Seniors Be Careful: Elder Financial Protection More Urgent Since COVID

The pandemic has left an indelible mark on various facets of our lives. Unfortunately, our seniors have borne a substantial brunt of its impact, particularly in financial security. Recent data from AARP reveals a concerning surge in elder financial exploitation due to a lack of protection, with cases more than doubling since the onset of COVID-19.

Financial Advisor's recent article titled "Rise of Financial Exploitation Presents New Challenges for Advisors" sheds light on the harrowing reality that seniors aged 60 and above now lose an estimated $28.3 billion annually due to financial deceit. This escalating issue underscores an urgent need for proactive measures to shield seniors from financial hazards and ensure their financial goals and overall well-being are not compromised.

As an estate planning attorney based in Austin, Texas, my vocation extends beyond drafting wills and trusts. It encompasses a broader responsibility toward fostering a secure financial environment for our aging population. This is especially pertinent for parents with minor children who also care for their aging parents. The inter-generational responsibility brings about its challenges and necessitates a well-rounded understanding of the common avenues of financial exploitation targeting seniors.

Power of Attorney or Fiduciary Abuse: Entrusting someone with a Power of Attorney (POA) is a significant leap of faith, allowing them the authority to make decisions on the senior's behalf. However, it's a position that can be misused, leading to financial mismanagement or misappropriation of funds meant for the senior's care and expenses.

Family Member Abuse: It's disheartening, but family members can sometimes be the culprits of financial exploitation. This can manifest in various forms, such as identity theft, forging documents, unauthorized credit card usage, and financial coercion.

Investment Fraud: Seniors are often targeted through deceptive investment schemes promising guaranteed returns. Be it Ponzi schemes, pump-and-dump tactics, or affinity fraud, the guise of lucrative investment opportunities is a common pathway to financial exploitation.

Medicare or Medicaid Fraud: Seniors often find themselves entrapped in fraudulent medical billing, paying for undelivered services, or being charged exorbitantly for medical aids and services.

Homeowner Scams: With promises of mortgage relief or enticing home improvement offers, seniors may fall prey to various homeowner scams that jeopardize their financial stability.

Addressing the issue of financial exploitation is not a one-off task but a long-term commitment that requires a comprehensive approach. It's imperative for professional advisors, especially estate planning attorneys, to stay abreast of the evolving nature of financial scams and develop robust strategies to counter them.

Engaging in open discussions around financial planning and potential risks with aging family members can sometimes feel uncomfortable, yet it is crucial. Establishing a network of trusted advisors and family members to oversee and manage financial transactions can create a safety net for seniors. Education on recognizing and reporting financial scams is also a cornerstone in building a defensive barrier against financial exploitation.

Moreover, collaboration among different stakeholders - family members, legal advisors, financial institutions, and community organizations can foster a supportive ecosystem to combat financial exploitation. It's about creating a culture of vigilance, education, and open communication to ensure our seniors' financial safety and dignity are upheld.

Located in Austin, a hub of excellence, a wealth of resources and expertise can be harnessed to drive initiatives aimed at elder financial protection. And as the adage goes, it takes a village. Our collective efforts in championing elder financial protection in Austin will secure our seniors' financial futures and set a precedent of responsibility and care that resonates through generations.

This dialogue is not just a narrative but a call to action. The rising tide of elder financial exploitation is a stark reminder of the vulnerabilities that lurk in the shadows of the financial world, especially in a post-COVID era. As we venture into this unchartered territory, arming ourselves with knowledge, forging robust support systems, and fostering a community of vigilance can significantly contribute towards shielding our seniors from financial predation, ensuring they age with dignity, security, and peace of mind.

Reference: Financial Advisor (Sep. 26, 2023) “Rise of Financial Exploitation Presents New Challenges for Advisors”