Help Protect Your Parents' Assets From Fraud

After a lifetime of receiving support and assistance from your parents, it may be time to start thinking of how you can help protect them—and their assets—as they age, particularly as older Americans face an increasing risk of losing their resources to fraudsters.

Americans age 60 and older lost $1.6 billion to fraud in 2022, according to the Federal Trade Commission—about 60% more than this age group lost in 2021. The actual value of assets lost is likely even higher because many cases of elder fraud go unreported.

Factors for fraud

Several factors are driving this increase, including a rise in the number of older Americans, a higher reliance on potentially confusing technology for essential financial services and more innovative criminal tactics. Plus, with large retirement accounts, seniors often have the most to lose—making them an enticing target.

"Elderly people are particularly impacted by fraud because they don't have the time to make up for losses that younger generations do," says Nerre Shuriah, senior director of wealth planning at First Citizens. "They also may not be able to fend off scams as easily if they're using outdated methods like writing checks or taking calls on a landline."

As fraudsters' methods continue to evolve, there are some moves you can make to help protect your parents' assets. Consider these strategies to help keep their finances as secure as possible.

Look for signs of cognitive decline

Mild cognitive impairment—which may affect older adults long before a dementia or Alzheimer's diagnosis—might include increased forgetfulness, trouble recalling words or misplacing things. While such symptoms might not require daily supervision, they could indicate that you or another loved one should put some additional guardrails in place.

Shuriah experienced this firsthand when she was on a cruise with her family. Her mother forgot where she'd hidden her purse in her cabin and became scared to leave the room and find her family.

"That really hit home to me," she says. "I called my sister and said we needed to get on top of things."

The risk of cognitive impairment increases with age. One in 10 adults 65 or older has mild cognitive impairment or dementia. This number spikes to more than 80% for adults 90 or older.

Start asset-protection conversations early

The sooner you talk to aging parents about protecting their assets, the better off they'll be. Ideally, you'll begin these conversations well before they start to experience cognitive decline.

This allows time for your parents to warm up to the idea of needing help from you or others. Ultimately, you'll want to ensure they understand how and why you may need to step in—and discuss ways to work together to protect their assets.

These conversations may be awkward at first. It can be helpful to get the ball rolling by discussing a recent anecdote of elder financial abuse or by sharing steps you're taking to get your financial accounts in order.

Cover estate planning basics

Many estate planning best practices can also help protect your parents' assets from scammers. Having a durable power of attorney, for example, allows you to jump in and make or approve financial decisions for your parents if they can't do so for themselves. It's also important for you to know the location of your parents' accounts, as well as how you can access them in an emergency.

You may also consider retitling your parents' assets to provide better protection. When property or accounts have unclear or outdated titles, thieves may have a better opportunity to create a fraudulent contract or sell or use property without authority.

Keep parents updated on scams

Criminals are consistently discovering new ways to get between older Americans and their money. Here are some common scams you should put on your parents' radar.

• Romance scams: Fraudsters pretend to be a love interest to gain trust before asking for financial assistance.
• Government impersonations: Criminals claim to be a representative of a government agency like the IRS and demand payment. Note that government agencies will never call, text, email or message on social media to ask for money or personal information.
• Grandparent scams: Scammers pretend a grandchild or other loved one faces financial trouble and needs immediate help.
• Bank imposter scams: Fraudsters impersonate financial institutions to solicit sensitive information.
• Phishing email scams: Scammers design emails to look like they're from a familiar institution but include unsafe links or attachments.
• Lottery or prize scams: Fraudsters reach out via phone or email with the promise of a big prize but request payment before they distribute the award.
• Tech support scams: Cybercriminals pose as tech support workers and ask you to install software that ultimately grants them remote access to your files and accounts.
• Classified-ad scams: Fraudsters lurk on legitimate marketplace sites to list phony items or services for sale. They may also feign interest in something you're attempting to sell.

Red flags that a request might be suspicious include a demand for immediate action or an appeal for payment via nontraditional methods like gift cards or cryptocurrency. Also watch out for an offer of something that's too good to be true, like a prize for a contest you don't remember entering or unprecedented savings off a utility bill.

If you believe your parent has been a victim of a scam, report it as soon as possible to the National Elder Fraud Hotline.

Contact a financial advisor

If you're having trouble broaching this subject with your parents, their financial advisor—or yours—may be able to help. An advisor can serve as a neutral third party for difficult conversations. They also may be able to set you up as a trusted contact on accounts so they can alert you to unusual activity or signs of cognitive decline.

"It's important to balance overprotecting your parents with trying to monitor what they're doing or getting involved in their finances," Shuriah says. "It's an ongoing process."