Two Ways to Protect Yourself from Financial Abuse.
Posted on October 19, 2017
“They were old. They didn’t even know what their home was worth. I wasn’t about to tell them either. Instead, I made an offer for $40,000 less than market value and they took it.”
The young man was smiling when he told me what he’d done.
I was shocked.
Only later did I understand my discomfort. It had a name: elder abuse.
I’d always thought elder abuse involved physical injury. But it can also come in the form of financial abuse, punishable by law, and can carry an award that is triple the damages.
I learned this recently at a seminar sponsored by Fitzwater Meyer Hollis & Marmion, LLP, one of Oregon’s largest Estate Planning and Elder Law firms.
In that seminar, Wes Fitzwater, Esq., outlined the seemingly casual actions of others that are considered elder (financial) abuse.
Financial abuse can come in two ways:
- Misappropriating an older person’s finances without having any financial relationship with them, such as the young man I spoke with had.
- “Borrowing” from an older person and failing to have a repayment plan, such as is often the case with children and grandchildren.
Think it won’t happen to you? Think again.
According to Fitzwater et al, quoting the National Institute on Aging, memory loss, decline in judgment and reasoning, personality changes and issues with language are signs of cognitive impairment.
Cognitive impairment begins as early as 65 years of age for 4-17 percent of people. Those numbers jump to 38-45 percent of the population for people 85 or older.
So you have an-almost 50/50 chance of cognitive impairment as you age.
That’s the bad news.
The good news is you can protect yourself two ways.
Protection No. 1: Put a Revocable Living Trust in Place.
As explained in my last blog, a Revocable Living Trust enables you to manage your income and assets, change the trust’s terms at will, and appoint a successor trustee.
It also allows you to “test” a successor trustee to insure he or she is acting in your best interest prior to the onset of any cognitive impairment. (It also saves your heirs time and additional costs after your death.)
Should you become unable to handle your financial affairs, you can stipulate under what circumstances your successor trustee will take over the management of your assets, note Fitzwater, et al.
In real estate transactions, we also recommend that our older clients have a younger family member present, not only to provide a “second set of ears,” but also to offer emotional support.
Protection No. 2: Ward Off the Root Cause of Financial Abuse: Dementia.
Dementia, a term used to define a host of cognitive and psychological changes, is not a natural part of aging, according to the Mayo Clinic.
In fact, simple lifestyle changes can often offset it, notes the Mayo Clinic.
- Ease off on the cocktails: Those who drink large amounts of liquor may have a higher risk of dementia; moderate amounts may have a protective effect.
- Clean up your diet: This will lower your cholesterol and ward off obesity, key contributors in dementia.
- Quit smoking: Some studies have shown that smoking in middle age and beyond may increase your risk of dementia.
- Get a sleep apnea test: People who snore and stop breathing frequently while asleep may have reversible memory loss.
- Drink plenty of liquids: Dehydration can result in dementia-like symptoms.
- Boost your B and D vitamins: Nutritional deficiencies can trigger dementia-like symptoms.
- Get moving: Set a target of 150 minutes of exercise a week, to manage your blood pressure.
- Play games with those you love: Social and mental stimulation, including games, puzzles and reading, may delay the onset of dementia.
To protect our clients’ privacy, anecdotes shared are based on true stories; however, names and specifics have been changed and/or combined into composites.