We’re all exhausted from scam calls, emails, threats, and so on, but hopefully, we’re mostly on the alert, and successfully fending them off. How are our elderly loved ones faring? Not so well: an FBI analysis from 2024 shows that fraud against seniors is on the rise, and the losses are adding up. Read on to understand the problem, and develop action plans to protect the older folks in your life.
Targeting Seniors
With scams on the rise, and impacting all of us, LifeGen Law Group points out that the most affected are seniors, given that they are often both more lucrative and easier targets than younger people: “According to the FBI’s 2024 IC3 Annual Report, the bureau received nearly 150,000 complaints from individuals aged 60 and over, totaling almost $5 billion in losses, with an average loss of $83,000….Fraud against seniors appears to be increasing, with the latest report showing a 46% rise in complaints compared to the prior year….” Experts point to three reasons why seniors are prime targets for scammers:
- First, they are more likely than members of younger generations to have assets worth stealing — i.e., savings accounts, retirement funds, paid-off mortgages, and Social Security income, for example.
- Second, seniors are generally less tech-savvy than younger individuals, making them easier targets for scammers who use sophisticated internet-based schemes. Compared to other generations, seniors are more likely to click on links in phishing emails or fall prey to spoofing schemes, as well as be duped by scams involving cryptocurrency, tech support, and identity theft.
- Third, many seniors experience cognitive decline and diminished capacity, which can make it more difficult to detect red flags or manipulative tactics.
Though estate planning has not been typically associated with scam prevention, lawyers point out that in fact, several estate planning tools, proactively put in place, can help protect elderly loved ones from devastating acts of fraud. For starters, consider for example, the various ways in which a durable power of attorney can come in handy for family members concerned about their elders:
Power of attorney is a powerful yet versatile estate planning tool that allows seniors (or anyone else, for that matter) to appoint another person (the “attorney-in-fact”) to handle their affairs in the event that they become incapacitated. A power of attorney is referred to as “durable” because the authority granted by it continues in effect even if the principal becomes incapacitated. Durable power of attorney can be an effective tool for preventing scams against seniors because it allows the principal to authorize another person to handle — or at least monitor — their financial affairs. For example, a power of attorney could authorize an attorney-in-fact to monitor a senior’s accounts, pay their bills, and step in if necessary to stop unusual transactions. While there’s nothing stopping a senior from voluntarily giving someone else access to their accounts, a durable power of attorney makes it official and ensures that the authority granted survives the senior’s incapacity.
Like most estate and care planning tools, it’s key to put a power of attorney in place before needs become critical: a power of attorney must be authorized before capacity declines impact judgment, as attorney Paul W. Norris of Stark & Stark explains:
A power of attorney is a written instrument pursuant to which the principal authorizes another individual to undertake actions on their behalf which typically involves their finances, real estate, or other real property….People may also execute a health care power of attorney which allows another to make decisions concerning their health care….At the time the power of attorney is executed, the principal must be competent in order to enter into the arrangement whereby they grant a third party the discretion which is set forth in the instrument. The…discretion allowed in a power of attorney, can vary greatly and is entirely dependent upon what the person issuing the power of attorney is willing to grant….. Once the power of attorney is executed, it can be utilized while the individual remains competent, or it can take effect should the principal become incompetent.
Safeguarding Assets: Trusts
Another action that can be incredibly important when considering both the long term care needs and the estate plans of elderly loved ones is the creation of a trust, which can both protect assets and set out the conditions for their use, as Branson attorneys explain:
- A trust is an arrangement whereby one person (the grantor) transfers ownership of money, property, and assets to another person (the trustee) to hold for the benefit of a third person (the beneficiary). There are two major types of trusts — revocable trusts, which allow the grantor to make changes to the trust’s terms during their lifetime, and irrevocable trusts, which generally do not.
- Both revocable trusts and irrevocable trusts can be effective tools for scam prevention because they allow the grantor (i.e., a senior) to entrust their assets to a trusted person (typically a child), who is then legally obligated to manage the trust’s assets only in the interests of the beneficiary.
- If a senior begins to have trouble managing their assets — say, by becoming the victim of a scam — the trustee can potentially prevent future scams by monitoring all transactions …..Trusts are highly customizable to the needs of each family….
Further Protection: Trustee Bonds
When any type of trust is established, one or more trustees are named to administer the assets in them, based on the arrangements specified in the trust agreement. Trustees have fiduciary obligations and are held to exceptionally high legal standards, “the most important of which are the duties of loyalty and care, and the duty to act in accordance with the terms of the trust agreement.” Given the seriousness of the role, trustee bonds are often required. Essentially, a trustee bond is a specific type of fiduciary bond that protects the interests of the trust and its beneficiaries in accordance with applicable state law. As a leading national provider of many types of fiduciary bonds, Colonial Surety makes it easy and efficient to obtain trustee bonds: Just get a quote online, fill out the information, and enter a payment method. Then, simply print or e-file the bond from anywhere.
Learn More See Video Get a Quote: Trustee Bonds
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