Elder financial abuse is a crucial issue that requires our undivided attention, especially in a world where financial transactions have become more complex and varied. At Legacy Private Trust Company, we understand the importance of safeguarding the financial well-being of seniors. A significant step in this direction is recognizing and understanding the patterns that indicate potential financial exploitation.
Defining Financial Elder Abuse
Financial elder abuse encompasses a range of illegal or improper actions, including theft, fraud, and misuse of the elder’s credit or assets. In Wisconsin, for instance, 22% of all reported elder abuse-related crimes in 2021 were linked to financial abuse (Source: Wisconsin’s Annual Elder Abuse and Neglect Report 2021). Recognizing the red flags in checking and transaction patterns, account changes, and behavioral shifts is crucial in combating this issue.
Identifying Abnormal Checking and Transaction Patterns
The first red flag in potential elder financial abuse is noticeable changes in checking and transaction patterns. Regular monitoring of financial activities can help in the early detection of unusual occurrences. Signs such as “out-of-sync” check numbers, frequent bounced checks and overdraft fees, uncharacteristically large withdrawals, increased account activity, and the mysterious disappearance of funds or assets indicate possible financial fraud. It’s essential to stay vigilant and recognize these warning signs, as they can often be subtle yet indicative of larger issues.
The Role of Third-Party Transactions and Caregiver Payments
Another area of concern involves transactions made to third parties or caregivers. It is not uncommon for elder caregivers to be overcompensated or paid more frequently than necessary. Unfortunately, those closest to the senior, including family members and caregivers, are often the perpetrators of this kind of financial abuse. Observing the flow of money towards these third parties is critical. Large transfers or irregular payment patterns to caregivers should raise an immediate red flag and warrant further investigation.
Account Changes and Documentation Alterations
Alterations in account details or documentation can be a significant indicator of financial elder abuse. This often occurs without the knowledge of the vulnerable individual. It’s crucial to keep an eye out for any recent changes, especially in the case of vulnerable adults who may not be fully aware of the extent of their financial exploitation. Fraudulent activities might include the unauthorized transfer of assets, particularly real estate, or forging the senior’s signature on financial documents or titles. Monitoring changes or additions of authorized signers on bank accounts or changes in the institution’s signature cards is a proactive step in preventing financial abuse.
Behavioral and Physical Changes as Indicators
Financial abuse doesn’t just leave a paper trail; it often manifests in the physical and behavioral changes of older adults. Significant shifts in appearance or demeanor can be telling signs. If a senior appears disheveled, forgetful or confused more often than not, it could indicate underlying issues, including financial exploitation. It’s also important to note if the elder is accompanied by a companion who appears overly controlling or involved in their financial decisions. Be wary of scenarios where the senior is overly excited about winning sweepstakes or lotteries or if they are divulging financial information to unknown people or agencies.
Taking Action: Reporting Financial Elder Abuse
If you observe any of these warning signs in someone you know or love, it is imperative to take action. Reporting suspected financial elder abuse can help protect the individual from further exploitation and bring the perpetrators to justice. In Wisconsin, concerned individuals can contact the Elder Abuse Hotline or visit ReportElderAbuseWI.org for guidance and support.
At Legacy Private Trust Company, our commitment is to manage your assets efficiently and ensure the financial safety and well-being of our clients. Understanding and recognizing the signs of elder financial abuse is our responsibility. We can work together to create a safer financial environment for our seniors by staying informed and alert.
If you are a Legacy client and have questions, please do not hesitate to contact your Legacy advisor. If you are not a Legacy client and are interested in learning more about our approach to personalized wealth management, please contact us at 920.967.5020 or connect@lptrust.com.
This newsletter is provided for informational purposes only.
It is not intended as legal, accounting, or financial planning advice.
