Are you in a situation where you think somebody may be taking advantage of your elderly parents? Don’t worry, you’re not alone. As sad as it is, it’s extremely common for people who exploit others for money to target older adults. In this situation, there are many ways to approach your parents and try to prevent them from spending.
This article will cover the signs that your parents are giving money away, why they are at risk, and all the ways you can try and help them.
Key Takeaways
Your parents may be victims of exploitation if they suddenly have large sums flowing out of their bank account, can’t pay bills, find new love interests, or are excessively generous.
Some key factors that make your parents more likely to be victims of exploitation are loneliness, isolation, poor mental health, and cognitive impairments.
You can prevent your parents from giving money away by talking to them, having family meetings, educating them, monitoring their finances, talking with a financial advisor, asking for power of attorney, and/or giving them a monthly budget.
5 Signs Your Parents Are Giving Away Money
Bill O’Leary, an estate planning attorney at Florida’s Legacy Planning Law Group, explains: “Our elderly are being scammed out of over 3 billion dollars every year. And a lot of people believe that’s a low number because there’s a fairly high rate of under-reporting.”
It’s important to identify the several signs to look out for that can indicate your parents are giving money away.
If you believe your parent is exhibiting any of these behaviors, you should investigate further to protect them and ensure they are not being exploited.
Sign #1: Lots of Money Leaving Their Bank Account
A good indication that your parents are giving away money is unexplainable sums leaving their account.
You must question any large amounts of cash that disappear, and if there is no reasonable explanation, you can assume it is going down the drain.
These transactions may be evidence of fraud and other malicious activities, so be vigilant in communicating with your parents and following their money.
Credit card bills should also be closely monitored.
Sign #2: Your Parent Is Excessively Generous
Another sign is that your parents spend more than they can afford on gifts for other people.
Whether they pay the bill at a restaurant or buy expensive jewelry, they must reconsider spending if they can’t afford it.
Some older parents may neglect the importance of money and just value the gift-giving experience.
In this case, you can try and work on a plan to moderate their generosity so they don’t get taken advantage of.
Sign #3: Unexplained Financial Difficulties
If your parents suddenly have trouble paying for bills or other common expenses, it could be a sign their money is going elsewhere.
Pay close attention to the flow of their money and be extra careful to spot irregularities.
If your parents suddenly can no longer pay their utility bill, they may be losing money to a scammer.
Sign #4: Sudden Love Interest
Sadly, the older your parents get, the more likely they are to be targets of a financial scam or abuse.
This includes someone getting close to your parents under the guise of a romantic relationship to take advantage of them and use their money.
If you notice your parent suddenly has a new love interest, you should be cautious and ensure the other party has good intentions.
Sign #5: Sudden Changes In Wills
Another indicator that your parent is being exploited is a sudden change in their will.
Typically, this will involve introducing a new recipient to the will who will receive a large portion of your parent’s assets.
This could signify that somebody is manipulating your parent into giving them certain assets when they pass.
Be sure to investigate why your parent made the change and to whom exactly their assets will go. Keep track of changes of your elderly parents' will and assets by using Trustworthy. Trustworthy's Family Operating System® allows you to store important documents and set access to people who need them.
Related: Estate Planning for Elderly Parents
What Increases Chances of Financial Exploitation
Knowing the factors that may make your parents more likely to be exploited is essential to prevent your parents from giving money away.
If you recognize these factors, you can prevent them from being exploited before it happens.
Loneliness
If your parent lives alone or does not get out to see people that often, they may feel lonely.
If they are lonely, they are likely easier to be manipulated by scammers or people close to them who offer some sort of companionship.
Isolation
Not only does isolation increase the chances that your parent will be lonely, but it also makes it harder to keep an eye on them.
If they are isolated and get exploited, there may be nobody around to notice.
It will be harder for you or other family to keep track of your parents’ finances and notice any of the signs we mentioned earlier.
Poor Mental Health
If your parent suffers from poor mental health, they are also more likely to be victims of exploitation.
If they suffer from depression or similar mental illnesses, they will likely feel lonely, sad, isolate themselves, and have similar negative emotions.
This may lead them to care less about their money or decisions.
Cognitive Impairment
Cognitive impairment is another major factor that may put your parents at a greater risk of financial exploitation.
In particular, conditions like Alzheimer’s disease, which can cause dementia, make your parent susceptible to scams, fraud, and financial abuse.
These conditions can also make it harder for your parent to manage their finances independently.
If they need help balancing their account or remembering to pay bills, it can cause them much trouble and stress.
9 Ways to Step in and Protect a Parent
If you notice any indicators that your parent is being exploited financially, it is a good idea to step in and help. You can try to stop them from giving away their money with several methods.
Depending on your and your parent’s personalities and situation, some options may work better than others.
1. Have a Conversation With Your Elderly Parent
Talking to your parent is the simplest way to protect them and find out what is going on.
First, try to listen, understand your parent’s perspective, and always be patient.
They may not even be aware they are being exploited, so remain as calm as possible.
If you find out they are being exploited, you can calmly explain it to them.
2. Start a Family Meeting
Another strategy is to discuss your elderly parent’s situation as a family.
This will allow you to root out any questions you may have and may make your parent more willing to open up.
If one of your family members has been receiving a lot of money from your parent, you can also openly explore the situation and allow them to justify it.
It may also be beneficial to have these conversations without your parent.
You can ask your family members for help figuring out how to help your elderly parent without their interference or denial.
3. Educate Your Parents on What to Look Out For
One of the most effective ways to prevent your parents from giving away their money is to educate them.
If your parents know what scams and exploits to look out for, they will be better able to defend themselves against these attacks.
You can learn about common scams on many different websites yourself, so you can better educate them.
O’Leary, the estate planning attorney, advises: “You, as the adult child, can help raise the awareness level with your parents about these red flags.”
You can also help your parents learn more about their financial situation and how to control and monitor it. You can employ online tools and apps to allow them a better grasp of their situation.
4. Read Your Parents' Mail
Reading your parents' mail is a great way to stay on top of their financial situation.
Mail often includes bills, notices of any changes with their finances, and sometimes attempted scams.
You will be the first to know about any unexplainable expenses they are paying and if they are not paying bills. Also, if you suspect any mail to be a scam, you can dispose of it before it reaches your parent.
One good way you can go about this is to use the U.S. Postal Service's Informed Delivery.
5. Meet With a Financial Advisor
Having your parents meet with a financial advisor is a great way to help them understand their situation.
Financial advisors can inform your parents how their spending habits will affect their finances in future years and advise them to make smarter choices.
Your parents might also be more likely to listen to an advisor as they are a professional third party. Sometimes, hearing advice from a family member may make it harder to accept or follow.
6. Regularly Review Their Finances
Besides just mail, staying aware of your parents' finances is another excellent prevention method—bank accounts, checkbooks, and anything they use to make purchases or send money. Stay aware of their finances with Trustworthy’s useful money tab.
You will have a good grasp of their financial situation, and if you notice any suspicious activity, you can step in before it worsens.
7. Limit Technology Usage
Technology and the internet are available for almost anybody, including your parents.
Technology is home to many scams, and your parent may be susceptible to fraud and other risks.
The convenience of online banking and shopping also makes it easier for them to give away money. Limiting their exposure and technology usage can limit some of these risks.
8. Ask for Power of Attorney
Obtaining power of attorney for your parent’s finances will legally allow you to monitor and control them.
This means you will be the first to know of any suspicious spending activity and can even cancel transactions. You will also be allowed to pay bills for your parent directly from their accounts.
In most cases, you will need your parent’s consent to be granted power of attorney. This can be tricky to obtain for some, but it will give you the necessary power to help your parents.
If you often lose things, consider keeping all your important family documents online in a secure system like Trustworthy. We simplify document storage for your whole family, so you don’t have to worry about petty things like losing a document. If you need more help, you and your parents can collaborate with a Trustworthy Certified Expert™.
9. Give Them a Monthly Budget
The final method to prevent your parents from giving away money is to assign them a monthly budget.
Some parents are unable to give themselves a budget or have never tried. They are more likely to splurge and make unnecessary purchases without regulation of how they spend their money.
With a budget, they can see exactly how much they can spend in a month, preventing them from going overboard.
Frequently Asked Questions
How do you take control of elderly parents' finances?
The best way to take control of your parent's finances is to be granted power of attorney. This will allow you to legally access and control your parents' bank accounts and other assets.
What should you do if your elderly parent is being taken advantage of?
If you suspect that your elderly parent is being exploited, it is best to talk to them directly and try to figure out more about the situation.
You can also gather information by contacting their bank or financial institution. You should also contact law enforcement to determine the next steps if you find sufficient evidence of a crime.
What is the most common form of elder financial abuse?
The most common types of elder financial abuse are scams, identity theft, and in-family abuse. Older adults are also regular targets for online, phone, and email scams.
They are major targets because they are more likely to give away their personal information and become victims of identity theft. Their family members may also try to abuse them and use their money for their benefit.
How can I protect my elderly relative's money?
A power of attorney is one of the most effective ways to protect your parent's money. A power of attorney can grant you legal control over your parents' finances so you can manage their money. You will be given access to their accounts and can even pay bills and other expenses with their money.
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