The new law goes a long way in protecting the elderly from the increasing threat of scams.
Elder financial abuse is very costly, at billions of dollars annually, as well as the emotional toll on the elderly, as the scams become more sophisticated, according to Forbes in ““After SAFE Act Passage, The Battle Against Elder Financial Abuse Remains Far From Over.”
The aim of the Senior Safe Act is to encourage all types of financial institutions to play a larger role in fighting against elder financial abuse. The law, which was modeled after the Senior$afe program created in Maine, requires financial institutions to train employees on detecting activities that may indicate elder abuse is occurring. If the employees are trained, the Senior Safe Act also provides a reporting process and liability protection for those who report the possible abuse. It is thought that the liability protection would make those individuals reporting the possible abuse more proactive. However, there are still some problems with this.
Some advisors report being reluctant to report any client who seems to be suffering from mental deficiencies or elder abuse. The problem, advisors say, is that they are not trained and won't feel confident in making a judgement about competency. Some court cases have put the onus on the advisor, when selling certain products or strategies but advisors lack both the training and the ability to make a medical diagnosis of senior clients. Without the ability to identify competency, it is very likely that any reporting will only take place well after the elder financial abuse has taken place.
Another issue is that family members or friends are typically the ones who commit elder financial abuse. The victim usually does not want to press charges, fearing that the person will become angry with them and withdraw their emotional support. Being dependent upon the same person who may have perpetrated financial abuse, puts the elderly person in a no-win situation.
Elder abuse prevention, financial and otherwise, should start years in advance, at the first signs of declining physical and mental health. It should begin with a plan for managing financial assets and having the proper legal documents in place, including a will, power of attorney, general durable power of attorney, healthcare directive and other estate planning documents.
An estate planning attorney can advise you in creating an estate plan that fits your unique circumstances and protects all members of your family.
Reference: Forbes (July 23, 2018) “After SAFE Act Passage, The Battle Against Elder Financial Abuse Remains Far From Over”