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Identifying and Protecting Against Elder Financial Abuse

Financial abuse of the elderly is a serious problem in Florida and throughout the country. Many elderly persons exhibit signs of diminished capacity to manage their own finances. Unscrupulous relatives and would-be financial advisers often take advantage of such persons.

Planning to Avoid Elder Abuse through Estate Planning

In a recent Investor Bulletin, the U.S. Securities and Exchange Commission and the Consumer Financial Protection Bureau offered advice on how to prevent elder financial abuse. Among other things, the federal agencies emphasized the importance of estate planning. A durable financial power of attorney is a document that grants an agent authority to manage money and property on your behalf. Similar to a health care power of attorney, a financial power of attorney can take effect when you are unable to act due to mental or physical disability.

Of course, a financial power of attorney may also be an instrument of elder financial abuse. Persons may use undue influence to obtain (or forge) a power of attorney. That is why the agencies advise, “As you are essentially giving financial decision-making authority to your agent, it is critical that he or she be someone you can trust.” And as with any estate-planning document, you should consult with an experienced attorney before you make or enter into any document that impacts your financial well-being.

In addition to having a financial power of attorney, it is important your investment advisers know who to contact in the event of your disability. The agencies recommend providing any financial professional who manages your assets with written instructions on who to contact in the event of an emergency. This does not mean your emergency contact will have authority to make financial decisions on your behalf; that still requires a financial power of attorney. The agencies also suggest you may wish to give a close relative or other trusted person access to your financial information; for example, you might ask your broker to send duplicate account statements to your child.

How to Provide Financial Assistance to the Elderly

The agencies also offer advice for providing assistance to elderly persons who may have diminished financial capacity. “Be on guard for any sudden changes in investments that seem out of keeping with the loved one’s longstanding goals,” the bulletin says, noting these may be signs of confusion or financial exploitation. And if you hold someone’s financial power of attorney, it is important to fully understand your responsibilities and identify any potential fraud.

If you have reason to suspect an elderly friend or relative has been the victim of financial exploitation or abuse, you should also advise them to seek the aid of an experienced Florida elderly abuse and financial exploitation attorney. Contact Boca Raton attorney Gregory Tendrich, P.A., immediately.

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