you die, a trust takes effect as soon as you create it. There are many reasons why having these documents written out before you are gone. Some of these benefits include:
- Your property can be transferred, without the need for probate, to family members and others after death.
- Trust assets may be protected from creditors, divorce, and bankruptcy.
- Trusts can provide care of a child from a previous marriage.
- Your money and assets will be managed after death and can ensure your family’s financial needs will be met.
- It allows you to donate all or part of your estate to charity.
- It can provide care for a disabled child or spouse.
- It can provide financial needs for of minor beneficiaries in younger years and distribute the assets once they are a specific age.
As you get older, the likelihood of experiencing financial abuse can increase. To avoid this, there are signs you can look out for and general tips you can follow. A good way to ensure your finances are secure can be to get a will or trust. This can ensure your assets will go to those you want to provide for. Just remember every situation is different, so it’s important to sit down with an experienced estate planning attorney so that you can look at what option works best for you.