Seniors and their loved ones should have a plan to deal with potential financial abuse or cognitive impairments. Financial advisors are in a position to notice when a client's financial actions turn questionable. Examples of questionable behavior could be forgetfulness, irrational behavior, or odd financial transactions outside of established plans or normal budgets. Once an issue surfaces, what to do and how to do it is a sensitive situation.
If the actions point to financial abuse, the usual suspects are family members, friends, professional people involved in client-advisor roles, or “new” friends or acquaintances. Isolated seniors are very vulnerable to people of suspicious character.
In the financial profession, laws and rules are in place that allow a financial professional to place a hold on transactions to clarify a situation. The financial professional must have “reasonable belief” that something is not right. The rules are not well defined, and a professional might be reluctant to pursue action based on potential backlash.
As you can imagine, this is a tough call. Financial professionals and health professionals are not omniscient, so reasonable belief could be a hunch.
You can take action to get in front of a potential problem with these steps:
- Establish a trusted contact person. Pick someone you have complete confidence in.
- Identify this trusted agent to your financial and legal professionals.
- Involve family members so all are aware and you create a checks-and-balances situation.
- Call a meeting with your professional managers and select family and friends.
- Share your plan.
- Encourage surviving spouses of military officers in your network to join MOAA and take advantage of financial education tools available to members.
