Financially exploiting seniors, defined as a party withholding or misusing the resources of an older adult, is one of the most common types of elder abuse, resulting in seniors losing approximately $28 billion annually, according to the National Council on Aging. This behavior has led to state and federal governments passing laws to safeguard seniors, but many only do so once it is apparent that elder financial exploitation is taking place, after which a senior may have already lost a considerable proportion of their wealth. Learn about the different forms of elder financial abuse, such as an unexplained or sudden life insurance policy change, and find out how a seasoned Texas estate planning attorney can assist seniors experiencing this issue; call the Law Office of Troy M. Moore, PLLC at (281) 970-8039 to arrange a confidential meeting.

Understanding Elder Financial Abuse

Per the National Institute on Aging, elder financial exploitation takes place when an older adult experiences the theft or misuse of their belongings or money. Some examples are as follows:

Forging checks
Preventing an older adult from accessing their financial information or money
Using a senior’s Social Security or retirement benefits without their knowledge
Using an older adult’s bank accounts and credit cards without permission
Changing bank account names, as well as beneficiary names on life insurance policies and a Last Will and Testament, and transferring home ownership without authorization

Preparing for the risk of financial abuse can help family members protect their loved ones.

What Is an Example of Financial Abuse of the Elderly?

A typical example of elder financial exploitation is when a senior experiences isolation from their family and friends and becomes dependent on other parties for support and care. In this situation, the older individual can become vulnerable to fraud, pressure, or collusion, including in-person or telephone phishing scams, and may even encounter a third party forcing or persuading them to transfer assets to someone else.

What Is an Unauthorized Life Insurance Policy Change?

One common instance of an unauthorized change to a life insurance policy is when another party changes the policyholder’s beneficiary designations either fraudulently or without their consent. Below is an outline of how this can occur, as well as the implications of such changes to a life insurance policy.

Forged Signature

Forging the policyholder’s signature on a beneficiary change form is one way this can happen. While illegal, proving that this took place can be difficult and requires forensic methods, like handwriting analysis.

Undue Influence and Lack of Legal Capacity

Another scenario relates to a party manipulating or coercing the policyholder into altering a life insurance policy’s beneficiaries. This may occur if the policyholder is particularly old, unwell, or has cognitive impairments.

Since policyholders require legal capacity to understand the consequences of making a beneficiary change, any alterations made when a policyholder is incapable of making decisions are void. This applies when a policyholder has dementia or mental disabilities or is under the influence of alcohol or drugs.

Consequences of Unauthorized Beneficiary Changes

Life insurance policies contain the specific procedures to follow to change beneficiary names, such as the correct method of form filing and whether a certain number of people have to witness the signing of the beneficiary change documentation. A failure to follow these procedures may result in the insurance company deeming the beneficiary change as invalid.

Unauthorized beneficiary changes may have other consequences. For example, it may lead to lengthy and costly court cases between potential beneficiaries while also preventing legitimate beneficiaries from receiving life insurance policy proceeds. Depending on the individual’s financial situation, changes like these could also impact digital assets. Understand more about elder financial abuse, including an unwarranted life insurance policy change, by contacting the Law Office of Troy M. Moore, PLLC; call us today to discuss your legal concerns with an experienced Houston estate planning attorney.

What Are the Red Flags for Elder Financial Exploitation?

Recognizing the red flags for elder financial exploitation can help prevent this form of abuse. These signs include the following:

The senior is nervous, fearful, or confused when discussing finances.
The elderly individual cannot remember specific transactions.
The senior offers questionable or contradictory statements concerning financial transactions.
The elderly person’s financial habits, such as the size and frequency of bank withdrawals, have changed significantly.
The senior has interacted with someone who asks about their accounts and attempts to make changes without consent, and/or this same party prevents the senior from speaking to loved ones alone.
The presence of suspicious signatures or changed numbers on the elderly individual’s financial documentation.
Unexplained beneficiary changes on the senior’s life insurance policies or sudden address changes on their bank statements.

A concerned family member could benefit from reviewing the signs of elder abuse so they can effectively advocate for their loved ones.

Tips for Preventing Elder Financial Abuse

Protecting finances, seeking help from loved ones, and choosing suitable powers of attorney and executors can help avoid the financial abuse of seniors. Here are some tips for preventing elder financial exploitation.

Safeguard Finances

Elderly individuals can safeguard themselves from financial exploitation by ensuring they have organized financial records and know about the specific funds they have in every account. Moreover, seniors may speak with a financial advisor, attorney, or bank representative to discuss their options for property and money management if they become incapacitated. The following are other steps seniors can take to protect their finances:

Keeping account statements, checkbooks, and other confidential information secure
Reviewing credit reports for suspicious financial activity
Not providing sensitive information, such as account numbers or a Social Security number, to individuals who initiate calls with the senior
Requesting written details and sharing these with an attorney or financial advisor before signing documents
Making payments via credit cards or checks, rather than cash, to ensure there are transaction records

An experienced attorney may be able to suggest strategies and systems to help prevent financial fraud.

Get Help from Friends and Family

Friends and family can help prevent the financial exploitation of seniors by maintaining an awareness of how this can happen, including common frauds and scams aimed at obtaining sensitive information to steal an elderly person’s money or identity, and looking out for warning signs of potential financial abuse. If a senior’s loved ones suspect financial abuse, they can speak to the elderly individual to determine involved parties, identify lost resources, and contact protective services, local police, and financial institutions for assistance.

Select Appropriate Powers of Attorney and Executors

When drafting a Last Will and Testament or selecting a power of attorney, seniors might wish to consider selecting a trusted person who is likely to follow their wishes and avoid choosing an individual in financial difficulties. By consulting with an experienced estate planning attorney, seniors can precisely customize the duties of these nominated parties and determine what they can do on the elderly person’s behalf. Assigning these roles can help reduce a senior’s chances of becoming a financial abuse victim, particularly if the elderly person nominates multiple people to share these responsibilities.

Appoint Trusted Contacts

In addition, seniors may appoint trusted contacts to their financial accounts, who receive limited account details but cannot make transactions for the account holder. Alternatively, it is possible to appoint view-only parties; these individuals can view transactions but are unable to access funds. Both of these choices allow financial institutions to contact trusted individuals in the event that they cannot reach the senior, such as when a bank wishes to alert the account holder of suspicious transactions or withdrawals.

Simplify Finances

Having a large number of financial accounts with multiple institutions increases a senior’s risk of financial exploitation. To mitigate this, consider closing accounts that are rarely or never used and consolidating finances; this also makes it far easier to spot unusual financial activity. Alongside this, if paying bills manually, think about arranging automatic payments, as this reduces fake invoice exposure and helps avoid scams linked to paying bills.

Contact an Experienced Texas Estate Planning Attorney To Learn More

As individuals age, they might experience cognitive decline, which impacts their decision-making and reasoning abilities, making them vulnerable to fraud, unauthorized life insurance policy changes, and other types of financial abuse. Those who suspect that they, or a loved one, is a victim of elder financial abuse can consult with a knowledgeable Texas estate planning lawyer for legal assistance. Call the Law Office of Troy M. Moore, PLLC today at (281) 970-8039 to schedule an initial consultation.

Elder Financial Abuse And Life Insurance Policy Changes