Barbara Corcoran, a host of the popular reality show TV Shark Tank, recently disclosed that she lost $380,000 to a phishing fraud. Corcoran received an email, believed to be from an assistant, with a fraudulent invoice requesting money owed for real estate renovations. The email address was one letter off from the actual address used by Corcoran’s assistant.
This illustrates how easy it is for anyone, but especially the elderly, to fall prey to financial scammers. Corcoran is a massively successful real estate investor with extensive knowledge of financial systems. And yet she still succumbed to the scam, which can happen to virtually anyone with an internet connection. Consumer Reports explains how you can protect your elderly loved ones from financial fraud and scams like these.
Help elderly parents set up legal documents now
A durable power of attorney allows a person to make financial decisions on behalf of another. Powers of attorney are useful for people experiencing cognitive decline, due to either dementia or Alzheimer’s. They are also integral in helping you protect your loved one from scammers, who can easily influence such a person into providing funds using fraudulent information. If your loved ones are concerned about imbuing too much power to one person with a power of attorney, suggest choosing two individuals, who will ensure financial decisions are made in the person’s best interest.
Take steps to simplify finances
If your loved one is capable of handling his or her own finances but is overwhelmed by the process, take steps to simplify their financial outlook. If there are multiple retirement accounts, such as 401(k)s and IRAs, have your loved one talk to an estate planning attorney about putting funds into a rollover account. You want to take the right steps when doing so, which will prevent penalties for early withdrawal or tax ramifications.
Be transparent about finances
Make yourself available to your loved ones when they need more general advice about finances. You can also offer your assistance when it comes to things like bill pay or checkbook balancing. When helping with these procedures, identify any suspicious activities and bring them to your relative’s attention.