Preventing financial exploitation by the people you know might require taking legal precautions; at the very least youll need to have some uncomfortable conversations with friends and family. You might need to revisit plans youve made beforeand create new ones.
Hire the right professionals. Engage a CPA or certified financial planner to handle such concerns as how much money you can withdraw safely from retirement funds. Hire an estate-planning attorney with elder-law expertise to write your will and power-of-attorney documents; they can also craft trusts, which can limit relatives access to your money. A professional daily money manager can help you deal with bill-paying, insurance claims, phone calls to financial institutions, and troubleshooting. (Learn where to find professionals.)
Set up your documents. Consider carefully to whom you give power of attorney. Though legally that person is your fiduciarycharged with acting in your best interestin practice he or she could do anything with your money, even without your knowledge. Dont assume the person closest to you will do the best job; you might be better off giving it to someone more detached and financially secure.
Experts told us that for no extra cost, the power-of-attorney document can be drawn up with limits, such as assigning a relative or friend to monitor the person with power of attorney, mandating a periodic written report of financial transactions, or assigning joint powers of attorney, which requires two signatures on every check. You can also split the chores, giving one person authority over financial matters and another control of health decisions. Have your lawyer hold the physical papers granting power of attorney, to ensure that your appointee cant prematurely present it to your investment company or bank to gain unnecessary access.
Arrange your everyday accounts. Set up direct deposit of payments such as tax refunds, pension benefits, and Social Security. As of March 1, 2013, all Social Security benefits must be paid electronically or on a debit card. (Go to ssa.gov/deposit for details.) Set up automated bill pay with your bank for your mortgage, utility bills, and other regular expenses. Have financial institutions send statements and alerts to a trusted person who has no access to any of your accounts to check for fraud.
Avoid sharing a large bank account or a credit card with another person. If you need or want someone else to pay bills for you, create a shared account and arrange to transfer only enough money each month to cover the bills. Get to know officers and tellers at your local bank or credit union. Ensure that they have an up-to-date signature card and contact information on file.
Secure your home. Make sure any caregiver youre considering undergoes a background check. Dont assume that a placement agency will do a thorough one. Insist on a national, rather than a state, criminal check. To monitor in-home help, consider installing a surveillance camera if state law permits it.
Dont leave mail in an unsecured mailbox. Shred documents with identifying information. List and photograph all jewelry and valuables, so they can be traced to pawn shops if necessary. Keep small valuables in a locked drawer and photographs of them in a separate place.
The most important action you can take on an older relatives behalf is to make sure he or she gets out and about. Elder abuse is correlated highly with social and physical isolation. In addition to making regular and unplanned visits yourself, arrange for outings and visits with friends, neighbors, clergy, and volunteers.
Lay down the ground rules. Hold a family meeting to discuss who will look after the older relative physically and financially. If one relative will handle the bulk of the care, have an attorney draft a personal-care agreement that outlines how much he or she should receive for services. Its reasonable for a family member to be paid, says Starnes, the CFP. Thatll keep a lot of caregivers out of trouble, knowing what the limits are.
Set up a limited account. If youre concerned about your relatives abilities to make financial decisions, set up a small account at a local bank for her. The account could, for instance, include a debit card and checks and have a spending limit of, say, $300. Arrange with the bank to investigate checks written for more.
Be available. Accompany your relative to meetings with financial advisers and doctors; they can help you make plans for her protection. Often people are nervous about having that conversation, but it doesnt have to be approached in an adversarial mind-set, Starnes says. It can be, Mom, youve done such a great job, and I just want to help.
Watch for these warning signs
Be suspicious if the elderly person has a new best friend, becomes socially isolated, never seems to be available or able to come to the phone, or is hesitant to have contact with others unless his or her caregiver is present. Also be on alert for:
What would you do?
Ask her whether you can take control over her funds so that you are the go-to person if he has questions about her money, says Debra G. Speyer, elder-law attorney in Philadelphia.
Talk to her when he isnt around. Unfortunately, if shes been enabling him his whole life, chances are youre not going to get her to stop, says Sally Smith, adult protective services case manager supervisor, Franklin County (Ohio) Office on Aging.
If there are signs of physical abuse, involve the police, says Martha Crippen, elder-abuse investigator, Rhode Island Department of Attorney General.
Where to turn for information and help
Consumer Financial Protection Bureaus Office of Financial Protection for Older Americans receives and investigates consumer fraud complaints specifically related to mortgages, credit cards, banks, loans, and more.
Eldercare Locator (800-677-1116) refers and connects callers to local services in their communities, including meal and transport services, home care, support services, services for caregivers, and others.
National Academy of Elder Law Attorneys (703-942-5711) offers a search for lawyers specializing in durable powers of attorney, conservatorship, estate planning, elder abuse, and other concerns.
National Adult Protective Services Association provides a national map with links to abuse-reporting hotlines by state.
National Center on Elder Abuse has links to additional state directories of help lines, hotlines and elder-abuse prevention resources in all 50 states and the District of Columbia.
AARP Money Management Program pairs seniors of limited resources or people with disabilities with trained money-management volunteers. One service helps seniors who remain in control of their finances to balance their checkbooks and pay bills; the other focuses on those deemed incapable of handling their own funds. The program is offered in 21 states and the District of Columbia, though availability varies.
American Association of Daily Money Managers has members nationwide who can assist seniors with bill-paying, banking, insurance paperwork, and organizing records in preparation for income-tax filing, among other tasks.
National Association of Professional Geriatric Care Managers includes professionals who can facilitate aspects of seniors lives, including monitoring home-care workers, managing medical appointments, and identifying potential exploitation risks, among other services. Some geriatric-care managers can also pay bills and handle paperwork.
AARPs Scams and Fraud page offers information on the latest frauds against older people.
Better Business Bureau Scam Stopper has information on common scams and instructions on reporting a scam. You can sign up for scam alerts on the site.
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