Savings tips for 2021
A growing concern of gerontologists, financial regulators, and law enforcement is the increasing number of cases of elder financial abuse, often due to diminished mental capacity. This includes mild cognitive impairment as well as dementia and in the beginning it is not easy to recognize. It can accelerate quickly or slowly. Every case is different.
Many of our clients are providing care for their aging parents. Care encompasses a variety of situations, whether it is assisting with the activities of daily living, managing healthcare needs, or overseeing financial affairs. Knowing when to step in and provide assistance is not always obvious. Also, the offer of care from a child can sometimes feel hurtful to independent folks. Many of our senior generation feels that their financial affairs are deeply personal and resent any attempted intrusion into their privacy.
Warning Signs of Diminished Mental Capacity
Warning signs can include difficulty with:
(Keep in mind, these can also be signs due to stress, injury, or other disorder.)
Types of Financial Elder Abuse
Diminished mental capacity can make someone an easy target for predators. In particular, those elders who are socially isolated, have recently lost a spouse, or have been hospitalized are attractive and vulnerable to predators. Believe it or not, predators are most often family members, followed by scammers and caregivers.
AARP, along with the Virgina Tech Center for Gerontology, published a study that suggests one in five older adults become a victim of financial exploitation. On average, the victim loses $120,000.
Financial elder abuse is the illegal or improper use of their assets, including:
If you believe that you or a loved one is being victimized, contact your local law enforcement as well as the appropriate state agency. In Illinois it is the Adult Protective Services hotline at 866-800-1409. It is also appropriate to contact your attorney.
As your financial partner, Mosaic Fi believes our responsibility includes monitoring our own policies and procedures to make sure we are following all fiduciary guidelines. Through our compliance process we regularly review client situations for any out of the ordinary indications of potential fraud or abuse.
Red flags we will look for include:
Red flags for family members (in addition to those listed above)
Protective Measures for Clients
Preemptive measures can help avoid or mitigate the potential opportunities for financial elder abuse. We suggest you:
As fiduciaries, our ethical and legal obligation to our clients is to act solely in their best interests. We welcome the opportunity to partner with you when or if you are helping a parent or loved one.
Jenifer Aronson is the Founder of Mosaic Fi.