Protecting Your Parents

A few years ago, we received an unexpected phone call from a man we had never met. He told us he was the power of attorney for one of our clients. There was just one problem: We had all of her legal documents on file, and he wasn’t listed on any of them.

Our client was an older woman who had no immediate family, and the only contact we had on record was her previous power of attorney. We contacted that person, who confirmed that our client had indeed updated her documents shortly before Alzheimer’s disease significantly affected her ability to manage her affairs.

We met with the new power of attorney and the former one at our client’s home. Together, we discussed her needs and developed a plan for managing her finances and care. At first, everything seemed to be in order. Then the requests for money began.

Requests that had historically been no more than a few thousand dollars suddenly exceeded $20,000. This was especially concerning because our client’s long-term care insurance was already covering her facility and care. We began asking for receipts and documentation showing how the money was being spent. The new power of attorney became angry and refused to provide the information.

That was when we became concerned that something more serious might be happening.

We began our protocol for suspected elder abuse. Before we could take further action, however, the accounts we managed were being transferred away—to an account connected to the man’s brother. It was a sobering reminder of something every family should understand: Elder financial exploitation is real—and protecting the people we love requires more than good intentions. It requires preparation, awareness and involvement.

The Growing Threat of Elder Abuse

According to the National Council on Aging, up to 5 million older Americans experience elder abuse each year. Even more troubling, research suggests that as few as 1 in 24 cases of elder abuse are reported to authorities. Financial abuse alone is estimated to cost older Americans at least $28.3 billion each year.

Financial exploitation can take many forms. It may involve a sophisticated online scam or identity theft, but it can also happen much closer to home. A person may misuse a power of attorney, gain access to a bank account, use a parent’s credit card, pressure them into making gifts, manipulate them into changing beneficiaries, or take advantage of their trust.

And the person involved doesn’t necessarily have to be a stranger. The CFPB warns that financial exploitation can involve family members, friends, caregivers, fiduciaries and other people who have gained an older adult’s trust. So what can you do?

Start by Understanding Your Parents’ Financial Picture

You don’t need to take control of your parents’ finances to help protect them. In fact, the goal should be to help them maintain as much independence as possible while creating safeguards for the future. Start by having a conversation.

Know, generally:

• Where their bank and investment accounts are held
• What types of insurance they have
• Who is named in their wills and other estate documents
• Who has power of attorney
• Who their trusted contacts are
• Which financial professionals, attorneys and other advisors they work with
• Who provides care or services in their home

You don’t necessarily need account numbers or passwords. What matters is knowing what exists, where it is and who is authorized to help manage it. That information can become invaluable if your parent becomes ill, experiences cognitive decline or suddenly finds themselves the target of fraud.

Put Some Simple Safeguards in Place

A few relatively simple steps can make a meaningful difference. Consider helping your parents:

• Keep technology current. Make sure computers, phones and other devices receive security updates and have reputable antivirus and security software.
• Protect their passwords. Help them establish a secure system for managing passwords rather than relying on the same password everywhere.
• Protect their credit. Consider credit monitoring and, when appropriate, a credit freeze.
• Turn on account alerts. Many banks and credit card companies offer text or email alerts when transactions occur. These can provide an early warning when something unusual happens.
• Reduce unwanted calls. Use call-blocking features or apps, and encourage your parents to let unfamiliar numbers go to voicemail.
• Create financial visibility. With your parent’s permission, consider arranging for a trusted family member to receive duplicate statements or alerts.
• Establish trusted contacts. Many financial institutions allow customers to designate a trusted contact who can be notified if there are concerns about possible financial exploitation. A trusted contact does not automatically gain access to the person’s money.
• Meet their advisors. If your parents have a financial advisor, attorney, CPA or other trusted professional, make an introduction. Building those relationships before a crisis occurs can make a significant difference later.

Be Present

Perhaps the most important protection isn’t a password, an account alert or a credit freeze. It’s you. Older adults can become more vulnerable to exploitation when they are isolated, experiencing health problems or struggling with cognitive decline. Staying connected gives you a better opportunity to notice when something doesn’t seem right.

Watch for sudden changes in spending, unexplained withdrawals, unusual gifts, new people becoming involved in finances, changes to beneficiaries, unpaid bills or someone else attempting to control who your parent talks to or how they manage their money. These can be warning signs of financial exploitation. Most importantly, don’t be afraid to ask questions.

Protecting your parents isn’t about assuming the worst about everyone around them. It’s about making sure the right safeguards are in place before they’re needed.

Don’t Wait Until There’s a Problem

At Kennedy Financial Services, we believe life planning is about more than investments and financial statements. It’s about helping people prepare for the circumstances life may bring—and protecting the people who matter most. If your parents haven’t reviewed their estate documents, powers of attorney, beneficiary designations and financial safeguards recently, now is a good time to start the conversation.

Life gets busy. Sometimes it gets downright crazy. But if something needs to be done to protect the people you love, don’t wait. Do it now. Because they need you today—and someday, that may be you.