What Is Elder Financial Abuse and How Can You Avoid Becoming a Victim?
Family conflict is unwelcome, but certainly not uncommon. While most people can navigate and resolve family conflicts in a health way, this isn’t always the case. This is especially true when it comes to elder abuse.
While there are many types of elder abuse, financial exploitation is the most common. There is no strict definition of what financial elder abuse is, but what most can agree on, is that financial abuse happens when someone tries to take control of what belongs to the senior for their own benefit, and not theirs. This can include money, property, and personal information. It’s unethical and in many instances, illegal.
And with the biggest intergenerational transfer of wealth occurring right now, the risk of elder financial abuse is at record highs.
Who Is Most Likely to Commit Elder Abuse?
Between 2016 and 2026, it is estimated that roughly $1 trillion in personal wealth will be transferred from one generation to the next. Of that, 70% will be in the form of financial assets.
According to the Ontario Human Rights Commission, 62.5% of all forms of elder abuse are money related. In fact, financial abuse is the most common form of elder abuse in Canada. And it’s getting worse.
A recent report states that 41% of elderly adult Canadians have experienced some form of financial abuse, with 35% of seniors saying they didn’t report the abuse to anyone. Why? Of those seniors who didn’t report incidences of financial abuse, 15% were embarrassed by the incident and 10% feared it would make the situation worse or result in retaliation.
That number, though, is probably a lot higher, as many studies and reports do not include those Canadians in assisted living or long-term care facilities. Or those with cognitive impairment.
With the number of seniors growing in Canada over the next 20 years, the number of financial abuse incidents are expected to rise. This is notably true for Canadians aged 85 and older; an age category that is growing at nearly four times the rate of the overall Canadian population.
By 2051, when the youngest baby boomers turn 85 years old, roughly 2.7 million people, or 5.7% of the Canadian population, will be aged 85 and older.
Unfortunately, elder abuse is not always committed by people unknown to the victim. More often than not, older Canadians are taken advantage of by people they know and trust the most, such as their family, friends, and caregivers. One quarter of people that commit financial abuse live with the victim.
What Does Senior Financial Abuse Look Like?
What does family financial abuse look like? Below are 14 forms of financial abuse Canadian seniors need to be mindful of.
Exploiting seniors for shelter or money
Pressuring to lend, give gifts, or change a will
Requesting early inheritance
Creating co-dependence as a caregiver to leverage for financial gain
Misusing power of attorney
Asking to be put on title for real estate
Questionable business transactions
Abusing bank or credit cards
Misusing joint bank accounts
Secretly cashing pensions or other cheques
Forging signatures on cheques or legal documents
Refusing to return borrowed money or property
What Are Some Warning Signs of Financial Abuse?
There will be signs that a senior Canadian is experiencing financial abuse. Pay attention for these tell-tale signs:
A trusted person takes an unexpected interest or involvement in your financial matters
Your financial statements show unauthorized withdrawals or transfers
An individual asks to have bank statements sent to them or you stop receiving them
You start experiencing financial difficulties, such as unpaid bills, or even lack of food
You are asked to make changes to important documents, including will, power of attorney, trusts, property titles, deeds, or mortgages that you do not want to make and are not in your best interest
You notice suspicious signatures on cheques and other documents
You feel pressured or afraid of a trusted person
How Can You Protect Yourself From Financial Abuse?
There are a number of steps people can take to protect themselves from financial abuse.
If possible, do financial transactions on your own
Keep your personal and financial information (PIN, passwords etc.) safe
Do not share bank card, credit card, or PIN with anyone
Understand every document before you sign it
Do not sign blank documents
Lend money only if you want, and have a signed document for repayment or if it’s a gift
Set up automatic bank deposits for pension cheques or other sources of income
Have bills payments debited directly from your account or charged to a credit card
Review financial records for anything unusual
Sharp Asset Management for Your Retirement Planning
Aging is a fact of life, but getting older doesn’t mean you should be more susceptible to financial abuse or manipulation. There are ways you can protect yourself and loved ones from financial abuse by planning for the future and speaking with a certified asset management counsellor.
Sharp Asset Management Inc. is an independent Portfolio Management firm that is 100% owner operated. We are not affiliated with any financial institution, securities firm or mutual fund company. As a result, our investment decisions are unbiased and we do not earn any commissions or fees on investments we choose on behalf of our clients.
All of our investment counsellors are charter financial analysts, the highest level of achievement, and have over 10 years of experiencing managing portfolios. To learn more about investing with Sharp Asset Management, contact us today.