There are few things that are more appalling than the idea of someone taking advantage of senior citizens. As abhorrent as it may be, elder financial abuse is very common, and you should understand the facts so you can take preventative measures.
Massive Losses
A MetLife Mature Market Institute Study published in 2009 got a lot of attention because it focused on the previously ignored subject of elder financial abuse. The groundbreaking research placed an estimate of annual losses at $2.6 billion.
Subsequent studies came up with much higher numbers — in 2020, Comparitech researchers published an estimate of $148 billion annually from 7.86 million cases.
The reason why the estimates are wildly different is because most cases of elder financial abuse are never reported to the authorities. It is hard to know how many cases are actually reported.
One-fourth of cases are reported according to the early MetLife survey. A subsequent study conducted by the state of New York found that about 5 percent were actually reported.
In spite of the differences in the estimates, the point is clear: Elder financial abuse is a looming threat.
Crimes of Opportunity
Many people assume that seniors are victimized by scam artists and identity thieves, and this is part of the problem. Elders are seen as easy marks by the criminal element for a number of different reasons.
Many seniors are comfortable financially and they have good credit so they have something to take. Loneliness is common among elders, and people longing for human contact may be more likely to open up to strangers.
Since many elders are not technologically savvy, they can be taken advantage of online, particularly through identity theft.
Cognitive impairment is another contributing factor. Many elders start to become forgetful and unfocused, and Alzheimer’s disease is a culprit in many instances. It strikes about 13 percent of all seniors and 32 percent of the seniors over 80.
But the crimes committed by professional thieves are actually dwarfed by the elder financial abuse perpetrated by people the victims know, and the National Center on Elder Abuse has found that family members are behind 57.9 percent of the cases.
Elder Financial Abuse Prevention Tips
The first step is to simply recognize that elder financial abuse is very common, and it can happen to anyone. You should be aware of the possibility, but you also have to guard against being overly suspicious of people who are completely innocent.
While you are fully capable of taking care of your own affairs, you should keep sensitive information private, and you should emphasize online security. Never use the same password twice and make them complicated so they are not easy to hack.
There is a thin line between confidentiality and healthy communication with honest and loving family members. Adult children can approach their parent or parents and discuss the subject openly, and a family financial security plan can potentially be implemented.
From a legal perspective, you can take certain steps to make sure that a trustworthy representative is empowered to handle your affairs if it becomes necessary.
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You should have a plan for aging in place that culminates in the effective passing of your legacy. The exact approach will vary depending on the circumstances — there is no one-size-fits-all plan that is right for everyone.
When you work with our firm, we will put you at ease, learn about your situation and your objectives, and explain your options. At the end of the process, you will go forward with a custom crafted plan that ideally suits your needs.
You can schedule a consultation at our Ashland, KY estate planning office if you call us at 606-324-5516; the number for our Florence, Kentucky office is 859-372-6655. The number for our Charlotte, NC and Huntersville, NC locations is 704-944-3245, and you can use our contact form to send us a message.
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