We worry about our kids being on social media, but what about ourselves or even our parents? In recent years, there has been an astronomical increase in scams, initiated through social media and dating apps, targeting seniors. Here are some of the things we think you need to know.
Cognitive Decline + Loneliness + Scammer = Disaster
We never want to believe that we could be that person who falls for a scam. It is important to realize that scammers are very good at what they do. They prey upon loneliness and target seniors and retirees on a fixed income, some with cognitive decline. As estate planning attorneys we have worked with many individuals who we never thought could fall into this trap, but they did. According to the FTC, During 2022 Americans lost a staggering 1.3 billion dollars to romance scams.
Romance scammers target older single adults, often by sending them a private message through social media. They initiate a conversation and create a false feeling of bonding or relationship. After nurturing the “relationship” they will begin to ask for or even offer favors. They may offer to teach you how to invest your money, or tell you that someone they love, like their child, is sick, hurt, or in jail. Then they ask their victims to mail gift cards, send cryptocurrency, or transfer money from a bank.
Romance scams can be particularly painful for the victims. Often a victim is completely unwilling or unable to admit it’s a scam, heartbroken to lose the feeling of love and affection they felt from the scammer. Many of them resent their loved ones who are trying to stop the scam and report the perpetrator. Sometimes the victim’s current cognitive function or mental health prevents them from being able to recognize the red flags in a romance scam.
How to Stop a Romance Scam
If your parent or another loved one is already embroiled in a romance scam, they may not listen to you when they are informed that they are being lied to and cheated out of their money. Often, they resist reporting the scammer and refuse to break off the relationship.
The court systems do have a legal process for stopping a romance scam, even if your loved one won’t admit it is a scam. Essentially your best course of action is to file an emergency petition for temporary guardianship and ask a judge to issue an order to freeze their bank accounts. In a perfect world this works seamlessly, however, in our experience often the financial institution provides pushback and judges don’t always issue the order, stating that people can give their money to whoever they choose.
How Can Estate Planning Help Me or My Parents?
One of the most important things to remember is that the people being scammed don’t believe that they are being scammed. Scam artists are constantly adapting and evolving, making it difficult to know when something is a scam and when something is legitimate. As we all know, an ounce of prevention is worth a pound of cure.
The best way to protect your legacy from future scammers is proactive estate planning. First and foremost, you have to admit to yourself that anyone could be susceptible to a scam of some kind. Any senior who is single, and thereby has sole decision making power over the available assets, could end up with cognitive decline or early onset dementia, becoming extremely vulnerable. To say this could never happen to you is like saying you couldn’t possibly catch a cold this coming winter.
The next step is to put your money into an asset protection trust. If you’re married, this can be triggered upon the death of one spouse, ensuring that there will always be at least two trustees. For your trustee, choose a person (or persons) who you know will have your best interest at heart. Someone who will both protect you from potential scams as well as support you in utilizing your assets the way you want while you are living.
Finally, we recommend a mindset shift. Many people come through our office and express their concerns that their parents may not have any planning in place. When they ask their parents about the will or trust, they are told that is none of their concern. We recommend that you choose to be more open, bringing your child or other beneficiary into your inner circle. Allow them to serve as a trustee and help them understand your wishes for your legacy. Keep them informed and they can become a backstop, to prevent things from ever going sideways.
Conclusion: Meet with your trusted legal advisor… like, today.
While we can’t give you legal advice through this blog or podcast, we will never stop encouraging you to meet with a trusted estate planning attorney. Express your primary concerns for your future and the future of your legacy, and then allow your trusted legal advisor to help you build your planning documents. We can create fail safes and redundancies that will protect what you have worked for and ensure that you and your beneficiaries are the ones who get to enjoy the fruits of your labors.
To listen to our full podcast about romance scams, click here.