As the greater portion of our community transitions into and through their senior years, it will be important for friends and family to watch for the signs of diminished capacity and elder financial abuse. Either problem can affect a senior independently of the other, but very often diminished capacity and elder financial abuse go hand in hand.
The physical and cognitive changes involved with aging cause some processes to slow down, but just being slower is not necessarily an indication that a person's mental faculties are not still sharp. The National Institute on Aging estimates that about 20 percent of people 85 and older will ultimately suffer from a more compromised ability to understand information, weigh alternatives and make decisions consistent with their values and goals. The concern is that those who lose the ability to make sound decisions, or to remember past decisions, may become vulnerable to self-destructive behaviors and even financial scams.
Congressional testimony by the FBI indicates that financial scammers target older Americans because of their concentrated wealth, and know that memory impairment makes it difficult to understand financial schemes. It doesn't help that people born in the 1930s, 1940s and 1950s were raised to be polite and trusting, and are less likely to report fraud. Add to this an interest in "cureall" medicines and get-rich schemes and you have a target-rich environment for criminals seeking ideal victims.
Common "red flags" that may indicate someone may be experiencing elder financial abuse include:
- Giving power of attorney to someone who appears inappropriate.
- A lack of control over bank and investment accounts.
- An unexplained change in mailing address.
- Consistently deferring unanswered questions to a family member or caretaker.
- Inability to articulate the reasons behind financial decisions that were made or questionable transactions that took place.
- Sudden isolation from friends and family.
- Sudden, unexplained or unusual change in the financial transaction patterns.
- The sudden appearance of a new individual involved in the senior's financial affairs.
Advisers are often trained to identify suspicions of diminished capacity and financial abuse, but without a client's written authorization they aren't typically allowed to alert family members.
The responsibility for contending with diminished capacity and preventing any form of elder abuse largely rests on the shoulders of friends and family. If you suspect any form of elder abuse has occurred or is occurring you should tell someone. To report elder abuse contact Adult Protective Services. If someone is in immediate danger, call 911 or the local police. Remember, you don't need to have proof to report suspicious. Trust your instincts.
Lewis Chamberlain, AIF, CIS is an independent investment adviser and owner of Next Level Investment Management. Lewis can be reached at 243-9888 or lewis@nextlevelinvestor.net
© 2011 Record Searchlight.
SOURCE: Redding.Com
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