$27 Billion and Counting Elder Fraud Hits a New High
A bombshell report on elder fraud was recently released by Comparitech, a consumer research company that focuses on the United Kingdom, the United States, and Canada. You are not going to like the conclusions.
According to Comparitech’s research, senior citizens in the United States may lose nearly 25 times more to scammers than what is being reported.
That would mean more than 5 million cases of elder fraud annually, with a whopping $27.4 billion in losses.
Does the risk hit home? There are 10 million baby boomers in their ‘60s with living parents. There are 5.7 million people living with Alzheimer’s. Both of those numbers are expected to rise exponentially. Chances are really good that you and your parents are potentially at risk.
It may be time for you to start thinking proactively about putting more safeguards in place as part of your estate planning.
7 Ways to Prevent Elder Fraud
- Create a team to help. Ideally, it would be comprised of your attorney, CPA, and financial advisor.
- If you have accounts scattered among institutions, consolidate them to 1 or 2 institutions and get to really know your advisor. The more contact with you and knowledge of your circumstances that the advisor has, the more likely it is that he or she will be able to react to potential elder abuse.
- Speaking of your financial advisor – now is the time to meet and get a real financial plan with a realistic budget. That will make it easier to identify strange transactions, such as those caused by a caregiver repeatedly making small cash withdrawals from your account.
- Use your institution’s tools and automate transactions as much as possible. This cuts down on the paper mail, which is just another opportunity for a thief to steal something from your mailbox, and minimizes the chance that you will miss a bill or deposit.
- Get a computer program like Quicken to automate your accounting records and allow your CPA to review transactions remotely. You may even want to have your CPA firm pay your bills to provide another check and balance.
- Consider compiling your assets under a strong revocable trust. Set it up with a trust protector who can remove a trustee, change the situs of the trust (this is important for numerous reasons, including avoiding taxes), and even change terms if the tax laws change. You can even get a separate tax ID number for your trust, which would avoid giving out your social security number.
- Involve your family in your plan. If you are primarily using one financial institution, then you can set it up to get a consolidated statement on your accounts and have a copy delivered to a trusted family member or your CPA.
- Try not to duplicate the agent roles. If you name a family member as a trustee, then name someone else as your agent under a power of attorney.
- Be consistent with your beneficiary designations, if it works with your estate plan. That makes an outlier more obvious.
The take-away? Plan for protection.
Virginia Hammerle is an attorney with Hammerle Finley Law Firm. Sign up for her newsletter at email@example.com. She may be reached at hammerle.com.