Senior finances: How families should help Nov 04, 2013, 8:45 am By Heidi Carmack Pfaffroth

Putting checks in place, not blame

Families are often together during the holidays, making it a great time to talk about how everyone can be involved in protecting senior family members from financial abuse. Some shy away from money talk, but families can take the pressure off the situation by making the conversation about putting checks in place, not about blame.

In Utah, up to $1 million a day is stolen from seniors—an average of $85,253 per victim (Source: The Utah Cost of Financial Exploitation, Jilenne Gunther, MSW, ID, Legal Services Developer, Utah Division of Aging and Adult Services). The majority of seniors are exploited when they become unable to manage their own finances and they have to ask for help. However, families and trusted friends or advisors can put systems in place so that help is available when needed, without the threat of fraud or liability of false accusations.

The top three ways seniors are exploited happen when seniors deed their homes, add others as a joint bank account holder or give to someone else a  general financial power of attorney. These are often done to make it easier to manage their finances, but there are ways to help without so much risk. Since 57 percent of the amount stolen from seniors is stolen by family members, putting precautions in place protects everyone involved.

Use third-party monitoring. Instead of giving the helper joint access to accounts to make sure the senior family member isn’t being scammed, consider asking a family member, CPA or trusted friend to monitor accounts with extra statements or online view-only access. There are several ways this acts as a precaution. In a situation where the helper has read-only access instead of joint account access, helpers can watch for scams or fraud by others, while the senior still maintains full control over their finances. On the other side, if a helper is added as a joint account owner, they are seen as an equal, regardless of who originally owned the account. One of the implications of having a helper that has joint access is that they can make payments or account changes without any approval from the senior. Another is that now that account and the senior are vulnerable to lawsuits or tax liability of the joint owner—the money, by law, is seen as theirs and can be seized.

Limit access to nest eggs.  If a senior has a nest egg, and a helper is needed to manage bills or payments, consider adding the helper to a second smaller account. At Bank of American Fork, seniors can set up automatic transfers each month so the amount that is needed to pay bills would come from the larger account that income is deposited in. Then, the helper can be given access to the smaller account for paying bills, limiting the risk of fraud to only the balance in the smaller account.

Use a limited power of attorney agreement instead of a general financial power of attorney. A general financial power of attorney agreement means that the helper has unlimited power—to sell the house or car even. This creates serious temptation, even for honest people. Using a limited power of attorney agreement to assist with smaller accounts only means that the senior can still get the help they need, but in a less risky way. This also protects the helper or family member involved from being falsely accused of mismanaging funds or other assets. Sometimes disagreements within families about how to manage the senior family member’s finances result in false blame.

Don’t deed your home. A senior who deeds their home can be kicked out—they no longer control the home. This can be the result of conscious fraud, but it can also be an accident. The home is now vulnerable to a lawsuit or liability against the helper that the home is deeded to, and can be repossessed. Most of the time, a home is the owner’s largest asset. Thus, it is recommended that they keep this financial safety net as long as possible.

Choose advisors carefully.  If you or your family member is considering hiring a new broker, attorney, accountant or other professional, be sure they’re properly registered or licensed. Don’t be afraid to ask questions or say no. After all, it’s your money!

Protect your personal financial information.  Never give out your bank account numbers, Social Security numbers, PINs, passwords or other sensitive information unless you made the contact. Even if you did make the contact, it’s okay to ask why the person asking for it needs it. Keep your checkbook, account statements and other sensitive information in a safe place and shred old documents that have this information on them. If you’re concerned about remembering these numbers and want to share them with family members in case of an emergency, consider giving access to each of these numbers to different helpers—so no one person has full access.

Closely monitor credit card and bank account activity. We mentioned that read-only access is a good alternative to adding a joint account holder. Make sure that the senior and the helper with read-only access are reviewing account activity often.

Take your time when making major financial decisions. It’s okay to ask a lot of questions and make sure you understand the decision you’re making. If you don’t, talk to your lawyer or trusted financial advisor. If you are being pressured to do something right away, or if someone tells you that you have to do something right now, walk away.

Beware of requests from strangers or solicitors selling goods, services or “need-to-know information.”

• Be suspicious of calls from any company or organization that you don’t have a prior relationship with. If you want to reduce the number of telemarketing calls you receive, you can sign up for the national Do Not Call Registry (call 1-888-382-1222 or visit

• Don’t comply with a request from a stranger to deposit a check into your account and wire some or all of it back—if the check you received was counterfeit, you could be held responsible for the losses.

• Be aware of scams involving reverse mortgages, or any other salesman using high-pressure tactics to sell you something.

• One of the ways scammers target seniors is by using information about their families to get money. A caller may contact you and pretend to be a relative in distress, asking you to wire money. Make sure you talk to another close relative of that person, and call the relative in distress with the phone number you have for them. Talk to your banker or a trusted advisor, who may be aware of similar scams in your area.

• If someone tells you that you have to have it or do it, don’t hesitate to take down their information and talk to a trusted helper before you send or buy anything.

The best way to protect yourself or your family members from fraud is by setting up these regular checks ahead of time. Just as a business owner wouldn’t give full access to make changes and decisions to the accountant without some checks and balances, families should have some checks in place to keep decisions transparent. Families who trust and care about each other can set up financial plans that will protect everyone involved from fraud or liability—these tips aren’t just for repeat offenders or seniors who don’t trust their helpers.

Bank of American Fork offers products specifically designed with this issue in mind—seniors who want or need some help, but want to be protected from fraud, and families who want to be helpers, without the liabilities of full control. Visit a branch to set up AccountSmart Tools for Seniors, or to find out more, call 800-815-BANK or visit

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