Your elderly relatives could be at serious risk of financial abuse.
There are steps you can take to stop people from taking advantage of your elderly relatives. Free power of attorney forms can keep their finances safe, for example. In this post, we’ll outline how to protect your most vulnerable loved ones and their finances.
The Possibility of Financial Abuse
Abuse takes many forms, but financial exploitation is claiming more senior victims by the day. In these situations, somebody might take advantage of an older person’s mental state to take their money. This could even be (and usually is) one of their family members.
According to a NAPSA study, less than 3% of these cases get reported. They also found that up to 10% of victims will then rely on Medicaid for future healthcare.
Abuse could also come from scams that specifically target older people. These will rely on them being unfamiliar with technology. For example, they may not know what phishing is. Regardless of the abuser or their methods, you need a plan to protect your older relatives.
How a Power of Attorney Helps
A power of attorney lets someone make financial/medical decisions on another person’s behalf. This is invaluable when the person in question is incapacitated or otherwise vulnerable. Here’s how a POA could help your elderly relatives:
- Designates a trustworthy agent: The person in charge of the finances will be someone the principal trusts. They know what’s in the relative’s best interests.
- Limited powers: The POA may only cover certain transactions for security purposes. In these situations, the relative still has some control over their finances.
- Limited access: Similarly, only the agent and principal can use the accounts. This helps keep those same accounts away from unscrupulous family members.
- No legal guardianship: POAs make sure these matters stay in the family. Without one, a court-appointed guardian may get control of your relative’s finances.
- Reporting: The POA might require an agent to report to a lawyer or another party. This ensures a good level of accountability that helps curtail potential abuse.
- Flexibility: A springing POA only takes effect when your relative isn’t able to make their own decisions. This lets them stay in control for as long as they can.
- Peace of mind: Finally, a POA helps you and your family worry less. You’ll be a lot more confident that your elderly relatives are safe from potential abuse.
Setting Up a Fair POA
The POA’s agent should be someone who’s financially literate and that your loved one trusts. It’s worth volunteering yourself — but only if you can commit to it. Your elderly relative should be the one to make the final decision, ideally.
If you have serious concerns about the choice of agent, address this immediately. For example, you might not trust the family member that your loved one chose. Your relative must also review their POA regularly and update it as necessary.
It’s good to use a free online POA template. Otherwise, you and your elderly relative will have to spend hundreds on drafting one with a lawyer. These forms already come with every significant clause and precaution.
When You Should Consider Guardianship
Court-appointed guardianship won’t be ideal for your relative. However, you can still nominate a family member as your loved one’s guardian. It could again be yourself if you can commit to this role. Here’s when guardianship might be better:
- When your loved one can’t consent to a POA.
- When court oversight would add more security.
- When there’s no suitable POA available.
- When your relative has more complex needs.
It’s still best to keep this in the family, if possible. A stranger having control over your loved one’s finances will be nerve-wracking. Even if the court appoints them, it’s still fair to be skeptical.
Promoting Scam Awareness
As another preemptive measure, you need to educate your loved one on common scams. They might not be fully competent, but it could still save them. Make sure they don’t give out personal or financial details over the phone.
You should also tell them to check with you or their agent before major transactions. This could help when someone texts them pretending to be a grandchild in need of money.
The Importance of Communication
Similarly, it’s good to have regular check-ins with your loved one regardless. This can help them be more open about facing abuse if any exists. You must also keep an eye out for any changes to their emotional well-being.
Your elderly relative should still be involved in decisions about their own care. If you think they’ll need a POA, for example, be upfront with them. They might have an opinion on who would be a suitable agent.
Conclusion
Your elderly relatives could be at serious risk of financial abuse. It’s important you work hard to stop this from happening. Make sure you use a free online power of attorney template to protect their finances.
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