Financial Exploitation by a Fiduciary
WHAT IS A FIDUCIARY?
A person that manages your money or property is a fiduciary. Overall, they must manage your money and property for your benefit. Financial exploitation can occur when a fiduciary abuses that power. Most importantly, the person you appoint as your fiduciary should be trustworthy, honest, and have integrity. Your fiduciary has four basic duties:
- Act only in your interest
- Manage your money and property carefully
- Keep your money and property separate from his/hers
- Keep good records
Your fiduciary can be removed when he or she does not fulfill his/her obligations or duties. If elder financial exploitation is reported to the police or Adult Protective Services, the fiduciary will be investigated.
What is a Power of Attorney?
Accordingly, one way some individuals prepare is by making a power of attorney (POA) for their finances. A power of attorney gives someone legal authority to make decisions about money or property. That person—called the agent—can make decisions if the individual is sick or injured. Creating a POA is a private way to appoint a substitute decision-maker and is relatively inexpensive. If you don’t appoint an agent under a POA before your decision-making ability declines, a family member or friend might have to go to court to have a guardian appointed. Consequently, this process can be lengthy, expensive, and public.
A POA does involve some risk. It gives someone else a great deal of authority over your finances without regular oversight. Power of Attorney abuse can take many forms. They may…
- pressure you for authority that you do not want to grant.
- spend your money on him or herself rather than for your benefit.
- do things you didn’t authorize him or her to do – for example, make gifts or change beneficiaries on insurance policies or retirement plans.
Once the power of attorney is signed, your agent can immediately act on your behalf even if you are capable of making decisions.
A durable power of attorney remains effective even if the grantor loses the capacity to make financial decisions. If you want your POA to remain effective if you become unable to manage your money or property, make sure it is durable.
There are ways to customize a power of attorney to fit your needs and preferences. An attorney can help you make an appropriate POA for your circumstances.
What is Fiduciary Abuse?
Essentially, fiduciary abuse is when an individual is legally responsible for managing another person’s assets and uses his or her power to benefit financially in an unethical or illegal manner. Sadly, our older adults sometimes have difficulty managing their money and they are dependent on others for help. This is when someone steps in and attempts to obtain monies from property, land, goods, and bank accounts.
Who are the Usual Abusers?
Surprisingly, many cases of financial abuse occur between an older person and their caretaker. Caretakers include guardians, friends, and family members who start out doing the right thing. Unfortunately, they commit financial abuse due to temptation, because of an addiction, desperation, greed, or personal debt. Slowly and over time, the caretaker begins to take control of the victim’s possessions, assets, and home. Unfortunately, sometimes the caretaker uses coercion or threats. Caretakers can also manipulate the older person’s estate plan, will, take over the victim’s home, or spend all of their assets.
Unfortunately, sometimes the older person becomes a victim to a family member who takes advantage of the situation. This can happen in several ways. For example, the elderly person is placed in a care facility and the family member takes the victim’s benefits income (SSI, SSDI, VA, Retirement, Pension) and spends it on their own bills or for their own gain. The benefit money is meant to be spent on medical costs, housing, and expenses of the elderly person. Another situation includes the family member who “cares” for the older person and is also being paid by in-home support services. Sadly, in this situation, not only is the elderly person a victim of financial fraud, but they may also be receiving inadequate care and may be abused.
Long-Term Care Facilities
Several people are concerned about the quality of care for their loved ones in nursing homes. Unfortunately, family members often forget to watch the monetary portion of their family member’s care. For good measure, family members must track and account for the charges equal to the level of care that your loved one is receiving. If something does not seem correct, please contact the facility and contest the charges immediately.
Individuals who deceive older individuals are of all ages, genders, and ethnic backgrounds. Additionally, victims tend to also have a diminished mental capacity, depression, or likes the added attention. Email, text, phone, and letter scams often target older people. Unfortunately, because the elderly person is trusting, manipulated, gullible, or scared, they fall into a system of giving the deceiver money. For example, checks, wires, credit card transactions, gift cards, gifts, or other financial means. One indicator may be an increased number of checks being used or excessive amounts of money being sent to an unknown person or entity. Always follow up with your loved ones in these financial decisions and keep a watchful eye on their finances when possible.
WHEN YOU NOTICE FRAUD
- In most instances of suspected elder abuse, including financial exploitation, you should contact Adult Protective Services. You can find information about reaching your local Adult Protective Services office at the Eldercare Locator or by calling 1-800-677-1116.
- If the older person is in danger or you believe a crime has been committed, call 911 for an immediate response from the police.
- For cases of identity theft, contact the Federal Trade Commission and identitytheft.gov.
Overall, if you notice suspicious account activity or experience security-related events, contact Pearl Hawaii Federal Credit Union immediately.
Pearl Hawaii Federal Credit Union
94-449 Ukee Street
Waipahu, Hawaii 96797
Additionally, you can visit any location to report suspicious account activity. For our branches and hours, visit our ATMs & Branches page.
MORE AT PEARL HAWAII
- What Is Identity Theft?
- Guard Against Multi-Factor Authentication Scams
- Beware of Romance Scams
- What is Financial Elder Abuse? Understanding Finacial Exploitation
- Improve Account Security With Transaction Alerts
- Your Account Security & Regulation E
- Protecting Yourself From Social Media Scams
- The Art of Social Engineering
- Protecting Yourself From Online Crime | Phishing, Smishing, and Vishing
- Online Security For Your Accounts
- Pearl Wallet | Protect You And Your Cards
- Internet Crime Complaint Center
- Federal Trade Commission
- 10 Things You Can Do to Avoid Fraud
- FTC: Privacy, Identity & Online Security
- Internal Revenue Service (IRS): Scams Targeting Taxpayers
- Tips for Safe Gift Card Use: Retail Gift Card Association
- Consumer Financial Protection Bureau
- The Department of Justice
Building trust, nurturing dreams, inspiring hope. From home or car loans to Hawaii’s most innovative banking services, Pearl Hawaii is committed to you. Bank at any of our Oahu locations in Waipahu, Ewa Beach, Waianae, Honolulu, Pearl Harbor, or near the Airport. Additionally, you can bank using PHFCUOnline just like one of our branches. To contact us, call us at 808.737.4328, toll-free at 800.987.5583, or email us at MyFamily@phfcu.com.