Transparency and protecting seniors from fraud

Based on a question in July from a reader about how to keep her elderly mother from getting scammed, I started a series on elder finances. In that July column, I emphasized the importance of transparency within “Mom’s team,” a group of family/friends and professionals selected by mom, ideally.

Transparency is the state in which team members can see what is going on with mom’s money in an appropriate manner. Duplicate statements can be sent on mom’s accounts to team members, for instance. These days secure, online access can be granted on a view-only basis. This is a handy way to allow team members to see what is going on but not exercise transactions.

View-only is a good step when mom wants someone to help her out by keeping tabs on things but wants to maintain decision making independently. When it is time for someone else to make decisions on mom’s behalf, transactional permissions can be granted.

Online access in general has a lot of appeal because geographically separated team members can get the information they need in a more timely and efficient manner than waiting for statements in the mail. If mom starts to engage in odd transactions like hitting the ATM more often or for more cash than normal, questions can be raised.

Everyone on the team doesn’t need to see everything and the attorney/client privilege is an important safeguard that must be respected but everyone’s activities should be subject to some level of review. Sadly, family members are actually the most common perpetrators of financial exploitation of the elderly.

Bernie Madoff was able to pull off his massive fraud largely because he controlled the supply of information. Had his clients’ assets been held by a third party that reported to clients independently, the odds he would have been much lower. He may not even have tried it.

It has been said that reputation comes from what people see you do but character reflects what you do when no one is watching. One sign mom has a good team is if its members welcome transparency or better yet, insist on it.

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Transparency and protecting seniors from fraud