Elders are at high risk of being financially exploited by criminals. Conditions that are common among the elderly, including cognitive impairment, make them less able than others to identify when others don’t have their best interests in mind. Fortunately, it is possible to lower the risk of elder exploitation through the estate planning process. In this article, we examine how to prevent elder exploitation with an estate plan.
What is Elder Exploitation?
Elder financial exploitation occurs when a fiduciary, caregiver, or other individual illegally or fraudulently uses the resources of an older person for personal gain or profit. Seniors who suffer from cognitive impairment are particularly vulnerable to elder exploitation.
Using an Estate Plan to Protect Against Elder Exploitation
One of the best things to do to protect against elder exploitation is create an estate plan. Below are key steps in the estate planning process that can help prevent elder exploitation:
Create a revocable living trust: Creating a revocable living trust is an effective way to protect against elder exploitation. When a party places assets in a revocable living trust, these assets are owned by the trust—not the person who placed them in the trust. Therefore, it is very difficult for would-be exploiters to access assets in a trust.
Designate a pre-need guardian: Elder exploitation often occurs when a senior lacks the capacity to make sound decisions. By designating a pre-need guardian as part of a durable power of attorney, a person can ensure that a trusted individual will make certain decisions on his or her behalf in case of incapacity.
Create a durable power of attorney: As noted above, a durable power of attorney is another key estate planning document for preventing elder exploitation. This document gives a person the ability to make legal and financial decisions on a senior’s behalf—even before that individual loses capacity.
Minimizing the Risk of Elder Exploitation
When creating the estate planning documents discussed above, it is important to appoint the right fiduciaries. Below are some tips on choosing the right fiduciaries to minimize the risk of elder exploitation:
Check the fiduciary’s work: You should only appoint a person you trust to serve as a fiduciary. However, trust is not enough. To ensure that this person performs his or her duties faithfully, you should require the fiduciary to regularly report to another person on the financial transactions that he or she performs.
Don’t choose someone with issues: Even if it’s someone you trust, you should avoid appointing a person who is bad with money, has substance abuse issues, or has a gambling problem.
Don’t choose a hired caregiver or paid helper: Unfortunately, hired caregivers and paid helpers are some of the top perpetrators of elder exploitation. Therefore, it is advisable to avoid appointing people in these types of roles as fiduciaries.
Contact a Florida Estate Planning Lawyer
If you are ready to begin the estate planning process, the Law Office of Angela Siegel is here to help. At our law firm, founding attorney Angela Siegel will work with you to create an estate plan that meets your unique needs and ensures you and your family remain protected. Please contact us as soon as possible to arrange a free consultation with our talented estate planning lawyer.