Prevent financial elder abuse

With financial scams on the rise, here are tips to help keep your loved ones safe.

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  • Family Conversations
  • Cash Management
  • Medical Insurance
  • Retirement Accounts
  • Family Conversations
  • Cash Management
  • Medical Insurance
  • Retirement Accounts
  • Family Conversations
  • Cash Management
  • Medical Insurance
  • Retirement Accounts
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Key takeaways

  • Know the signs of elder abuse and financial fraud.
  • Talk with your loved ones—educate them on risk, solicitations, and scams.
  • Get to know who’s on your loved one's team—caregivers, health care providers, legal, and financial.
  • Set checks and balances to minimize the chance of financial fraud.
  • Become familiar with their financial and planning documents.

Each year 1 in 10 Americans over the age of 60 experiences some form of elder abuse, according to the American Bar Association. However, such abuse may occur much more frequently: Just 1 in 44 elder abuse cases is actually reported, according to the Weill Cornell Medical Center of Cornell University, and others.*

Even so, many people believe that physical, emotional, or financial abuse would never occur in their family. The reality is that elder abuse takes place in families from all walks of life. The best protection from abuse—whether you're an elder or the adult child of one—is an open line of communication with your family, and a plan in place to minimize risk.

Defining elder abuse

Warning signs of abuse may be physical—such as bruises, weight loss, difficulty sleeping, and disorientation or confusion—or financial—such as donations to suspect "charities," unexplained checks to strangers or others, or signs of financial stress when there should be none. Elder abuse also can have emotional consequences, such as depression, irritability, withdrawal from normal activities, or strained relationships.

It may be easy to dismiss some of these signs because they can mimic the symptoms of health conditions or of the aging process. The situation also may be complicated by the fact that the vast majority of elder abuse—90%, according to the National Center on Elder Abuse—is perpetrated by family members. Given that so much elder abuse is a family affair, it's critical for family members and others to be on the lookout for indications that your loved one feels intimidated by or is overly deferential to a caregiver (whether a family member, a friend, or a professional).

Seniors may be more likely to fall victim to elder financial exploitation due to a disability, cognitive decline, general aging, or needing to rely on certain individuals for daily care. Also increasing seniors' vulnerability may be the recent loss of a significant other or living far from loved ones.

"To help older individuals from being socially isolated, consider encouraging them to socialize and join groups," advises Liz Loewy, co-founder of EverSafe, an elder fraud detection firm. "Your local Council on Aging can help connect them with area services, resources, and activities. Social connections need to be maintained and can help keep older family members mentally sharp, and reduce the likelihood that they'll be taken advantage of simply because they're lonely and enjoy talking to someone, whether that person is on the other end of the phone or knocking on their door."

The best prevention: a family conversation

While it's important to understand the signs of elder abuse, it may be more productive to take steps to prevent abuse from occurring in the first place. A family conversation—or, more likely, a series of conversations over time—can help you gain insight into your loved one's affairs and mental state.

You can begin by discussing your loved one's overall financial plan, including their plans for retirement income and transferring assets. You may also want to discuss estate planning documents such as an advanced health care directive and/or a durable power of attorney for financial affairs. From there, you can transition into a conversation about the potential for fraud or abuse.

This subject may be daunting to discuss with an aging parent, but you can use a variety of strategies to start the conversation gently. "You might say, 'Hey, Dad, has anyone unexpected ever called or emailed you and asked for money? Are you getting an unusual number of charitable requests?'" suggests Loewy. "However, don't start by assuming they're vulnerable or being targeted, as this may put your family member on the defensive. No matter your line of questioning, remember that it's important to realize that your parent is always your parent, and that the goal is for your loved one to age with their independence and dignity intact."

If you're concerned about a loved one, determine whether you can answer the following questions. If you can't, target those areas for further discussion with your loved one and other family members who may have the information you seek.

  • Who manages your loved one's money on a day-to-day basis?
  • How are these relationships going?
  • Are there new or unusual credit card charges or cash withdrawals?
  • Is someone else named as an authorized person on their bank or investment accounts?
  • Has your loved one recently run out of money at the end of the month?
  • Have they mentioned regretting or worrying about any financial decisions made recently?
  • Does anyone else have access to their accounts or assets, or to their home (where sensitive documents and passwords may be)?
  • Has anyone recently asked them to change their will or power of attorney in their favor?

Setting checks and balances

As you care for a loved one, consider establishing a set of checks and balances to minimize the potential for financial fraud. According to Loewy, vigilant monitoring, across accounts and institutions, is critical to detecting irregular activity. Fraudsters often start small. Using technology to monitor finances can catch what the human eye misses. For instance, if one sibling is helping manage your parents' day-to-day finances, consider having another sibling receive account statements in order to monitor cash flow and keep an eye out for potential abuse.

Your loved one and your family may decide that it's perfectly appropriate for a caregiver to receive some payment for services rendered in exchange for their work—or your loved one may determine that payment for services rendered will be distributed only as part of their estate settlement. In either case, the key is to establish expectations, ground rules, and appropriate checks and balances to ensure that everyone follows the plan—and to have your loved one update their estate plan, if need be, to document these wishes and avoid potential misunderstandings between family members.

When it comes to preventing elder abuse, a commitment to ongoing family conversations about your loved one's overall and financial wellbeing is immeasurably valuable. You need to stay engaged and alert and be willing to express your concerns. Sound checks and balances around financial responsibilities can be the best tools for preventing or spotting elder abuse.

According to Loewy, education and awareness are vital to preventing elder financial exploitation. "Clients may be unable to recognize the red flags—for example, making a new friend who over time requests monetary assistance. Other scams may involve receiving a phone call or letter regarding an inheritance or an international lottery winning. Embarrassment or regret over previously sent funds may cause individuals to not report they have been a victim of a scam."

Checklist for preventing financial elder abuse

  • Become familiar with your loved one's financial information and current estate plan documents. Ensure that your family member has completed the full suite of planning documents—including a will, a trust if needed, an advance health care directive, and a financial power of attorney—and that you know where these documents are kept.
  • Review the financial information and estate planning documents regularly. At least annually, discuss your loved one's wishes and ensure that the documents continue to reflect them accurately. Also discuss whether anyone has asked your family member to change their plans. Consider suggesting that your loved one consult a trusted friend or family member before making any changes official.
  • Get to know your family member's team. It may be appropriate for your loved one to introduce trusted family members to their attorney, tax adviser, financial adviser, and/or medical staff. Establishing these relationships before they are needed can make the process smoother when they do become necessary.
  • Take care of caregivers. Don't let yourself (or a loved one's primary caregiver) become overwhelmed. Line up respite care to give the primary caregiver a break from their responsibilities. Read Viewpoints on Fidelity.com: Caring for aging parents.
  • Make unannounced visits. If your loved one is frequently alone with a caregiver, drop by unexpectedly. Assess the living space: Is it clean, orderly, and well stocked? Look for signs that your loved one is nervous or uncomfortable to speak with you. See if your loved one whispers, to avoid being overheard by their caregiver. Ask about what they're eating, and check to see that valuables are still there. Ask about what he or she is eating, and check to see that valuables are still there.
  • Educate your loved one about current solicitations and scams. Encourage your loved one to refuse to respond to any request for personal information (e.g., Social Security number, credit card numbers) or offers to buy a product or investment that was unsolicited. People in their late 70s and older often have a really hard time hanging up on a scammer or closing the door on someone coming to their home who was not expected but who appears friendly.
  • Establish open lines of communication. Like all of us, your loved one may make financial or other mistakes, perhaps due to misplaced trust. Let your family member know that it's OK and even wise to talk openly about what happened. Silence and secrecy are likely to make matters worse, while openness and honesty can foster solutions and prevent future mistakes.
  • Consider adding elder protection monitoring services such as EverSafe which sends suspicious activity alerts, including warnings for unusual withdrawals, missing deposits, odd charges, changes in spending patterns, and identity theft. The service also monitors changes to account statements, credit report data, and real estate. EverSafe enables members to add designated trusted advocates who receive alerts along with the member. The firm assists members with remediation and identity restoration when necessary. (Fidelity customers can ask to receive a discount on EverSafe services.)

What to do if you suspect abuse has occurred

If you are concerned that your loved one may have been the victim of fraud or other abuse, ask them directly. One of the reasons elder abuse is underreported is that well-meaning onlookers are afraid to act unless they're absolutely certain that abuse is occurring. If your loved one is in immediate danger, call the police or 911 immediately.

If you think your family member has been subject to abuse that is not life threatening, contact the Adult Protective Services program in your area. Remember that you do not have to prove that abuse is occurring; the professionals you contact are responsible for investigating your concerns.

In addition, financial firms are now required to make "reasonable efforts" to obtain the name and full contact information of a designated and trusted contact person for a customer's account.

Tip: Make sure to update account access information and beneficiary information for all your Fidelity accounts and advise your friends and family to do the same. Visit How to update your beneficiaries.

Next steps to consider

Safeguard important financial, legal, and personal documents.

Get organized with the Fidelity Estate Planner®.

Conduct discussions about health, wealth, and legacy planning.

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Views expressed are as of the date indicated and may change based on market and other conditions. Unless otherwise noted, the opinions provided are those of the speaker or author, as applicable, and not necessarily those of Fidelity Investments.

Fidelity does not provide legal or tax advice. The information herein is general and educational in nature and should not be considered legal or tax advice. Tax laws and regulations are complex and subject to change, which can materially impact investment results. Fidelity cannot guarantee that the information herein is accurate, complete, or timely. Fidelity makes no warranties with regard to such information or results obtained by its use, and disclaims any liability arising out of your use of, or any tax position taken in reliance on, such information. Consult an attorney or tax professional regarding your specific situation.

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