Estate planning typically focuses on how individuals and couples can organize and manage their money so as to best preserve it for the future, and ensure that it is properly distributed after their death. This can include drafting wills, setting up trusts, and passing on money as a gift during one’s lifetime.
A rarely discussed, but increasingly important part of preserving one’s financial heritage for future generations – is preventing the possibility of elder financial abuse. Whether committed by strangers, caretakers, or even family members, elder financial abuse threatens the financial stability of elderly individuals throughout the country.
Understanding Elder Financial Abuse in Manhattan Beach
Elder financial abuse takes many forms, but is increasingly prevalent as the baby boomer generation moves toward retirement and old age. It involves taking advantage of confusion, uncertainty, or reduced mental capacity in older individuals in order to take financial resources away from those individuals.
Sometimes elder abuse is conducted by total strangers. It can involve scams by phone call or email that convince an elderly individual that their family members are in trouble and need money, or that they have won a contest or lottery but must pay “taxes” for their portion of the award. In this way unscrupulous individuals are able to get money transferred to their account, or obtain the account info of the elderly individual.
Elder financial abuse can also occur when caretakers or family members exert undue influence over an elderly individual in order to obtain money from them, or to convince them to make changes to their wills or estate plans in order to benefit the individual exerting the influence. This type of activity is often the basis for will contests or probate litigation down the road.
In either scenario, the financial abuse can wreak havoc on an elderly individual’s estate planning by fundamentally changing how assets are to be distributed, or reducing the amount of the assets altogether. This can be devastating for family members who would be beneficiaries of the estate, but can also put the elderly individual at risk if they were planning to live off the assets in their old age.
Protecting Against Elder Financial Abuse
The first step in protecting financial abuse from occurring is education. Scammers are increasingly sophisticated in their exploitation of elderly individuals and it can be easy for even a wary individual to fall for their traps. For this reason, it is important to talk with family members about the types of risks and scams that exist and how to prevent them from occurring.
Elderly family members should be warned never to provide their banking information to an unknown third party, whether over the phone or in writing. If they receive a request by phone or email in writing, they should always verify that the information they are receiving is correct. Before making large transfers of money or writing large checks, they may want to confirm with another family member that the transaction is legitimate.
When dealing with influence from family members and caregivers, the process of protecting your loved ones can be more tricky. As an initial step, you should make sure that your loved one has well thought out estate plans already in place before reaching an elderly age. That way he or she is less likely to be influenced into creating a new will or arrangement.
If your loved one makes any sudden changes to how money is to be distributed or who should be taken care of, you may want to look into the circumstances behind that change and whether it was the result of an honest reconsideration of the circumstances or the product of undue influence.
While it can be tricky to navigate the balance between protection and independence, there may come a time where the adult children of an older family member may need to consider a power of attorney or legal authority to help monitor and manage financial accounts. This can ensure that money is not being taken out through theft or confusion.
What to Do If You Believe Financial Abuse Has Occurred
If you believe that your loved one has been the victim of financial abuse, the first step is to report the conduct to local law enforcement so that they can investigate. Many of the scams perpetuated on elderly individuals are conducted by a small group of individuals who scam many different people. Reporting to law enforcement can stop these criminals from hurting another person by stealing their money.
Second, you should alert your loved one’s financial institution to see if there is any possibility of the money being recovered. If a transaction just occurred, the bank may be able to stop a wire transfer, or cancel a check and avoid money being taken out of your loved one’s account.
If the financial abuse has resulted in a change to your loved one’s estate planning, you should consult with an attorney about how to challenge or undo these changes. For example, you may be able to contest the validity of a new will that was created as the result of undue influence. Or you may be able to have a beneficiary eliminated from estate documents.
California Attorneys Working to Protect Your Loved Ones from Harm
Elder financial abuse is a constant risk for your loved ones as they get older. Having worked their whole lives to secure a solid financial future, your family members and friends can become targets for bad actors who would like to steal or exploit the fruits of that hard work.
At the Ledbetter Law Firm, APC, our estate planning attorneys can help you to understand the signs and red flags of elder financial abuse in order to help prevent it from occurring. We can also work with you to ensure the proper legal documents, such as a valid will or a power of attorney, are in place in order to minimize the risk to your loved ones as they get older. For more information, contact us online or at (310) 321 – 4198.