How Estate Planning Can Protect Seniors From Scams

Seniors are one of the most common targets of scams, fraud, and financial abuse. According to the FBI’s 2024 IC3 Annual Report, the bureau received nearly 150,000 complaints from individuals aged 60 and over, totaling almost $5 billion in losses, with an average loss of $83,000. Those numbers are alarming, but what’s even more alarming is that fraud against seniors appears to be increasing, with the latest report showing a 46% rise in complaints compared to the prior year.  Scams can have devastating impacts on seniors, but several estate planning tools are available to seniors that can make them less vulnerable, as our Branson estate planning lawyers explain. 

Why Scammers Target Seniors 

There are several reasons why seniors are prime targets for scammers. First, they are more likely than members of younger generations to have assets worth stealing — i.e., savings accounts, retirement funds, paid-off mortgages, and Social Security income, for example. Second, seniors are generally less tech-savvy than younger individuals, making them easier targets for scammers who use sophisticated internet-based schemes. Compared to other generations, seniors are more likely to click on links in phishing emails or fall prey to spoofing schemes, as well as be duped by scams involving cryptocurrency, tech support, and identity theft. Third, many seniors experience cognitive decline and diminished capacity, which can make it more difficult to detect red flags or manipulative tactics. 

Estate Planning Strategies for Scam Protection 

Seniors have a variety of estate planning tools at their disposal to help safeguard their wealth and guard against scams. 

Durable Power of Attorney 

Power of attorney is a powerful yet versatile estate planning tool that allows seniors (or anyone else, for that matter) to appoint another person (the “attorney-in-fact”) to handle their affairs in the event that they become incapacitated. A power of attorney is referred to as “durable” because the authority granted by it continues in effect even if the principal becomes incapacitated. Durable power of attorney can be an effective tool for preventing scams against seniors because it allows the principal to authorize another person to handle — or at least monitor — their financial affairs. For example, a power of attorney could authorize an attorney-in-fact to monitor a senior’s accounts, pay their bills, and step in if necessary to stop unusual transactions. While there’s nothing stopping a senior from voluntarily giving someone else access to their accounts, a durable power of attorney makes it official and ensures that the authority granted survives the senior’s incapacity. 

The scope of the power of attorney can be as broad or narrow as the person who grants it (the “principal”) wishes. Some powers of attorney encompass the full scope of authority allowed under Missouri law, while others are limited merely to specific transactions. For more information about crafting a durable power of attorney for your situation, contact a Branson estate planning lawyer. 

Trusts 

Generally, a trust is an arrangement whereby one person (the grantor) transfers ownership of money, property, and assets to another person (the trustee) to hold for the benefit of a third person (the beneficiary). There are two major types of trusts — revocable trusts, which allow the grantor to make changes to the trust’s terms during their lifetime, and irrevocable trusts, which generally do not. Both revocable trusts and irrevocable trusts can be effective tools for scam prevention because they allow the grantor (i.e., a senior) to entrust their assets to a trusted person (typically a child), who is then legally obligated to manage the trust’s assets only in the interests of the beneficiary. For example, if a senior begins to have trouble managing their assets — say, by becoming the victim of a scam — the trustee can potentially prevent future scams by monitoring all transactions for suspicious activities. Like powers of attorney, trusts are highly customizable to the needs of each family, so you should consider speaking to a Branson estate planning lawyer if you think a trust sounds right for you. 

Digital Asset Protection

A digital estate encompasses a person’s digital assets, including email addresses, social media accounts, online banking and retirement accounts, and many others. It can also encompass the devices used to access those assets, like computers, phones, and tablets. Seniors’ digital assets are frequent targets for scammers, who attempt to gain access to their usernames and passwords through various means, such as phishing schemes. Once a scammer gains access to sensitive digital assets — such as a bank account — they can then use that information to make purchases, open lines of credit, and file fraudulent tax returns. 

A few ways to protect these assets include: 

• Using a password manager cuts down on reused passwords
• Enabling two-factor authentication enables an extra layer of security beyond passwords
• Appointing a “digital executor” who will handle the digital estate upon the owner’s death 

Digital estates are constantly evolving, so be sure to update your digital asset protection plan regularly. 

Guardianships and Conservatorships 

The best way to allow another person to make decisions on behalf of seniors is through a durable power of attorney. However, seniors can execute powers of attorney only if they have the legal capacity to do so; the option of granting power of attorney is rendered ineffective once the senior becomes incapacitated. In situations like those, the senior’s family members may have no alternative but to seek a guardianship or conservatorship, in which they ask a court to appoint a guardian (for personal care matters) or a conservator (for financial matters) or both. Like attorneys-in-fact and trustees, guardians and conservators are legally obligated to act in the best interests of their wards and protectees, ensuring their well-being and financial stability. 

Protect the Seniors in Your Life From Scams With Help From a Branson Estate Planning Lawyer 

The best way to protect the seniors in your life from scams and other misfortunes is to ensure that they have implemented a well-thought-out estate plan that accurately reflects their wishes. To get started in creating one, please contact a Branson estate planning lawyer at the LifeGen Law Group by calling 417-823-9898 or using our online contact form.