3 Ways to Avoid Elder Fraud

Apr 3 • Financial Planning, Investments • 358 Views • No Comments on 3 Ways to Avoid Elder Fraud

By Patrick Amey

Old age should come with a caution label for many reasons. Most of us expect to live longer than our parents or grandparents. And with longer life come difficulties – and unfortunately, sometimes financial predators.

Making sure that your income can keep pace with your cost-of-living increases can be difficult now and in the future, especially if your retirement lasts 30-plus years. We often speak about the need to plan and have your portfolio designed to account for that length of time.

But another problem is a bit more disturbing: our aging brain. Studies have shown that as people age they become more focused on maximizing positive emotions and social interactions and more determined to block out negative experiences. Researchers call this socio-emotional selectivity.

More simply, this process means some older people pay more attention to those who make them feel comfortable and content. This often leads seniors to overlook signs of danger. Recent research shows that highly intelligent retirees (even those with no signs of dementia) find it harder to distinguish safe investments from risky ones.

The news constantly discusses thieves close to elderly victims, whether a family member or a care aide. Those older than 65 are 34% more likely than 40-somethings to have lost money on a scam, according to a recent report from the Financial Industry Regulatory Authority’s Investor Education Foundation.

The Investor Protection Trust (IPT) adds that more than seven million older Americans – one out of every five citizens older than 65 – already fell victim to a financial swindle. Often victims, tricked by an apparent atmosphere of care, allow access to a checking account or personal information that made access to the money easier.

Here are three ways to help protect ourselves and our elderly loved ones:

  1. Educate. Many organizations like the IPT established formal programs and publications to educate both seniors and those who love them.

The EIFFE Prevention Program, for example, “educates healthcare and legal professionals to recognize when their older clients may be vulnerable to or victims of financial abuse, particularly those patients with mild cognitive impairment, and then to refer these at-risk patients to state securities regulators, local adult protective services professionals” and others.

  1. Start Early. Even if you’re in your 40s or 50s, we never know in advance how quickly our mental processes can decline. You may need now to get your affairs in order, both in terms of estate planning as well as financial planning.

Once your plans are in place, discuss these with your financial planner a stipulated delay before large changes to the plan and estate documents, especially as you age. We urge all of our clients to tell us about any alterations to your financial plans.

  1. Include Your Spouse. If you have assumed the bulk responsibility for handling family’s financial situation, be sure work with professionals who involves you and your spouse.

Both you and your partner must understand what you plan entails and the reasoning behind certain decisions. This becomes especially important if you die first and your spouse then assumes full control of the plan.

For help preparing now, schedule a meeting by clicking below, contact Patrick Amey –pamey@makinglifecount.com, or call (913) 345-1881.

 

 

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