Anyone can be the victim of financial abuse. However, older adults are particularly vulnerable to acts of financial exploitation. In some cases, this may be due to the cognitive decline that comes along with older age. However, other factors may also play a significant role.
A concentration of wealth
Baby boomers benefited from a stronger economy during their formative years than any other generation before or since. This is reflected in the estimate that a baby boomer’s average net worth is $1.2 million. This is a significant amount of money that can prove to be an irresistible temptation to unscrupulous individuals.
A willingness to trust others
In a study conducted by UCLA, participants were shown pictures of different faces and asked whether they considered the face to be trustworthy. Seniors were more likely to consider a face trustworthy. This trend held even for faces that most younger people considered untrustworthy.
The study also found less activity in the area of the brain known as the anterior insula among older people when looking at untrustworthy faces. This part of the brain is responsible for our “gut feelings.” Declining activity in this part of the brain suggests that older people may not be as quick to identify a potential threat.
Declining ability to make sound financial decisions
A Boston College study found that people’s capacity to make sound financial decisions declines with age. However, a person’s confidence in their financial decision making remains the same. This means many seniors may be unaware of their financial vulnerability and may not recognize when they’re being taking advantage of.
What can seniors and their family members do?
There are several steps seniors and their family members can take to protect themselves from financial abuse. A financial power of attorney can enable a trusted individual to make financial decisions on behalf of a senior. Establishing a trust can help protect a senior’s assets from outsiders.
A skilled legal professional can help determine whether any additional steps are needed to protect a financially vulnerable loved one. You should also discuss your options if you suspect a loved one is the victim of financial abuse.