Financial abuse of aging adults is a growing and deeply concerning problem. As people age, they often face increased isolation, health challenges, and dependence on others—all of which can create vulnerabilities. Therefore, following 5 proven steps to protect aging loved ones from financial exploitation becomes crucial. Whether it’s a stranger, caregiver, or even a family member taking advantage, the effects can be devastating. That’s why incorporating protective measures into your estate planning can make a critical difference.
The Scope of the Problem
Financial exploitation is one of the most common forms of elder abuse. The National Council on Aging estimates that older people lose nearly $3 billion each year to scams, fraud, and financial manipulation.1 Worse still, many cases go unreported, especially when the abuser is a relative. Aging adults may fall victim due to declining cognitive ability, loneliness, or misplaced trust. In some cases, they may feel ashamed or fear retaliation if they speak out. Recognizing these risks is the first step toward preventing abuse. This issue presents the need to learn 5 proven steps to protect aging loved ones from financial exploitation.
1. Start with a Strong Estate Plan
One of the best ways to protect an aging adult’s assets is through a solid estate plan. Working with an experienced estate planning attorney in Greenwood Village ensures that appropriate legal safeguards are in place. Essential documents include:
- A revocable living trust to manage assets during incapacity and reduce court involvement
- A financial power of attorney that names a trusted individual to manage finances when necessary
- A medical power of attorney and advance healthcare directive to protect health-related decisions
- Clear instructions in the estate documents to avoid confusion or manipulation later
These tools help ensure that only trusted individuals have access to sensitive financial and medical decisions.
2. Choose Fiduciaries Wisely
Naming the right person to serve as trustee or agent under a power of attorney is critical. Select individuals with integrity, financial experience, and good judgment. Avoid naming someone who is struggling financially or has a history of conflict with other family members. A wills and trusts lawyer in Colorado can help guide you through this selection process and may recommend naming a neutral third party if family dynamics are complicated.
3. Set Up Oversight and Transparency
Even well-meaning people can make poor decisions under pressure. Setting up systems for oversight can minimize opportunities for abuse. Options include:
- Requiring co-trustees or co-agents
- Adding regular reporting requirements to other family members or professionals
- Naming a trust protector or professional trustee for added accountability
Following these proven steps to protect aging loved ones from financial exploitation is a step in the right direction. These measures can be integrated into your plan during the drafting phase and help ensure transparency in financial decision-making.
4. Educate Older People and Their Support System
Education is a powerful tool in preventing abuse. Talk openly with your aging loved ones about common scams, warning signs, and how to ask for help. Encourage them to:
- Never give out personal information over the phone or email
- Check financial statements regularly
- Let a trusted person review major financial decisions
Empowering aging adults with knowledge can help them protect themselves, even when they don’t feel comfortable asking for help.
What Can You Do if Financial Abuse Has Occurred?
Contact your local Adult Protective Services (APS) agency2 or law enforcement to file a report. The sooner you report suspected financial abuse, the sooner an investigation can occur, followed by actions to protect the victim and prevent further abuse. Working with APS, law enforcement, and an elder law attorney, you can assess the scope of the financial abuse and identify the affected assets and the extent of economic losses.
Next, if the victim is a loved one, establish a support network for them. Surround the aging individual with supportive family members, friends, and professionals who can provide the emotional support and guidance they need throughout recovery. This network of professionals may include attorneys, financial advisors, therapists, and social workers.
5. Encourage Early and Ongoing Planning
It’s far easier to protect a person’s wishes and assets when planning begins early—before signs of cognitive decline. Encourage your loved ones to meet with a comprehensive estate planning attorney in Colorado to discuss their goals, concerns, and values. Planning ahead helps preserve autonomy and ensures that future decisions reflect their intentions.
Final Thoughts
Financial abuse of older people is an emotional and financial threat that families must take seriously. By establishing legal protections, selecting fiduciaries carefully, and maintaining transparency, you can safeguard your loved one’s wellbeing.
If you need guidance creating an estate plan that prioritizes protection and peace of mind, reach out to our trusted Colorado estate planning law firm. We’re here to help you protect the people and legacy that matter most.
- Jilenne Gunther, The Scope of Elder Financial Exploitation: What It Costs Victims, AARP Pub. Pol’y Inst. (June 15, 2023), https://doi.org/10.26419/ppi.00194.001. ↩︎
- Find a local Adult Protective Services agency at Administration for Community Living, Eldercare Locator, https://eldercare.acl.gov/Public/Index.aspx, or by calling 1-800-677-1116. ↩︎
