Someday, you or your parents could be at risk.

You may know victims of financial elder abuse. According to a new Wells Fargo Elder Needs Survey, almost half of Americans do.1

As you read or hear stories about seniors being financially exploited, you may think: not me, I would never fall prey to that in my old age. Your parents? Same thing. They are too smart and too vigilant to be taken for a ride by a con artist or an unprincipled relative or caretaker.

This perception is only natural. When we are young, we never picture ourselves, or our parents, in decline. We are told 60 is the new 40, and 80 is the new 50. Perhaps so, but as some of the Wells Fargo survey data bears out, we may be overconfident in our ability to evade financial scams as we age.

Nearly 800 Americans aged 60 and older were asked if they believed senior citizens were vulnerable to financial abuse. Ninety-eight percent of the respondents said yes, but 81% were confident that it would never happen to them. Just 10% thought they were susceptible to such exploitation, and only 24% even worried about the possibility.1

The surveyors also contacted nearly 800 Americans aged 45-59 with elderly parents, and 75% of these Gen Xers and baby boomers felt their moms and dads would never succumb to such fraud.1

In short: financial elder abuse might happen to other people someday, but not to us.

This assumption may be flawed – after all, half the people Wells Fargo contacted said that they knew elders who had been financially exploited. Any perception that strangers are committing most of these crimes may be equally unfounded. The Jewish Council for the Aging states that 66% of financial elder abuse is carried out by family members, friends, or trusted third parties.1

What actions can be taken to try and shield your parents from such abuse? As a first step, you and your parents can meet with an estate planning attorney to put a signed financial power of attorney in place (if one is absent). Should your mom or dad lose the capacity to make financial decisions on their own, this document can authorize you (or another family member) to make worthy decisions on their behalf.1

There are also software programs, such as EverSafe, that are designed to pinpoint odd financial transactions for a household or business. Such activity is flagged, and a financial advocate for the person or business is then signaled.1

What should you know? What should your executor know?

When people think about estate planning, they may think in terms of personal property, real estate, and investments. Digital assets might seem like a lesser concern, perhaps no concern at all. But it is something that many are now considering.1

Your digital assets should not disappear into a void when you die. You can direct that they be transferred, preserved, or destroyed per your instructions. Your digital assets may include information on your phone and computer, content that you uploaded to Facebook, Instagram, or other websites, your intellectual/creative stake in certain digital property, and records stemming from online communications. (That last category includes your emails and text messages.)1

You can control what happens to these things after you are gone. Your executor – the person you appoint to legally distribute or manage the assets of your estate – will be assigned to carry out your wishes in this matter, provided you articulate them.1

In most states, you can legally give your executor the right to access your email and social media accounts. That reflects the widespread adoption by many states of the Uniform Fiduciary Access to Digital Assets Act, which the Uniform Law Commission (ULC) created as a guideline for states to adopt or use as a model for their own legislation. UFADAA was later modified into the Revised Uniform Fiduciary Access to Digital Assets Act (RUFADAA).1

Your executor must contact the custodians of your digital assets. In other words, the websites hosting your accounts. In states without the above laws in place, your executor or other loved ones may have a tough time because, in theory (despite recent legal challenges), the custodians still have outright power to bar access to accounts of deceased users. Yahoo! takes this a step further by abruptly terminating email accounts when a user dies.2,3

The uniform law (UFADAA) established a hierarchy governing digital account access. The instructions you have left online with the account custodian come first. Instructions left in your will rank second. Absent any of that, the custodian’s terms-of-service agreement applies.4

So, in states that have adopted the uniform law, the fate of your digital assets at a website will be governed by that website’s TOS agreement if you die without a will or fail to leave any instructions with the website. If you state your preferences in a will, but also leave instructions with the website, the instructions you leave the website overrule the will.4

Facebook, Snapchat, and Instagram have famously declared in their TOS agreements that all content uploaded by the user becomes their property. While claims like these have been scoffed at, the websites are not hesitant to stand by such assertions and may cite user account preferences to back them up – which, in some states, could mean a legal struggle for heirs.2

What steps can a family take?

Besides impacting lives and relationships, dementia can also impact family finances. It may call for another family member to assume money management responsibilities for a parent, grandparent, or sibling. It may increase the risk of financial exploitation, even as we do our best to guard against it.

Just how many older adults have memory disorders? Well, here are two recent estimates. The Chicago Health and Aging Project figures that nearly a third of Americans 85 and older have Alzheimer’s disease. The National Institute on Aging sponsored a study, which concluded that 14% of Americans age 71 and older have dementia to some degree.1

Older women may be the most vulnerable to all this. A new Merrill Lynch and Age Wave study notes that after age 65, women have twice the projected risk of Alzheimer’s that men do.2

In the best-case scenario, parents or grandparents acknowledge the risk. They lay out financial maps and instructions, telling adult children or grandchildren who love them dearly about the details of their finances. They involve the financial professional they have long known and trusted and introduce them to the next generation. All this communication occurs while the elder still has a sound mind.

Absent that kind of communication and foresight, some catching up will be in order. The kids will have two learning curves in front of them: one to understand the finances of their elders and another one in which they discover the degree of care they can capably provide. The stress of these two learning curves can be overwhelming. Asking professionals for help is only reasonable.

The earlier the basic estate planning elements are in place, the better. This means a will, a durable power of attorney, a health care proxy, and possibly a revocable living trust. In cases of significant wealth or a complex personal history, more sophisticated estate planning vehicles may be needed. If a durable power of attorney is in place, another person has the ability to act financially in the best interest of the person with dementia.1

Children and grandchildren must also confer about major decisions. What kind of assisted living facility would be best for dad? How much of mom’s retirement savings should be used for her eldercare? How do we convince dad that he should not manage his investments day-to-day anymore? What do we do now that mom seems totally unaware she has to make an IRA withdrawal? These will be hard conversations, trying decisions. If they never occur, however, the household financial damage may grow worse.1,3

Financial inattention or incompetence may be one of the first signals of Alzheimer’s disease or another form of dementia. The National Institute on Aging explains that difficulty paying for an item in a store or figuring out a tip at a restaurant could amount to early warning signs; trouble counting change or reading a bank or investment statement may also reflect cognitive impairment. These instances may be harbingers of problems to come – unpaid bills, impulsive and questionable investment decisions, and unwise credit card purchases.4