I've been working a lot lately on my book, and I'm happy to report I'm getting much closer to finishing. While I spend most of my time focusing on scams and frauds against the elderly, there is another, related area of concern which I write about as well. This is the subject of preventing f
inancial abuse and exploitation of elders. Even though this is a broad topic worthy of its own dedicated book (see Lisa Nerenberg's excellent book, Elder Abuse Prevention: Emerging Trends and Promising Strategies), I include some ideas in my chapter on preventing scams and frauds.
These kinds of situations are excruciatingly painful and difficult. The sense of betrayal and violation, anger, loss, and sadness can be overwhelming for everyone touched by elder financial exploitation and abuse. Families can be torn apart, resulting in broken relationships and years of estrangement. There may also be irreparable damage to the victim(s), both financially and emotionally.
According to research from the National Criminal Justice Reporting Service, about 60% of perpetrators were relatives of the victim, most often an adult child. It’s sad to me that the very people who are supposed to be looking out for an elder in their time of need are often the ones exploiting them. The quote about the banality of evil comes to mind.
In terms of prevention, each situation is different, so I can’t suggest a simple formula. Nevertheless, there are some general ideas to consider:
As I've been working on my book, I talked to my own financial advisor about my interest in this subject, and he told me about a couple of examples he had seen recently. The take-away message in both of them was “The more eyes on the money, the better.” He also spoke, as have other financial advisors and estate planning attorneys with whom I’ve talked, about the idea of “layers of protection.” This can mean practices like one sibling being the joint owner of a parent’s bank account, but a different sibling or other trusted party watching the account statements.
A big source of problems can come from providing financial assistance and loans to family members. While most elders want to help out a struggling child or grandchild and find this gratifying, I encourage the elder and their family to think very carefully about what they’re getting into. I recommend a written agreement which spells out the details, and that the giver’s needs for reimbursement always be among the top considerations. Think of this as a contract of sorts, which may carry with it rights to seek legal remedies if need be.
I think it’s also important to pay attention to who has access to the senior. Think about them and their situation in terms of potential risks, which could include things like financial problems or excessive debt, drug/alcohol abuse, overspending, or gambling addiction. Remember: The more (trustworthy) eyes on your parent’s money the better.
This is a very complex subject, and I hope this will get you started thinking about it for your own situation. Remember, for more good books about preventing financial abuse and exploitation, along with scams and frauds, see my Elderly Fraud Recovery Help Resources Store on Amazon.
Thanks for reading,
Art