Protecting Seniors

Designate Trusted Contacts to Prevent Financial Abuse

April 12, 2022

Setting Up Trusted Contacts

As technology has become more prevalent in our daily lives, financial abuse against seniors has been become even easier.

One way to enable your financial advisors and banks to protect you against cybercrime and financial scams is to identify the people in your life whom you trust most regarding your personal or financial matters. While the thought of someday becoming vulnerable may seem discomforting, there are important reasons why designating trusted contacts today is a wise idea.

Why worry about financial exploitation?

Financial exploitation, as defined by the National Adult Protective Services Association, occurs when a person misuses or takes the assets of a vulnerable person for their own personal benefit. Assets may be taken by deception, false pretenses, coercion, harassment, duress or threats. This frequently occurs without the explicit knowledge or consent of a victim, depriving that person of vital financial resources for personal needs.

Common forms of financial fraud or abuse include:

  • Forgeries and falsified records
  • Unauthorized property transactions and mortgages
  • Payment for work not completed
  • Lottery scams
  • Cybercrime
  • Unauthorized investments
  • Inappropriate insurance purchases or life settlements

Who are the perpetrators? They may be people you know. Shockingly, the majority of scams are by family members. Those who need help with daily living activities are more vulnerable to being exploited by those who serve them. The perpetrators may also be people you don’t know, such as identity thieves and fraudsters posing as representatives of the Social Security Administration or IRS.

How a trusted contact can help

When it comes to your finances, being prepared may reduce your risk of fraud or financial exploitation. Designating trusted contacts provides your wealth manager or your financial institution with the resources they need to timely and effectively address a situation of suspected financial exploitation or increased vulnerability. Even if you already have a power of attorney or joint account holder named on your accounts, designating trusted contacts is an extra layer of protection, especially when you’re experiencing diminishing capacity.

A trusted contact would be called upon to assist with taking proactive measures to prevent fraud or further exploitation or abuse. The role of your trusted contacts is to share with your wealth manager or financial institution, if asked, specific details regarding your well-being, including your mental or physical health status or whereabouts, and who your executor, trustee, power of attorney or legal guardian are. They may also identify activities or warning signs that indicate potential financial exploitation, such as:

  • Uncharacteristic or repeated cash withdrawals or transfers
  • Large transactions without regard to taxes or penalties
  • Association with new, unknown friends or relatives
  • Uncharacteristic nervousness or anxiety during phone calls or visits
  • Lacking knowledge about their financial status
  • Unusual excitement about a windfall
  • Difficulty speaking to them without interference from others
  • Sudden changes to financial documents

When selecting your trusted contacts, consider choosing people who do not have the ability to transact business or receive information about your financial accounts or your medical status. A long-time attorney, tax preparer or physician might be a good choice if you have a good history with that professional. You may also carefully select close friends or family members, particularly when they are not named as beneficiaries of your estate.

The role of your trusted contacts is limited, yet critical, to preventing or stopping a suspicious situation. They are not granted the ability to execute any transactions in your accounts, or even view your accounts. And they would not have any power of attorney over your affairs.
Also, you can change or drop your trusted contacts at any time. The process of designating, changing or revoking your trusted contacts should be in writing. Talk with your financial advisors and institutions about designating trusted contacts.

Paul Hynes
Paul Hynes

Director in Wealth Management, Partner

Paul joined Aspiriant in 2021 via a merger with HearthStone Private Wealth Management, the San Diego firm he co-founded with business partner, Wendy Wildey. Paul serves as a Director in Wealth Management and Aspiriant partner. Paul also directs the fiduciary investment services team at Aspiriant. He brings more than 35 years of experience in the financial services industry.

Prior to joining the firm, Paul served 11 years as president and CEO of HearthStone. Before that, he spent 22 years with a large Wall Street brokerage firm. During that time, the firm changed its name 13 times and is currently known as Morgan Stanley.

Paul earned a Bachelor of Arts degree in Psychology from the University of Virginia. He earned the right to use the Certified Financial PlannerTM Professional designation in 2012. Paul founded Senior Safe & Sound, a non-profit educational resource and video library that seeks to educate and empower senior citizens and those they love to prevent elder fraud and abuse. He serves on the Investment Advisory Board of United Way of San Diego, as well as several other non-profit boards and committees.

Paul and his wife of over 40 years, Joanie, are empty nesters after raising two incredible and wonderful humans, Chris and Lauren. Together they enjoy sports of all kinds — currently golf, tennis and pickleball are favorites. They also enjoy travel, wine tasting and reading.

Get Aspirant Fathom Articles Direct to your Inbox

Want the latest wealth management tips, investment insights and Aspiriant news delivered straight to your inbox. Sign up for regular Fathom updates so we can send you the most relevant content you selected below.

Next up

Blog detail footer callout img

Meet the Team

In the end, a firm boils down to the people.

Learn more
Blog detail footer callout img