Overall, the population of individuals age 65 and older saw the largest and fastest growth between 2010 and 2020. According to the FBI, this population is most vulnerable to fraud and financial exploitation.

The FBI reports, “Criminal actors frequently target older adults, who they perceive to be more vulnerable and trusting. Criminal actors may also assume older adults have considerable financial savings, own real estate, have good credit, and are less likely to report fraud, especially if they feel ashamed following the fraud victimization or are unfamiliar with reporting channels.” Even William Webster, former director of the FBI and CIA as well as a former federal judge, admitted in a 2022 YouTube video that he had been the target of a lottery scam.

Earlier this year, the FBI reported a notable increase in reports of fraud perpetrated against older Americans. Common fraudulent scams reported include tech support scams, confidence and romance scams, investment scams, and government impersonation scams.

Elder Orphans Are Particularly Vulnerable

“Elder orphans” are persons of advanced age who are single with no adult children or other family member to care for them. In my own elder law practice, several of our guardianship cases have involved single adults with diminished capacity who were financially exploited. Although a couple of these cases involved internet and telephone scams, most had been exploited in a confidence scam.

In a confidence scam, the scammer builds a relationship with the older individual over time, slowly gaining their trust. Once trust is established, the scammer exploits the relationship in a financial manner. More common in our elder law practice are confidence scams where the scammer was self-dealing on the person’s assets, especially after convincing them to sign an unrestricted durable power of attorney in their favor. And in several insidious cases, the scammers had even taken over the older person’s medical care and signed do-not-resuscitate orders!

In all of these cases, the older individual was single and either had no children or had become estranged from their families. Many of these scammers even played critical roles in the cause of the family estrangement.

Protect Against Scams With Advance Planning

Advance planning for diminished financial capacity could avoid many of these scams. Estate planners and elder law attorneys can implement or advise the following tools, which could avoid or even minimize the impact of a potential scammer’s abuses:

• Designating a “trusted contact” with brokerage or other financial accounts managed by a professional or other financial fiduciary.
• Creating a medical and durable power of attorney, prior to advanced age or diminished capacity, designating a trusted contact or professional fiduciary as agent.
• Transferring assets to a living trust that names a trusted person or professional fiduciary as successor trustee or co-trustee, and appointing a trust protector or trust committee who can immediately remove or replace a trustee without requiring court intervention, or amend the trust where necessary to qualify for public benefits or tax incentives.
• Using the Social Security Advanced Designation to appoint a trusted person as representative payee of Social Security benefits, before the need arises.
• Placing a “freeze” on Social Security numbers with every credit bureau (Equifax, TransUnion, Experian).
  A pin will be required to unfreeze the Social Security number for credit applications.
• Moving residence to a gated 55+ community with onsite supports and services where access by outsiders is controlled and limited.
• Drafting a letter of intent as it concerns future medical care and financial management and providing a copy to agents, trusted contacts, and other appointed fiduciaries (trustees).
• Organizing financial records and providing a list of financial institutions where funds are held or contracted for (e.g., annuity contracts and life insurance policies).
• Inventorying all personal property and obtaining appraisals where necessary for particularly rare and valuable collections, and providing a copy of the inventory to trusted contacts, agents, and other designated fiduciaries (successor trustees and executors).
• Designating trusted contacts, or agents under a medical power of attorney, on HIPPA releases with each one of the older person’s normal treating medical providers, to specify who can obtain medical records and discuss treatment with the provider.
• Maintaining an active social life! Scammers are particularly successful with individuals who have become isolated and have few social contacts with whom they feel they could disclose a suspicious relationship or transaction.

A Final Note

Estate planners also should take special care to avoid participating in a potentially fraudulent scam.

Proper intake ensures that the estate plan is not the product of undue influence by a scammer involved in a confidence scam. Correctly identifying who is the estate planning client and holding private meetings with the client are two simple ways a planner can avoid being an inadvertent participant in a confidence scam. n