In today’s society, the financial exploitation of the elderly has become increasingly common. Although we tend to think of phishing emails, robocalls, and other scams when we hear the term financial exploitation, it’s far more common for this exploitation to be committed by people who know the victim. Cognitive impairment diminishes the ability of some older adults to make financial decisions for themselves. This means they may not be able to detect fraud and scams. Fortunately, thorough estate planning is one of the most effective ways to fight against it. Please continue reading to learn how estate planning can protect vulnerable adults from financial exploitation and how our compassionate Montgomery County Estate Planning Attorney can help you today.
What is Elder Financial Exploitation?
Firstly, financial exploitation is the fraudulent misappropriation of financial resources or abusive use of financial control by a caregiver, fiduciary, or another individual who uses the financial means of an older person for personal profit or gain. Essentially, this deprives an older person of the benefits or assets to which they’re entitled. This can lead to elders losing their life savings, meaning they could potentially receive inadequate healthcare as they age and lack the necessary funds.
As mentioned above, despite the increase in sophisticated scams, financial exploitation is often committed by those the victim trusts. This may include relatives, caregivers, neighbors, or “friends.” While every situation is different, this exploitation most commonly occurs when an agent under a power of attorney or an individual in another type of fiduciary relationship takes advantage of the power they’ve been granted over an older adult’s finances. Ultimately, elder financial exploitation is more likely to occur in those who are in poor physical health or have a cognitive impairment.
How Does Estate Planning Help Protect Vulnerable Adults From Financial Exploitation?
One of the primary ways you can prevent vulnerable adults from being financially exploited is by creating an estate plan that prepares for your potential incapacity. During the estate planning, you should appoint a durable financial power of attorney. This legal document allows an individual, also called an agent, to act and make decisions on your behalf when you’re no longer capable. Having a power of attorney means that the right people will make decisions about your finances. They will handle your financial accounts and manage legal matters. It’s importnat to appoint someone you genuinely trust to ensure your wishes are carried out as intended. You can even include provisions that require your power of attorney to regularly report to another person on the financial transactions they make on your behalf for an additional layer of protection.
If you’re looking for ways to minimize the risk of elder exploitation, please don’t hesitate to contact a trusted Montgomery County estate planning attorney from JD Katz, who can help protect your financial security.
