Seniors are a popular target for scams. While there are steps that can be taken to avoid scams, it is oftentimes difficult for adult children to step in and prevent fraud when a parent wants to maintain financial independence. As discussed in a Wall Street Journal article titled, “When an Elderly Parent Has Been Scammed”, it can difficult for children to even know when a scam has taken place.
When adult children discover that a parent has been scammed, it is important to express empathy and understanding so the parent will be more likely to cooperate and allow children access to financial documents. Also, it is important to report fraud to local law enforcement. Even if this doesn’t result in prosecution, it can be helpful for disputing debit or credit card charges. Next, be sure to alert credit-card companies and banks of the fraud and review credit reports and account statements for suspicious activity. Finally, consider changing phone numbers to help prevent scammers from calling.
All of these above steps require cooperation with parents. Asking a parent for power of attorney is one way for children to gain more control over financial information. However, parents are oftentimes apprehensive to giving up control over their finances. An alternative is to draft a springing power of attorney which takes effect after a parent is declared incapacitated. While there can be issues with having a physician declare a parent incapacitated, it allows children some control in case a parent’s mental health deteriorates to the point that they can no longer make financial decisions. As a last resort, adult children can apply for conservatorship. However, applying for conservatorship can be time consuming and costly. It is best to have proper estate planning documents in place well before a crisis occurs.