According to the National Council on Aging, more than 10 percent of adults over the age of 60 are victims of elder abuse. Elder abuse can occur in many forms, from physical and emotional to even financial. Moreover, this figure may be low because many instances of abuse are never reported.
At some point in the life cycle many people develop diminished memory, judgment and a reduction in physical and mental capacity. When this occurs, seniors often need to rely on family members or even outside caregivers for help with daily activities of living. Unfortunately, according to the statistics, the abuse is coming at the hands of family members 60 percent of the time.
As an estate planning attorney and a financial adviser, I have seen many instances of both emotional and financial abuse. Adult children who become caregivers may feel entitled to “compensation” in the form of loans or gifts. It can be very traumatic when a family member who you trust and potentially rely on violates your trust to gain a financial benefit.
Senior adults should proceed cautiously before giving a relative signature authority on one’s accounts. One way to guard against this type of abuse is to create a system of checks and balances. If it is necessary to grant a power of attorney, consider granting a joint power of attorney, which will require two agents to sign off on any transaction.
The use of an attorney or a CPA as a co-agent can add an extra layer of protection. Another option is allowing multiple family members to receive duplicate account statements so they can monitor your accounts for any suspicious activity.
It’s very hard for many successful, independent people to ever envision a scenario in which they lack the mental or physical capacity to prevent others from taking advantage of them, but the statistics don’t lie: It’s happening more and more frequently. Luckily there are steps that can be taken to protect oneself.
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