Four Ways to Keep Seniors’ Finances Safe

In our latest blog, we covered four of the most common scams targeting senior citizens. As fraud rates rise, we’ve been counseling our clients on how to protect themselves and their families from these cons. Here are four ways you can safeguard against senior financial exploitation:

1. Gather a support team

The first way to help keep seniors’ finances safe is to make sure a support team is put in place. Misfortunes can befall us at any age, but seniors should especially be prepared in case of illness, injury, or fraud. Money troubles can thrive in isolation.

At a bare minimum, an updated estate plan needs to be in place. This should name trusted individuals with Financial and Healthcare Powers of Attorney. These persons can step in and make money or medical decisions for a senior in the event they can’t handle those decisions themselves.

Those powers often spring into effect only after the named individual is deemed unable to make their own decisions. However, it’s possible for mom or dad to give authority to an adult child before impairment, to delegate money management tasks before an issue arises. This can greatly help older parents, but it must be done with great care. The individual with those decision-making powers should be fully trusted to act in the parent’s best interest in all cases.

Other trusted professionals should also be part of most teams. For instance, the Wealth Advisors at Sound Stewardship often facilitate multi-generational planning and conversations, helping mom or dad communicate as needed to the kids. An attorney should have been involved to draft the plan. A tax accountant may be needed to handle tax returns.

With a good support team like this in place, someone is more likely to catch any funny business going on. Having multiple individuals empowered to help provides extra eyes to aid prevention.

2. Have a conversation

Once the team is in place, the next step is communicating that to family members. For some families, this is also the hardest.

It often makes us cringe to talk about finances, which are considered too personal. Also, these conversations could wade into complicated territory surrounding account balances and potential inheritances. Family dynamics play a big factor.

However, it can become much more difficult to gather financial details in the middle of crisis. If a family member is named as a Financial Power of Attorney, for instance, there are things that they should know now (like the fact that they are the Power of Attorney!). Specific questions to address with your trusted love one:

• Who are your advisors? It can be helpful to know contact info for financial planners, attorneys, accountants, powers of attorney, and bankers. Medical professionals, like doctors, may be helpful as well.

• Which banks/custodians do you have assets with? Family members don’t need to know how much is with each institution, but they should know where to look if something happens to their loved one. This may have been accomplished in the above, if your advisors are holding this information on your behalf.

• Where are your important documents? This does not mean giving access to important documents now. But where would your trusted helpers find important documents like legal documents, account statements, or passwords. Are there individuals that hold these details for you (like the advisors mentioned above)? It’s important that these documents stay secure until they are indeed needed.

After the critical conversation, make sure you schedule the next one. Regular checkpoints are needed to address changes that arise, as one son discovered when he found out his father had experienced financial abuse.

3. Stay safe online

With the advent of the internet, our capacity to access useful information has grown exponentially. Unfortunately, so has the ability of dishonest people to create scams.

An important part of keeping mom or dad safe from financial issues is following best practices to protect information and assets online. This is good advice for us all, of course. Seniors should take steps to:

• Use robust passwords and consider a password management system that can help keep these passwords complex and secure.
• Avoid opening attachments or links in unsolicited emails. Hackers have created very sophisticated “phishing” attacks to gain access to personal computers.
• Monitoring account activity and credit reports. Services like Zander Insurance or Credit Karma can also alert you to potential security breaches.
• You may even need to take the extra step of freezing credit entirely. Here’s how.

4. Set up Trusted Contacts

What are “Trusted Contacts”, you ask? Regulatory bodies now require financial institutions to ask if you want a trusted contact attached to your account. If a bank or investment custodian suspects fraud, they can pause the transaction to ask the designated trusted contact to check in with the owner. They may also reach out if they have reason to believe the client is showing signs of major cognitive decline.

A Trusted Contact can’t view the account balance, initiate or approve transactions—the final approval stays with the account owner. The Trusted Contact simply acts as a second line of defense against suspicious activity.

Who should you designate? Choose someone in that financial support team who knows enough about you and your finances to ask the right questions if they are called. Remember, a trusted contact won’t have control of the account, like the Power of Attorney, but they will play an important role in keeping your finances safe. So choose wisely!

Want help getting your finances—and financial security—in order? We can help! Start the conversation with one of our advisors.

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