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Are Seniors at Risk for Probate Scams?

Jane Austen once wrote that “it is a truth universally acknowledged, that a single man in possession of a good fortune, must be in want of a wife.”

A more modern version of that quote may read a little more like this: “it is a truth universally acknowledged, that a senior in possession of a good fortune, must be the target of scammers and con artists.”

That’s a flowery way to address something very true - and very frightening - for many older adults. The reality is that seniors are targeted by scams at an alarming rate, and this problem is only going to become more prevalent as time goes on.

Seniors and Scams: Who Is At Risk?

Part of the reason why scams are on the rise is the general “graying” of the American population; as the Minneapolis Star Tribune reports, the number of Americans 65 and older “will reach more than 20 percent of the U.S. population in 2030. That’s up from 13 percent in 2012.”

Most victims of “financial exploitation” fall between the ages of 80 and 89. But just why are seniors so frequently the targets of scammers? As the FBI explains to the Star Tribune:

“Senior citizens are most likely to have a ‘nest egg,’ to own their home, and/or to have excellent credit — all of which make them attractive to con artists.”

According to findings from the FTC, 18% of consumers 70 or older reported that they lost money to fraud in 2017. Americans aged 80 or over also tended to lose more per scam, compared to younger generations; on average, seniors lost a whopping $1092 per incident, compared to just $400 for those aged 20-29.

In particular, older Americans are often at risk for one common type of fraud, which the FTC calls “imposter scams.” These occur when someone reaches out to a consumer, pretending to be a government official, a loved one in trouble, a representative for a company, or someone else. This was the third most common scam category reported to the FTC in 2017, but it also bilked consumers out of the greatest amount of money ($328 million, in all).

Given their many assets, seniors are often particularly vulnerable to these imposter scams. It is absolutely not uncommon to hear about scammers reaching out to seniors under the guise of being IRS agents, representatives from social security or Medicare, or insurance professionals. There have even been stories of scammers presenting themselves as probate attorneys or elder law practitioners, in order to gain the confidence of older adults, only to turn around and attempt to fleece them out of thousands of dollars.

To make matters worse, seniors often tend to live alone, and “need some form of assistance managing everyday life,” according to the Star Tribune.

Estate Planning: One Way to Minimize the Risk of Financial Exploitation

It’s important to remember that the threat of scams is very real for older Americans - and that education and vigilance may be what it takes to prevent calamity before it strikes.

In some ways, this may mean expanding your view of what estate planning really means.

Beyond the logistics of writing a will or granting power of attorney, many families may want to consider the many mechanisms that are out there to help safeguard older adults’ finances from predators. It’s also important to find a probate and estate professional who is responsible, trustworthy, and compatible with your communication style; thoroughly vetting your potential attorneys and service providers could mean the difference between working with a true pro, and falling victim to a scam.

There are also steps that consumers can take to help recognize, avoid, and report scams. When you have any estate planning conversations with older relatives, it may help to discuss the warning signs of a potential scam (i.e., getting contacted out of the blue, being asked to wire money, and so on), as well as next steps (i.e., breaking off contact, calling the police, or contacting a consumer protection authority).

While it’s important to remember that data is always changing, here are a few resources that offer information and sources that may help seniors avoid scams, and report them before they can affect anyone else:

Have any other questions about the best ways to approach estate planning and administration in the Chicago area? Don’t hesitate to reach out to our team with any questions or concerns!

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