It’s becoming a common theme on the evening news: an older adult lost their life’s savings at the hands of a scammer. Not only does it make you angry, but it also causes you to start worrying about your own elderly parents.
No adult child wants to take away their parents’ autonomy and independence. However, there are safeguards they can put in place to ensure their wealth stays out of the hands of con artists.
The elements of a robust estate plan
Scammers often target older people because of their trusting nature, cognitive decline and unfamiliarity with technology. The various components of an estate plan can work together to provide a strong defense against predatory tactics.
The first step is for your parents to name a power of attorney (POA). By having a trusted person handle their legal affairs, you and your parents have the assurance that someone is always looking out for their financial interests. The POA can monitor bank accounts, investments and other financial transactions, making it harder for scammers to succeed.
Establishing a trust is another way to help control and protect your parents’ assets. By appointing a trustee who is legally obligated to act in the best interests of your parents and limiting their access to substantial amounts of money, it’s less likely they will be duped into making large, fraudulent transactions.
Consider incorporating regular financial reviews into the estate planning process to catch any unusual activity early. These reviews also provide an opportunity to educate your parents about common scams and how to recognize them. Open communication is crucial to them enjoying their independence while reducing the risk of falling victim to scams.
Before discussing changes in their estate plan with your parents, you should discuss your concerns with someone who can suggest the best ways to structure the estate to provide maximum protection and prevent exploitation.