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Use of Estate Plans Can Protect Seniors

When Is A Guardianship Necessary?
According to experts, despite increased phishing emails and robocalls, it is far more common for financial exploitation to be committed by people who know the victim, such as relatives, caregivers, neighbors, or ‘friends.’

Financial exploitation is far more common than most people think, especially of the elderly. There are several types of individuals more at risk for exploitation, according to a recent article from mondaq titled “How An Estate Plan Can Protect Against Financial Exploitation.” These include someone with a cognitive impairment, in poor physical health, who is isolated or has a learning disability. Beck & Lenox Estate Planning and Elder Law states that the use of estate plans can protect Seniors. The attorneys are trained to be observant of interactions between clients and family members in meetings, and the attorneys ask probing questions.

Patterns of Behavior

As stated above, certain individuals make for easier targets for exploiters. Exploiters share common characteristics amongst themselves as well. They are often people with mental health illness, substance abusers or those who are financially dependent on the person they are exploiting.

Warning Signs of Financial Abuse

  • Changes in patterns of spending, transfers, or withdrawals from accounts
  • Isolation from friends and family
  • Unexplainable financial activity
  • An inability to pay for routine bills and expenses
  • Sudden changes to estate planning documents, beneficiary designations, or the addition of joint owners to accounts or property titles

How to Avoid Financial Exploitation

One way to avoid financial exploitation is with an estate plan prepared in advance with an eye to protection. Instead of relying on a durable power of attorney, a funded revocable trust may provide more robust protection. A revocable trust-based plan includes safeguards like co-trustees and a requirement for independent party consent to any trustee change or amendment.

A support system is also important to protect a person if someone is attempting to exploit them. Estate planning attorneys team up with financial advisors, CPAs and other professionals to create a plan to avoid or end elder abuse. Other steps to be taken include:

  • Consolidating accounts with a trusted financial advisor, so all assets are easily observed
  • Have a family member or trusted person receive copies of account statements
  • Consider a credit freeze to avoid any possibility of being coerced into opening new credit card accounts or taking out loans.
  • Establishing a budget and sharing information with advisors and a trusted person, so any spending anomalies are easy flagged.

Elder financial abuse is an all-too common occurrence according to Beck and Lenox. Taking proactive steps to safeguard the vulnerable family member helps to deter or thwart anyone intent on taking advantage of a loved one. The use of estate plans can protect Seniors. For more information or for a free attorney phone conversation, click here.

Reference: mondaq (Sep. 23, 2022) “How An Estate Plan Can Protect Against Financial Exploitation.”

 

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