Elder Financial Abuse: Protecting Those Who Can No Longer Take Care of Themselves
When the media reports on elder abuse, physical abuse almost always seems to come to the forefront, and for good reason: the physical safety of the elderly, those that often cannot protect themselves, is and should be the first concern for protecting our older friends and relatives.
However, one type of abuse that is not addressed as often is just as prominent and often as devastating: elder financial abuse. The National Center on Elder Abuse reports that financial abuse of the elderly accounts for $2.9 billion in lost funds each year, and despite laws designed to protect both the elderly and their finances, the problem is still very real. One of the most effective ways to make sure the elderly are financially safe and secure for the remainder of their lives is estate planning.
Why They Are Vulnerable
The danger of financial abuse of the elderly can come in many different shapes. The main issue is that, as humans age, in many cases, the brain ceases to function as efficiently and effectively as it once did. As a result, the reasoning processes don’t work like they once did. As a result, elders may be more susceptible to suggestions that could cost them financially.
What Is Financial Abuse
The University of Louisville lists several of the larger scams designed to separate the elderly from their funds. They include health insurance scams, in which individuals pose as Medicare representatives in order to get personal information, or fake clinics in which the elderly are charged for bogus treatment. Other scams include counterfeit prescription drugs, funeral and cemetery scams, internet fraud, telemarketing and phone scams, among others. Other scams may be more simple and old-fashioned, but just as effective. For the elderly in nursing or assisted-living homes, this may be as simple as an orderly or assistant stealing information or checks, or for those incapacitated at home being taken advantage of by a family member.
Estate Planning for Protection
However, financial planning is one way to help protect the well-being of the elderly. Some tools that can be used include:
• Will: Simply creating a will has the ability to earmark assets.
• Irrevocable Trusts: An irrevocable trust is a tool in which a grantor places funds and relinquishes control of the funds. In this case, it can be cash, life insurance and other financial items, and proceeds generated from the trust are tax exempt. The money is later disbursed according to the rules dictated by the grantor, who placed money in the trust, by the trustee, who administers the trust, and potentially by the beneficiary, who receives the funds based on the terms created by the grantor and the trustee.
• Power of Attorney: Giving the power of financial and sometimes health decisions to someone competent and trusted.
These simple steps account for assets and make it easier to detect and prevent unexpected or suspicious activity among the assets of the elderly, acting as a check against scams and those who would take advantage of those no longer capable of taking care of themselves.
ABOUT THE AUTHOR: McNeely Stephenson
McNeely Stephenson, a law firm in New Albany, Indiana, has faithfully served the people and communities of Indiana and Kentucky for several years in a variety of legal areas. We have the experience and resources to help.
Copyright McNeely Stephenson
More information about McNeely Stephenson
Disclaimer: While every effort has been made to ensure the accuracy of this publication, it is not intended to provide legal advice as individual situations will differ and should be discussed with an expert and/or lawyer. For specific technical or legal advice on the information provided and related topics, please contact the author.