The article below was originally published on the Insights & Research site, RBC Wealth Management. Click here.
A good financial advisor is usually expected to make sound investment decisions, but sometimes they are called upon to perform other functions outside their area of expertise in order to help a client. Leanne Kaufman, head of RBC Estates and Trusts, finds that more and more often, employees in her department find themselves in situations where clients or their loved ones have concerns about potential financial exploitation elders.
In one such situation that recently occurred, an elderly client had concerns about her ability to fend off demands from an adult child to invest in a questionable business.
“She’s able to maintain her position on what she considers to be appropriate support or not,” says Kaufman. However, she fears being more vulnerable in getting older. This is why he likes the idea of relying on a neutral and independent person. »
L’financial abuse of seniors is one of the darkest realities of aging. What’s more, it generally goes unnoticed by those who are not directly victims of it. It is a crime that the victim is often unaware of and which is often, unfortunately, committed by family members or close friends.
“The fraudster is in a position of trust,” explains Ms. Kaufman. This could be the children or a caregiver in a facility. It could also be a neighbor. »
For seniors who have, little by little, built up assets in anticipation of their retirement, learning that one of their loved ones is trying to take advantage of them can be a shock. Furthermore, this crime is increasingly common in our era, where seniors form a rapidly growing proportion of the population.
According to census data released in May, the number of seniors increased by 20% in Canada from 2011 to 2016, and the proportion of seniors in the Canadian population is now 16.9%.
With nearly half of all seniors having experienced some form of exploitation, it is important for seniors, as well as their close friends and family members, to know the warning signs of exploitation and know what they can do to avoid it.
Disappearance of valuable objects
You might think that the only cause of losing jewelry or money is brain aging, but experts say this is one of the most common signs of possible exploitation. . Elderly people are often the ones to notice when items are missing, and they can report it to a counselor or family member.
Abnormal banking activity
Since banking activities are generally routine, a sudden change in this area can be a red flag. So, bill payments charged to an account for the benefit of an unknown person or requests for payments to someone else’s credit card account may be signs of exploitation. Even a sudden increase in withdrawals could be a clue.
The activity could be justified, but it could also be a sign that someone is pressuring the senior to increase their withdrawals.
Sudden appearance of a new companion
One of the difficulties in detecting cases of exploitation lies in the vagueness that often surrounds these situations. For example, when a new friend or lover suddenly appears, it can be difficult to determine whether it is an exploitative situation or a legitimate relationship. If the senior is at the bank or with a legal advisor with this new person and does not seem comfortable in their presence, this could indicate that something is wrong.
Unexplained transfers of property
The transfer of ownership of a property or a bank account must be subject to rigorous evaluation. There have been cases where fraudsters have convinced seniors to transfer full ownership of their home to them or give them half of it so that it would revert to them when the senior dies.
Unexplained changes to the will or power of attorney
A financial power of attorney allows a designated person to act on behalf of the client with respect to the client’s legal and financial affairs. This is a very important designation and any change to it, especially if the new power of attorney is not a family member or long-time friend, could be a sign that someone is trying to take advantage of wool.
What to do to avoid exploitation
It is important to keep in mind that financial abuse of seniors is a crime and that many police services have vulnerable persons units whose employees investigate and encourage abuse of seniors. reporting.
To put an end to the financial exploitation of a senior, however, you must be able to detect it when it occurs. It is therefore essential to ensure that protections are in place before an exploitative situation needs to be avoided or terminated.
Having a wealth transfer plan and sharing its contents with the next generation or other beneficiaries is a good starting point. It is also important to ensure that you choose the agent for a power of attorney wisely, whether a family member, friend or legal advisor. The agent should live close to the elder, be reliable and have a stable financial situation.
” Often, [les clients] do not take the time to think carefully about the choice of their proxy, they simply appoint a child, observes Ms. Kaufman. “If the child is also the one from whom the parent could hardly resist if he asked for money, is the parent making the right choice by appointing him as his agent? »
As in the previous example, relying on a network of professionals (financial advisor, accountant, legal advisor, etc.) can provide a certain degree of protection to seniors. These professionals can be the first people consulted by seniors or their family members who fear being in the presence of an exploitative situation. They are also well placed to detect abnormal operations.
A friend or family member who suspects financial abuse may be occurring would naturally speak to the older child first.
Since fraudsters prey on the truly vulnerable, we must remember that the more isolated a person is, the more likely they are to be a victim. Relying on someone close to you, whether a family member, close friend, or trusted financial professional, to write checks can itself have a deterrent effect on possible fraudsters.
A word from our lawyersA word from our lawyers
This article is intended to provide general information only and is not intended to provide legal, financial or other professional advice. Please consult a professional advisor regarding your particular situation. The information presented is believed to be factual and up to date, but we do not guarantee its accuracy and it should not be considered an exhaustive analysis of the subjects discussed. The opinions expressed reflect the judgment of the authors as of the date of publication and are subject to change. Royal Bank of Canada and its entities do not promote, either explicitly or implicitly, the advice, opinions, information, products or services of third parties.
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2023-12-29 20:49:55
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