How To Protect the Elderly, and Other Vulnerable Adults, From Financial Abuse

Learn how to protect against financial forms of abuse for the elderly.

As we age it is foreseeable that our abilities and mental functioning will degrade. Many of us will need some type of assistance later in life. Often, the assistance needed is with finances and payment of bills.

Since we know that this need is likely to arise, it makes sense to plan for it in advance instead of simply hoping for the best.

Having a plan in place to deal with future incapacity is the best way to protect against the loss or misuse of your funds. In most cases, the financial abuser/exploiter is a family member or other person known to you. By the time help is needed, you are no longer able to protect yourself.

A plan does not need to be expensive or complex. Execution of a General Durable Power of Attorney can help and is a good first step. In this way you can choose in advance a person who will help you if you become disabled, mentally incapacitated or ill. The attorney in fact appointed by you in your general durable power of attorney has the power to handle your financial affairs and assist you with personal business matters.   However, the person you appoint also has the power to steal from you. So great care must be taken in choosing an attorney in fact. This is not an honorary position to be given to the eldest child. It is a legal position that must be given only to a most trustworthy, capable and responsible person.

Perhaps the best way to plan for future illness or mental decline is to build such a plan into your estate planning documents.   A Revocable Living Trust is a flexible estate planning tool that also lends itself to planning for disability during your lifetime.   Normally, the creator of a revocable living trust (the Settlor or Trustor) is also the trustee and manager of the trust assets. A successor trustee is appointed to take over the job of trust management when the original trustee dies, can no longer do the job or no longer wants to be responsible for trust asset management. A legal guardian can also be nominated in your estate planning documents. Again, you have the right to choose, in advance, persons you trust to assist you should help be needed. You also have the right to control the actions of your successor trustee by giving specific instructions to your trustee, including instructions as to how the trust assets will be invested, what type of care you wish to have and what expenses you want your trustee to pay. These instructions can be changed by you as your circumstances change.

As with a power of attorney, the selection of honest and trustworthy fiduciaries is critical. Since your successor trustee will be managing your funds, good financial management and investing skills are desirable in the person you select.   If no family member or friend exists who has the skills or character to serve as your successor trustee, the nomination of a professional fiduciary can be a good option.

Discussing these issues in advance with your estate planning attorney is recommended. Your Phoenix estate planning attorney will assist you in preparing a plan that will protect your assets from financial abuse and exploitation during your life time and provide for their management and distribution to your beneficiaries upon your death.

The lawyers at Platt and Westby, P.C. have been practicing in the area of Probate and Estate Planning and Administration for over 40 years. Contact any of our Probate lawyers at 602-277-4441 or use the e-mail contact utility on our website at www.plattwestby.com to schedule a no-fee initial conference concerning any Probate or Estate Planning matter. We will answer your questions and, where appropriate, suggest potential solutions.

Platt and Westby, P.C. has offices in Phoenix, Arrowhead, Avondale, Scottsdale and Gilbert, Arizona.