Fraud cases involving elderly clients are on the rise, with nearly half of the CPA financial planners who participated in the survey, around 47%, saying they have seen an increase in financial fraud in the last five years.
According to a recent On Wall Street’s article, there are two reasons for this increase. One is the fact that fraud is more likely to be reported these days with greater awareness in our country. Also, retiring baby boomers haven’t all been the most tech-savvy—scammers see them as easy targets with sophisticated frauds to steal their money.
The AICPA survey showed that the elderly are being scammed via phone and online scams, capitalizing on their inability to say no and falling victim to confusing or too-good-too-be-true representations. Here are some tips from the survey that elderly individuals can use to protect themselves:
- Create your financial plan and review it twice a year. Your estate planning attorney can help you make sure that the assets on hand are the same as what is detailed in the plan.
- Have a System of Checks and Balances. Contact information regarding your support team should be given to your estate planning attorney. These include bankers, accountants, clergy, and any designees with authority over health-care concerns, as well as family members and loved ones. Fraud is stifled with open communication among the members of the team, so that others are aware of actions and decisions.
- Communicate regularly. The article reminds people that it’s important to communicate any changes in their situation to their estate planning attorney.
- Allow your estate planning attorney to speak with family members. It is helpful to have your estate planning attorney be able to talk to family members or a professional on your team. Again, communication is important and can help recognize and stop fraud from occurring.
- Designate a co-trustee. This will help prevent an unscrupulous family member from taking advantage of an elderly individual by imposing their will and signing away their assets. The article suggests that if this is an issue, talk to an estate planning attorney about a revocable living trust and assigning a co-trustee for the account.
- Require double signatures for larger dollar amounts. This is a great way to make sure that a large chunk of money doesn’t walk out the door without your say-so. Thus, the reason for a co-trustee: to ensure that all checks are reviewed and approved by the co-trustee if more than a pre-determined amount. This can help reduce the risk of fraud, the article advises.
These are but a few examples. Your estate planning attorney can help you with other strategies and techniques to help prevent financial fraud and exploitation.
Reference: On Wall Street “Elder Fraud: 9 Tips to Protect Clients”