Prevent Financial Elder Fraud

Article shared from Fidelity Investments

June 2017

Ten Ways to Stop Financial Elder Fraud

As our parents get older, we may find ourselves monitoring their lives from a different perspective. Conversations will go beyond their latest trip destination and how they’re feeling. We’ll start to evaluate their financial health, and seek to reduce the potential for elder financial abuse. The challenge is how to work with our parents to ensure they’re not being taken advantage of, while respecting their independence. Although each of us will face a different scenario—and it might not be a parent, but any elderly loved one whose financial safety is at stake—there are 10 steps you can take now, before a crisis develops.

1. Begin the family conversation. You start by talking to each other. It’s a good idea to open the conversation with your own situation. You might say,” I want an extra set of eyes on my financial accounts, to let me know if something strange is going on. Would you like to get alerts like that, if something happens to your accounts? I can arrange it for you while I’m doing my own.” You make it a two-way street. Talking about money is hard, but don’t wait until it’s too late. Do it now, while you have the opportunity and there are still money and financial assets to protect. Don’t judge your elderly family members, or talk down to them. Use diplomacy, and you’ll have a better chance of getting willing participants in resolving these issues.

2. Create a family financial management plan. A comprehensive plan is not developed in one session. Start with the basics. You should have access to key financial players such as your loved ones’ lawyer, accountant, financial planner, and/or broker.

3. Know what key documents have been completed. It’s important to know what has and hasn’t been done. Ask questions about key financial and legal documents. When were they created? Are they still current? Where are they stored? Ask whether your parents have designated beneficiaries on bank accounts, investment accounts, and insurance policies. Here’s a list of the important documents you will need: a will, a living will, separate durable powers of attorney for health care and financial decision making, deeds, insurance policies, investment accounts, bank accounts, income statements, retirement accounts, all outstanding loan documents, and current bills.

4. Be alert to changes in financial accounts. There is no flashing red light when people start to lose control of their finances. Here are some of the warning signs you should be aware of: confusion about what bills have been paid, changes in spending habits, bounced checks, and late-payment charges on credit cards. There are other steps you can take to help monitor changes in a family member’s financial situation:

• Hold family financial meetings on a regular basis.

• Have someone in the family create a “personal balance sheet” to keep track of income and expenses.

• Establish power of attorney on key accounts.

• Arrange to pay all bills electronically and automatically.

5. Monitor credit reports. Simplify your loved ones’ finances. By reducing financial responsibilities, there is less opportunity for confusion and potential financial mismanagement. Here are a few key steps:

• Reduce the number of credit cards.

• Create a budget that limits expenses.

• Set up automatic bill pay for expenses, and direct deposit for any income.

6. Keep up to date on local scams. Educate your parents about the latest scams. Sign up for AARP’s free Fraud Watch Network, to identify what may be happening in the part of the country where your parents live. Remind them to never reply to any request by email, regular mail, or phone for personal information such as a Social Security or credit card number, or to pitches to purchase a product or investment that they didn’t request. Consider signing your parents up for the National Do Not Call Registry. The Data & Marketing Association’s (DMA’s) Mail Preference Service (MPS) lets you opt out of receiving unsolicited commercial mail from many national companies for five years.

7. Maintain a social connection. Isolation creates an environment where financial problems can grow. Your family may be dispersed across the country, but understanding whom your loved ones are interacting with is important. If you don’t live nearby, stay connected frequently by phone, email, and/or social media.

8. Assign money management jobs. Money management can be simplified by dividing the task into pieces. You can assign these responsibilities based on proximity to the parent, and expertise in a given area. Here are some of the categories you could use when deciding who manages what:

• Reviewing credit card accounts, paying bills, and checking credit reports.

• Monitoring usage of bank accounts and debit cards on a daily basis.

• Managing brokerage accounts and investing activity.

 9. Leverage technology. Today there are many tools to help fight fraud. One to consider is FidSafe®, a free, secure, online safe-deposit box to save digital backups of essential documents, such as bank and investment account statements, birth certificates, insurance policies, passwords, tax records, wills, and more. EverSafe sends “suspicious activity” alerts, including warnings about unusual withdrawals, missing deposits, questionable charges, changes in spending patterns, and much more. With both of these services, the people who are granted access to the financial documents can include friends, a family lawyer, or relatives.

10. Hold family financial meetings. When it comes to preventing elder financial abuse, regular family conversations about your loved ones’ finances are crucial. Try to hold this meeting at the same time, even if it’s only once a month, so that it becomes a habit.

SUMMARY

Take action to help prevent financial elder fraud.

Realize that your loved one is a potential target.

Assign money management jobs to trusted family members.

Involve multiple family members, to reduce potential for a single point of failure.

Keep up to date on local scams.

SIGN UP FOR: 

• AARP’s free Fraud Watch Network

• National Do Not Call Registry

• The Data & Marketing Association’s Mail Preference Service

Prevent Financial Elder Fraud

Article shared from Fidelity Investments

June 2017

Ten Ways to Stop Financial Elder Fraud

As our parents get older, we may find ourselves monitoring their lives from a different perspective. Conversations will go beyond their latest trip destination and how they’re feeling. We’ll start to evaluate their financial health, and seek to reduce the potential for elder financial abuse. The challenge is how to work with our parents to ensure they’re not being taken advantage of, while respecting their independence. Although each of us will face a different scenario—and it might not be a parent, but any elderly loved one whose financial safety is at stake—there are 10 steps you can take now, before a crisis develops.

1. Begin the family conversation. You start by talking to each other. It’s a good idea to open the conversation with your own situation. You might say,” I want an extra set of eyes on my financial accounts, to let me know if something strange is going on. Would you like to get alerts like that, if something happens to your accounts? I can arrange it for you while I’m doing my own.” You make it a two-way street. Talking about money is hard, but don’t wait until it’s too late. Do it now, while you have the opportunity and there are still money and financial assets to protect. Don’t judge your elderly family members, or talk down to them. Use diplomacy, and you’ll have a better chance of getting willing participants in resolving these issues.

2. Create a family financial management plan. A comprehensive plan is not developed in one session. Start with the basics. You should have access to key financial players such as your loved ones’ lawyer, accountant, financial planner, and/or broker.

3. Know what key documents have been completed. It’s important to know what has and hasn’t been done. Ask questions about key financial and legal documents. When were they created? Are they still current? Where are they stored? Ask whether your parents have designated beneficiaries on bank accounts, investment accounts, and insurance policies. Here’s a list of the important documents you will need: a will, a living will, separate durable powers of attorney for health care and financial decision making, deeds, insurance policies, investment accounts, bank accounts, income statements, retirement accounts, all outstanding loan documents, and current bills.

4. Be alert to changes in financial accounts. There is no flashing red light when people start to lose control of their finances. Here are some of the warning signs you should be aware of: confusion about what bills have been paid, changes in spending habits, bounced checks, and late-payment charges on credit cards. There are other steps you can take to help monitor changes in a family member’s financial situation:

• Hold family financial meetings on a regular basis.

• Have someone in the family create a “personal balance sheet” to keep track of income and expenses.

• Establish power of attorney on key accounts.

• Arrange to pay all bills electronically and automatically.

5. Monitor credit reports. Simplify your loved ones’ finances. By reducing financial responsibilities, there is less opportunity for confusion and potential financial mismanagement. Here are a few key steps:

• Reduce the number of credit cards.

• Create a budget that limits expenses.

• Set up automatic bill pay for expenses, and direct deposit for any income.

6. Keep up to date on local scams. Educate your parents about the latest scams. Sign up for AARP’s free Fraud Watch Network, to identify what may be happening in the part of the country where your parents live. Remind them to never reply to any request by email, regular mail, or phone for personal information such as a Social Security or credit card number, or to pitches to purchase a product or investment that they didn’t request. Consider signing your parents up for the National Do Not Call Registry. The Data & Marketing Association’s (DMA’s) Mail Preference Service (MPS) lets you opt out of receiving unsolicited commercial mail from many national companies for five years.

7. Maintain a social connection. Isolation creates an environment where financial problems can grow. Your family may be dispersed across the country, but understanding whom your loved ones are interacting with is important. If you don’t live nearby, stay connected frequently by phone, email, and/or social media.

8. Assign money management jobs. Money management can be simplified by dividing the task into pieces. You can assign these responsibilities based on proximity to the parent, and expertise in a given area. Here are some of the categories you could use when deciding who manages what:

• Reviewing credit card accounts, paying bills, and checking credit reports.

• Monitoring usage of bank accounts and debit cards on a daily basis.

• Managing brokerage accounts and investing activity.

 9. Leverage technology. Today there are many tools to help fight fraud. One to consider is FidSafe®, a free, secure, online safe-deposit box to save digital backups of essential documents, such as bank and investment account statements, birth certificates, insurance policies, passwords, tax records, wills, and more. EverSafe sends “suspicious activity” alerts, including warnings about unusual withdrawals, missing deposits, questionable charges, changes in spending patterns, and much more. With both of these services, the people who are granted access to the financial documents can include friends, a family lawyer, or relatives.

10. Hold family financial meetings. When it comes to preventing elder financial abuse, regular family conversations about your loved ones’ finances are crucial. Try to hold this meeting at the same time, even if it’s only once a month, so that it becomes a habit.

SUMMARY

Take action to help prevent financial elder fraud.

Realize that your loved one is a potential target.

Assign money management jobs to trusted family members.

Involve multiple family members, to reduce potential for a single point of failure.

Keep up to date on local scams.

SIGN UP FOR: 

• AARP’s free Fraud Watch Network

• National Do Not Call Registry

• The Data & Marketing Association’s Mail Preference Service