Financial abuse of older adults is a growing concern, often perpetrated by those closest to them—family members, caregivers or even trusted professionals. It can take many forms, including theft, coercion, fraud or unauthorized use of funds and assets.
Fortunately, a well-crafted estate plan can serve as a powerful tool to prevent this type of abuse and safeguard an individual’s financial well-being.
Utilizing estate planning to an older adult’s advantage
One of the most effective protections against financial abuse is establishing a durable power of attorney. This legal document allows an individual to appoint a trusted agent to handle financial matters if they become unable to manage them independently. The key is choosing someone responsible, ethical and trustworthy. In some cases, naming two co-agents or requiring them to act jointly can provide an extra layer of oversight.
Another useful tool is a revocable living trust. With a trust, assets are placed under the control of a trustee—either an individual or a professional fiduciary—who is legally obligated to manage them according to the grantor’s instructions. This arrangement can reduce the risk of financial mismanagement, particularly when the trustee is someone experienced in handling financial affairs. Importantly, a trust can avoid the need for court-appointed guardianship, which may open the door to abuse if not carefully monitored.
Including specific safeguards in estate planning documents can further reduce the risk of exploitation. For example, requiring periodic accountings, appointing a neutral third-party monitor or designating a backup fiduciary can help ensure that finances are managed properly. In some cases, legal tools like spendthrift provisions can prevent assets from being squandered or taken by creditors.
Estate planning is not just about deciding who gets what—it’s also about creating legal protections that preserve autonomy and dignity.