Scammers have come a long way from pretending to be a foreign prince. Their schemes have become more elaborate and more convincing, especially when they have advanced technological skills.
How can you protect your parents from losing their life savings to these financial schemers?
Targeting the elderly
Older Americans aged 60 and over are the primary target of scammers. They tend to have more accumulated wealth, including savings, homes and pensions. Elderly people also may not be as familiar with the latest technology and best practices for online security. Therefore, they are more easily deceived through phishing, fake websites and other digital scams.
Since 2019, the losses associated with financial scams have nearly tripled, reaching over $12.5 billion in 2023. Not only is it unlikely that the victims will be able to recover their money, but they may also be stuck with a hefty tax bill.
However, there are several estate planning tools an older person can use to protect themselves from financial exploitation and help ensure that their assets are being managed according to their wishes, such as:
- Appointing a trusted person as a durable power of attorney (DPOA) to manage their financial affairs if they become incapacitated or start to experience a mental decline.
- Placing their assets in a revocable trust to be managed by a trustee who will act in the person’s best interest. They can provide clear instructions on how assets should be managed and distributed.
- Sharing accounts with a trusted family member who can monitor for unusual activity.
- Having a financial advisor or family member regularly review financial statements and transactions to detect irregularities or unauthorized activities.
It’s crucial to have an open and honest conversation with your parents regarding financial exploitation. Discuss news articles with them so they are aware of possible scams, and encourage them to talk to you before making any significant changes to their online accounts. They have worked hard and saved to enjoy their golden years in comfort. No one should be able to take their money and dignity.