7 Ways To Protect Yourself From Family Fraud in Retirement
Written by
Jordan Rosenfeld
Edited by
Molly Sullivan
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Older adults, particularly seniors, are especially vulnerable to financial fraud — but not all of it comes from strangers, scammers or people on the internet. Family members can also engage in financial fraud.
While no one wants to have to plan for such an outcome, being prepared is the best way to prevent it from happening in the future. Estate planning and fraud prevention experts offered some tips to protect yourself from family fraud in retirement.
Keep an Eye Out for These Red Flags
Unfortunately, perpetrators of financial abuse can be anyone, including caretakers, lawyers, business associates, new friends and even family members, according to Darius Kingsley, a fraud and scam prevention expert and head of consumer banking at Chase.
Here are several immediate red flags to watch out for:
- Unusual financial activity: Signs that could point to financial abuse include unpaid bills, missing checkbooks, suspicious signatures, missing valuables and unexpected authorized users added to financial accounts. For any of these, contact your financial institution right away.
- Changes in ownership and responsibility: If you notice changes to wills, power of attorneys or any other financial plans, it could be a sign of financial abuse.
Form a Team
Make a financial care plan and form a team of trusted individuals to help you take care of your money as you age, Kingsley said. This team can include family, friends, accountants, lawyers and social workers who can help support your future plans.
“You can also designate a trusted contact to help manage financial accounts if you cannot be reached,” Kingsley said.
Automate and Monitor Finances Regularly
Automate all the bills you can, so that you’re not relying on a single individual to handle your every transaction, Kingsley advised.
“It is easier to have control of what comes in and out of your account when you set up bill payments that can be monitored by you and people you trust.”
Protect Personal Information
If you’re still dealing with any paper, shred documents with sensitive personal information as soon as you’re done with them, Kingsley suggested. Consider switching to paperless communications to avoid your personal information getting into the wrong hands.
Additionally, set up ongoing identity monitoring to alert you if there are changes to your credit report or if your information is found in a data breach or exposed on the dark web.
Stay Organized Legally
Consider obtaining or creating a few high-priority documents before your health or cognitive abilities are potentially compromised, such as a financial power of attorney and last will and testament, Kingsley suggested.
“A financial power of attorney authorizes someone you choose to make decisions about your money and property on your behalf if you are not available or no longer able to do so.”
Be sure you have a current and updated will and testament that includes all your accounts and assets, too.
“If there are changes, ensure to communicate changes to anyone involved and store the updated documents in a safe place,” he said.
Co-Trustees or Dual Signatures
The first thing that Phillip Reed, an estate and asset protection attorney at Reed Law PLC, recommends his clients do is to consider co-trustees or require dual signatures for major transactions. This shifts things from granting one person full control and puts limitations on the amount of money that can be moved or used at any given time.
“Sometimes you can assign different fiduciaries to oversee different areas of a person’s estate. It is important to have checks and balance provisions coupled with penalty provisions for any breach of fiduciary duties,” Reed said.
Doing this can provide a simple way to prevent impulsive or unauthorized decisions.
Regular Check-Ins and Reviews
Reed also recommended that clients have family meetings or regular check-ins. “This encourages transparency. Regular reviews by a neutral third party, like an attorney or financial advisor, can help uncover problems before they start or before they get too big.”
Also, requiring the power of attorney to provide quarterly or semi-annual statements of activity to a third party can help protect an incapacitated individual’s assets.
“Part of building a well-designed estate plan is about building systems that coordinate and work together, to ensure assets and relationships are protected,” Reed said.
Kingsley suggested the following resources for seniors who suspect fraud:
- AARP Fraud Watch: Call 877-908-3360 to be connected to trained fraud specialists and volunteers or get more fraud and scam prevention resources at its website.
- Eldercare Locator: Get connected to services for older adults and their families (like health, housing, insurance and more) at this government resource. You can also speak with its specialists on the phone at 800-677-1116.
- National Elder Hotline: Call 833-FRAUD-11 (1-833-372-8311), a free resource created by the U.S. Department of Justice (DOJ).
- National Center for Elder Abuse: Find information on government agencies, laws and other resources for your state.
- Equal Justice Initiative: Get help with fraud and scam prevention at this branch of the U.S. DOJ that’s dedicated to combating elder abuse, neglect and financial fraud and scams that target older adults.
The more protections you put in place before you need them, the less you have to worry about the worst coming to pass.
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