Financial abuse of the elderly usually begins at home, according to a recent report from the MetLife Mature Market Institute. Most of us have trustworthy and well-meaning adult children. But when elder financial abuse does occur, it's a family member or caregiver who commits the crime 55% of the time. And sorry, guys, but the study also reveals this statistic: Sons are 2.5 times more likely to take advantage of a parent than daughters are.
The national uptick in elder financial abuse is doubtless related to the economic downturn. Other factors include the growing population of older people, and internet technology that can make a person's financial information more vulnerable to predators.
From the estate planning angle, one of the best ways to protect yourself from this crime is to create a checks and balances system; i.e., appoint more than one individual to key positions. For example, appoint two or more co-agents under your Durable Power of Attorney, and two or more trustees to co-manage your affairs if you become disabled. You might also want to appoint a third-party trustee like a bank trust department, or a trusted C.P.A. or attorney, to serve along with family members.
On the other hand, you may want your kids to take your money. For example, certain estate planning strategies for securing your maximum rightful Medicaid benefits or other governmental benefits entail your legitimately transferring assets to adult children. In such cases, you should spell out your desires in no uncertain terms in your legal documents, including your trust and Durable Power of Attorney. And you should do so while there can be no question that you are mentally competent. Taking these steps will help ensure that your children are never accused of criminal wrongdoing or breaching their fiduciary duty.
To learn more about how to prevent financial abuse of the elderly, log on to the National Center for Elder Abuse here.