>> Benjamin Miller
Welcome. Thank you for joining this webinar today on cognitive decline and financial exploitation in older age. We're excited to present this webinar for you. Next slide, please.

This presentation is being made by a Consumer Financial Protection Bureau representative on behalf of the Bureau. It does not constitute legal interpretation, guidance, or advice of the CFPB. Any opinions or views stated by the presenter are the presenter's own and may not represent the Bureau's views. Next slide, please.

Deborah Royster is an assistant director with the with the CFPB overseeing the Office for Older Americans, and Miss Royster will open today's event. Ms. Royster.

>> Deborah Royster
Thank you and welcome everyone. Thank you so much for joining this webinar today, focusing on cognitive decline and financial exploitation in older age, mild cognitive impairment, which often goes undiagnosed in older adults can adversely affect financial decision making, leaving vulnerable adults at risk for financial exploitation. Financial exploitation is the most common form of elder abuse, and research suggests that a change in financial management skills may be an early indicator of cognitive decline. Although a person may be able to perform simple tasks such as writing checks or paying bills, they may have difficulty with more complex tasks such as balancing a checkbook or managing investments. Advances in the neuroscience of cognition and aging can help family members and professionals recognize the signs of poor monetary management and take steps to respond to and prevent the financial risks associated with early cognitive decline. Those research findings can be used to inform the work of law enforcement, Adult Protective Services, financial institutions, clinicians and other service providers. They're also relevant to older adults who can be empowered to take steps to protect our financial well-being. Next slide, please.

Today's webinar will focus on a presentation by experts in the field of aging and cognition. We are very fortunate to have an expert in cognitive science on our panel for today's webinar.

Doctor Nancy Hoffman is a geriatric neuropsychologist. In her private practice, Doctor Hoffman specializes in the neuropsychological assessment of cognition in older adults as an expert and practitioner. She will share insights into the cognitive capacity and how it relates to vulnerability to financial exploitation of older adults.

In addition, we have an expert speaker from the CFPB. My colleague Lisa Schifferle, a senior policy analyst with the CFPB Office for Older Americans, will discuss resources relevant to cognitive decline.

These include guides for choosing a financial caregiver and for those who are managing someone else's money. To get us started, Doctor Hoffman will give an overview of how the brain changes with age-related cognitive decline and how those changes may affect fraud susceptibility. I will now turn the program over to Doctor Hoffman. Welcome, Doctor Hoffman, and thank you so much for joining us today.

>> Nancy Hoffman

I wanted to mention that we were originally scheduled to do this in February, and so there's a little bit about sweetheart scams because of its closeness to Valentine's Day, but for various reasons. We're doing it now. Next slide, please.

So anybody can be conned by somebody who's good enough to do it. And I go out and I teach people how not to be scammed. And I myself have been scammed and they were very, very clever about how they do it. So even I have fallen for things. Next slide, please.

And these sweetheart scams are big business and one of the things that I do is evaluations for attorneys before somebody wants to make or change a will or I get hired as an expert witness. Families hire me to try to help an older adult and it seems to me that the scams are getting worse, and it used to be when I was doing a clinical evaluation of an older adult, I was surprised if they had been scammed. Now, 20 years later, I'm surprised if they haven't been scammed. They are so prevalent.

A lot of people are very embarrassed to tell others that they've been scammed, which is why I tell everybody I've been scammed. Because if I could be scammed in the job that I do, anybody can be scammed. And how it happens is there's this sense of urgency and as we go through this talk, you'll see that there are changes in the brain that occur naturally as we age, and it makes it easier for somebody to kind of rush us along. We can't really cognitively keep up with things the way we used to. And so a scammer works initially to get your trust and then moves in and starts doing their work. Next slide please.

So there are all kinds of things going on with sweetheart scams, and one of the most interesting ones I was involved with was an older man who lived by himself. He was legally blind and one of his adult children lived close by and kept up with him every day so that he could stay in his home and live alone. And at one point this adult child went on vacation for two weeks, two weeks. And when they came back from vacation, their father had been taken out of the state and somebody married him and that was part of the sweetheart scam and all this happened in a two week period. So scammers move very, very quickly and this concept of love bombing, which is of course overwhelming somebody with attention and sweet nothings and probably sex, if the person's capable, really gets a person excited. You know, when you're newly in love, your body, your brain floods with dopamine, and it kind of overrides your sensibility a little bit. It feels good to have that kind of attention and the scammers, really play with that. Next slide please.
So why older adults? Used to see younger adults. I was a neuropsychologist at Kaiser, so I saw anybody over the age of 16. I have never once been told that one of my younger patients had been scammed or was even receiving phone calls from scammers. Now on my on my phone, I have an iPhone and it alerts me when there's a potential scammer calling. And I'm going to say probably 75% of the time my phone rings, it's a potential scam. And why is this? I'm 69 years old. Once I hit a certain age, I became a target and there are a lot of reasons that older adults are targeted and younger adults are, and that's part of what we're going to talk about. But your brain, you can be scammed. Even if you don't have dementia, you can be vulnerable to undue influence, even if you are not declining cognitively at all.

And a lot of older adults, women in particular, are not financially literate. So my mother was 80 when my father died, and she had no idea what was going on financially. That was just the way that that generation managed things.

Also, older adults tend not to be very tech savvy. You saw a little bit of that when I had trouble getting my microphone to work and I'm not even, you know, that old, but it is difficult sometimes for older adults to be focused on technology. So if a scam, comes in and says do this, this, this and this. It's hard for somebody to resist if they don't understand what's happening to them. You also have the idea of social isolation, and at my age, my friends are starting to have grandchildren and I'm noticing a lot of people moving to whatever area their kids and grandkids live in. So if I were an older adult and let's say I wasn't driving anymore, my friends are either dying and moving away. I'm naturally going to be more socially isolated unless I take steps to counteract that and then loneliness. You know, most of the people I know that are scammed, most of my patients that are scammed are widows and widowers. And so people are lonely. They're isolated. They like the attention. They like having their brain flooded with dopamine from the love bombing and they're easy targets. And then the wealth aspect, I was talking to somebody recently doing a testamentary capacity evaluation. So she needs to be able to tell me what's in her estate, what it consists of, and give me an idea of the value they had bought their house for, I don't know, $20,000 in the 70s and she thought it may be worth 100 hundred 150,000 and the house had just been sold for $4.7 million. This is in California where things are ridiculous, but still she had no idea. Next slide please.

So also, you know, as as an older adult's age, we become, you know, illness catches up with this. A nurse friend of mine was just telling me it's your 70s where things start to really change and your health really starts to change. And this is the age at which people are being scammed and it just depends on your situation. But a lot of older adults need some sort of help and it's not unusual to find that the help, the caregivers and that type of thing, are the ones who are actually exploiting the adult. Next slide, please.

And if you think about how you function on a daily level, a daily basis, everything changes and things require activities that we do require greater cognitive skills than we really realize. So one of the most cognitively complex things we do is we drive, and when you can no longer drive, you become very isolated. And I think a lot of older adults are driving Long, past the time they should give up their license, but it's almost impossible to get somebody to stop driving. So my mother, she's 96 now, stopped driving a couple of years ago after into the side of an Amtrak. Hard, hard to miss, but she managed to hit it. And another thing that happens is that in order to assess somebody or use our social skills, we've got to be able to have an impression of somebody else. And one of the things that happens is as we age, we develop what's called a positivity bias. This is from Laura Carstensen from Stanford University and her research. And we have a tendency to see the best in people, which is very nice. We get along with people. We're happier as we're older. We're a little more peaceful as we're older, less involved in conflict. But what happens there is we have a tendency to miss the red flags that we might have caught when we were younger or that our adult children catch and also our ability to make good financial decisions changes as we age. And with this state called mild cognitive impairment, which basically means cognitively you're weak in one area and usually it's memory, but other than that you're functioning in your life. And the research shows that even in this early, early stage of dementia or pre dementia, some people call it, we lose. We start to lose our ability to manage our finances. Next slide please.

Also, our reaction time slows down. And so when I'm talking to an older adult in my practice, I slow down and I talk more like this and I'm checking in to make sure that the person's following. I'm not going too quickly. Now, if I want to take advantage of you, I'm going to start talking really fast because you're not going to be able to keep up with me. And if I'm throwing out a lot of information at you, it's going to get confusing and overwhelming. But the good news is you'd be more willing to go along with whatever I suggest. If you can't keep up with what I'm saying, on the other hand, aging and cognition, it's not all bad. We are capable of complex thought. There are more dots that we're able to connect and based on our experience in life, we can, if we're so inclined, interpret other people's behavior, we become better judges of character unless, you know, we're being conned. Next slide, please.

So again, this is Laura Carstensen's work, where she talks about how we are more focused on positive emotions, less focused on negative emotions, makes our lives more peaceful, but it makes it more difficult to see red flags. And we become better able to control our emotions when we're older. This is the good news about getting older. Next slide, please.

And overall, if we're just experiencing some mild age-related memory loss, we're still functioning. We're still paying the bills, going to the grocery store, cooking, cleaning, all of those things that we typically do, we may have slowed down.

When I'm doing a neuropsychological evaluation of an older adult, I often have to give them extra time to answer, whereas somebody younger is going to answer much more quickly. This doesn't mean that a person has dementia or is cognitively impaired. We just slow down a little.

Another thing that happens is that we're learning new information, but our ability to recall that information slows down a little bit. One of the things I tell people is that if I if you say I saw a movie last night, but I can't remember the name of it and I say, oh, maybe it was, I don't know, love story comes to my mind and you say, oh, that's right, that's what I saw. It was love story. I just couldn't remember the name. That's normal aging. If we watched a movie last night and you can't remember the name of it. And I say it was love story. And you say I said I don't think it was. You do not recognize the information. That is a sign, an early sign of Alzheimer's. And it's the effect is almost like when you would tell your kids go clean your room and then I say to you it goes in one ear and out the other. That's kind of this sense that you have when you're talking to somebody with Alzheimer's. Even before they've actually formally been diagnosed, their the information isn't there for them to recall and a person in early stages of dementia or even in normal aging, day-to-day functioning may slow down. It may take longer to do things, but you can still do them. And one of the things that happens with Alzheimer's is people lose the ability to remember how to do something. And so I've seen pictures, you know, this is what happened when he tried to make coffee and it looks like a bomb went off in the kitchen because he couldn't remember how to use the coffee maker that he'd been using for years and in age-related memory loss usually.

We would call those the worried. Well, perhaps a patient will come in and say I'm having problems with memory, but when I interview collateral sources, family members or friends, they'll say no, I think they're actually fine. Next slide please.

So in a mature brain, in normal aging, we have a reduction in what's called working memory. And working memory is the ability to hold information in mind for a short period of time while you do something with it. It's it's almost like a post-it in the brain and a very simple example is back in the olden days when I was growing up, our phones did not memorize phone numbers and so I wanted to know John's number and my brother would say it was 707874 blah blah blah. I would hold it in mind long enough to dial the and then I would let it go. I wasn't trying to memorize it. That's working memory and we use that all the time. We're driving to somebody's house and we've got to remember to turn right on Main Street. If we are looking over a contract someone wants us to sign, we've got to hold the information in mind. Consider our options and make a decision. This becomes more difficult as we get older and then this reduced processing speed. Like I said before, if I'm talking to an older adult I'm talking more slowly to give them time to take in and process the information. If I'm talking to a younger person, I'm probably going to talk a little bit more quickly. We just don't process as quickly as we once did, but that's totally normal.

Consider divided attention. We're in a restaurant and they've got, you know, 16 televisions, the, you know, on 16 different channels and there's noise and I've got to block out all of this noise and all this stimuli so that I can focus on my conversation with you. That's difficult when you're young and almost impossible as you get older. There's also there is a lot of research coming out now that says as our hearing declines, our ability or tendency to develop dementia increases. I don't completely understand the action. But I'm seeing more and more older adults with hearing problems who refuse hearing aids for various reasons. Part of it is they're very expensive. Part of it is they don't like the certain buzzing sounds, or they're uncomfortable, or they're hearing things they don't want to hear. But this is a problem. That is sort of normal, and we're not problem solving as quickly. We're not planning things and moving along and setting things up as quickly as we once did. And it also becomes a little more difficult to distinguish between relevant and irrelevant information. And the scammers take advantage of that because they're going to flood you. They're going to talk quickly. They're going to have a lot of words flowing at you. They're going to flood you with information because they know an older person isn't going to be able to take in all of that information, process it, determine what they should focus on and what they shouldn't focus on, and then make a well informed decision. Not if I flood you with information. Next slide please.
So what is dementia? I think this is something that is confusing to people. Dementia in and of itself isn't really a diagnosis, although you do see it in medical records a lot. And dementia is really an umbrella term and it covers changes in the brain that cause you to have some difficulty in your day-to-day functioning. And there are many types of dementia. I've heard something like 70 different types of dementia. I don't know if that's true or not, but we do have quite a few different types of dementia that we are hearing about more and more in the news. Next slide please.

So here are some of them. Mild cognitive impairment is sometimes considered pre-dementia. People with mild cognitive impairment, as I said a little bit earlier, often have just one area of cognition that isn't working well, and that tends to be memory. So I might test somebody whose cognitive functioning is completely normal, but they have a little difficulty learning new information, and they are starting to show signs of what we call rapid forgetting, which tends to be a hallmark feature in  Alzheimer's. And that's where you're hearing people repeating themselves or asking you the same question over and over again. And some people will transfer from mild cognitive impairment to Alzheimer's, and some people just stay in the mild cognitive impairment stage. And we don't really 
understand why. But the research shows that even in mild cognitive impairment, this pre-dementia, you begin to lose the ability to manage your finances efficiently. And as was said a little bit earlier, changes in financial functioning are often a first sign that a family member. And you know, older adults, they don't want you involved in their finances. If you have an adult child, you don't want your kids involved in your finances. And sometimes a lot of damage can be done before the family even realizes that something's been going on and that the financial picture isn't what it should be and this frontotemporal dementia, we're seeing a little bit of that with Bruce Willis. We just had news this week that his family finally moved him into a memory center. And frontotemporal dementia means this front part of the brain that's literally the seat of executive function. It's like an executive in a company. This is a good idea. This is a bad idea. I set a goal. I want. I'm motivated to achieve that goal. Here's a sequence of steps I'll follow when the front part of your brain starts disconnecting from the rest of the brain. You see people's behavior change, and oftentimes this type of dementia can mistakenly be diagnosed as a psychiatric situation because people aren't recognizing yet that the person actually has dementia. They're just noticing these behavior changes. And then Lewy body dementia is like a dementia that comes with Parkinson's and visual hallucinations are one of the main symptoms of this. So I had a very interesting case where this man told me, and he absolutely believed this, that he was watching Wimbledon and about halfway through the newscaster, who he thought was very pretty, came through the television and they cuddled on the couch and watched Wimbledon together and he was telling this. He believed that this was true and it was not distressing to him. He had Lewy body dementia. I won't go over these other types of dementia, but I just wanted to draw attention to the fact that there are many different ways that a person can have dementia. Many different ways that a person's cognition can start to decline and affect their functioning and make them more susceptible to fraud. Next slide, please.

So this is a very frightening statistic, and it really means that we are probably looking at people who are in the early stages of dementia without realizing that they are. Because if you're smart, if you've got good attentional skills, if you've got good verbal skills, you can appear to be functioning on a much higher level than is actually the case. And there are a lack of neuropsychologists in this country. So it's very difficult and can be very expensive for somebody to get an assessment. So oftentimes people are having a screening test done in a doctor's office and my original mentor used to love to tell this story about a brilliant pediatrician who would get perfect scores on the mini mental status exam that was in reality actually quite demented. But he was so intelligent he could cover it up, cover up on these screening tests. So looking 30 to 50% of people over the age of 85 have some type of dementia. As I get closer to that age, that's a little frightening, but it also means that our parents or the older adults in our lives may be declining in ways that we don't notice and really make them susceptible to scammers. Next slide, please.

So I'm not going to spend too much time on this, but the I put in more slides than we really need just so you have something to take home with you because the early stages of Alzheimer's. So that is the most common form of dementia right now and the early stages of Alzheimer's, they say that people are exhibiting symptoms up to 20 years before anybody really notices and they get a formal diagnosis. And when people will talk about an older parent and they'll say, well, there was this odd behavior or that odd behavior, I just thought it was a one off.

And it turns out that what they were looking at was an early sign of dementia and just not really being able to see that, not not being able to put it into context. And if you look at all of these things, all of these changes, you know, somebody will start saying something like can you and they, you know, pat their hand on their what on their wrist where a watch would be and they want you to tell them what time it is, but they can't quite get those words out. Or they'll say, well, I was trying to. And they go like this and you say, brush your teeth. Yeah, brush my teeth. I I yeah, I couldn't find those words. And you know, all of us, as we age, we are have a little more difficulty finding words, particularly people's names. I get people coming into my office all the time. I know I have dementia because I can't remember people's names. Sadly, this is a part of normal aging, and we don't know why, but remembering people's names is not necessarily a sign of dementia, but it is difficulty remembering is just part of normal aging.

And this executive dysfunction, what I was talking about with the front part of the brain, as the brain changes, we're not making such good decisions anymore. And some of this leads to anxiety and depression in older adults who were not anxious or depressed at earlier times in their lives and I can totally understand it. If I were showing signs of dementia or I was concerned about memory loss, it would make me anxious and depressed too. We talked about the difficulty managing finances and then how to do things is impaired. Next slide please.

So how do we know that somebody is being financially exploited? One of the, you know, sort of horrifying things I see in my practice is, you know, I have an older parent. I want to respect my parents' independence. I don't want to stick my nose in my parents' business.

I don't want to make my older parent feel deficient or that I think something's wrong. So I'm trying to, you know, kind of straddle that line between being a supportive, loving adult child and also respecting my parents' independence. And so I hear these horror stories. You know, my mother didn't pay taxes for three years and they were going to put a lien on her house and nobody knew anything was going on until, you know, her attorney called and da, da, da, da, da. And we're not seeing what's happening financially sometimes until it's too late. And and so these things that we're starting to see are like large cash withdrawals and apparently the scammers will actually give you a script to follow when you go into the bank to take money out. And one of the most common scripts that I'm hearing is I need to have work done on my house and that's why I need $50,000 in cash. And the best thing is that the bank tellers and the bankers are starting to be trained to recognize all of this and to be able to put a stop to it or to have somebody they can call in a lot of what in my world I call collateral sources. So friends or family members that are giving some extra information will tell me they had no idea anything was going on until the bank called. And so the scammers are really good about that. I'll tell you exactly what to say. And also these ATM withdrawals, you know, my mother's 96. I don't know if she's ever learned to use an ATM machine in her life. But if we saw suddenly there is a lot of activity using her ATM card, that would be a big red flag. Also, somebody coming into the bank with the elderly person is a red flag. 

Now sometimes it's legitimate. You know, the caregiver will take somebody to the bank, but and, you know, help them take money out or something. But we're talking about these big withdrawals or, you know, I'm coming into the bank three times a week with my caregiver and I'm taking out much more money than I used to. Or signatures on documents that don't look right. And also, you know, if you think about how you might feel being taken into the bank to withdraw money, you're not going to be your confident, independent, relaxed self. There's going to be something in your behavior that might be a red flag to somebody who's trained to look for it, like a lack of eye contact or some embarrassment. Next slide, please.

So this is another one is, you know, I will be, you know, working with family members and find out mom has been signing over large amounts of money either to a caregiver or oftentimes it's an adult child who's maybe not doing so well in life and is getting more and more help from mom and or the unpaid bills. So I'm working on a case right now where they've taken over mom's finances against mom's will, but she was giving all her money to one of her adult children and not paying her bills, not paying her taxes and that kind of thing. And family has to go through and try to rectify all of this. Or if somebody changes and the bank statements aren't going to their home anymore, where the family member who helps them with finances can see what's going on, but going to a new address and then DPOA durable power of attorney that customers, they don't necessarily understand it and oftentimes don't have the capacity it takes to assign a new DPOA like that. But now you can get documents on the Internet. You can find somebody to, you know, help you sign and notarize a document and take over somebody's power of attorney very easily. And then this is a place where I get involved a lot, which I'm more and more attorneys are calling me to do evaluations of capacity prior to somebody making or changing a new will or new trust. Next slide please.

So how can people help? And here are I'm out of time, but here are some things that you can do if you're concerned about the person in your life, if you work in a bank, if you are somebody in the helping field or somebody who works with older adults. So thank you.

>> Lisa Schifferle

Thank you so much, Doctor Hoffman. We really appreciate you being here on this webinar to share your expertise. Hi, everyone. My name is Lisa Schifferle and I'm with the CFPB's Office for Older Americans. And now that Doctor Hoffman has explained the science behind cognitive decline, you might be wondering what can be done to try to prevent exploitation when someone does experience cognitive decline. So I'm going to talk about some free CFPB resources that may help if you or a loved one is experiencing cognitive decline. These are resources that can help you explore options for financial caregiving, including different levels of support depending on the stage of cognitive decline. Next slide, please.

So I'm going to focus on a publication that we call Considering a Financial Caregiver and Know Your Options. This piece is designed for people who are early in the caregiving process. So maybe you're just starting to notice that a loved one is experiencing cognitive decline, those early signs that Dr. Hoffman described, and or maybe you're planning ahead for your own financial future, because as Dr. Hoffman said, unfortunately, though we don't like to think about it, a lot of us will experience cognitive decline in the future. So this publication lets you know your options. It covers informal caregiving options like convenience accounts or adding a trust to contact person. It also covers formal caregiving options like power of attorney, guardian, trustee, or government fiduciary. And finally, it gives you a list of questions to help you consider who's the best person to choose as your financial caregiver. So I'll explain about each of those options on this webinar. Next slide, please.

So an informal caregiver is someone who helps on an as-needed basis, and we talk about three different types, a conversation partner, a trusted contact person, and convenience accounts. Next slide, please.

We'll start with the conversation partner. This is just when you give a trusted relative, friend, or professional an overview of your finances. You can share as much or as little as you want, and you're not giving up any control over your finances. For example, you might ask your broker or banker to send a copy of statements to your adult daughter or to your accountant. Or ask a trusted friend or relative to join you when you visit your banker or financial advisor. Please remember, as Doctor Hoffman pointed out, that it's really important to choose this person carefully because we do see sometimes caregivers who perpetrate elder financial exploitation. So our guide discusses questions to think about when you are choosing a financial caregiver. Things like, do I trust this person? Will they do what's in my best interest? And are they organized and do they keep good records? So let's move on, next slide please, to the next type of informal caregiver, which we call a trusted contact person. 

Now, what you should know about a trusted contact is that this allows the financial institution to contact that person in certain circumstances, like if the financial institution thinks there's financial exploitation. Trusted contacts do not have any access to your money. They don't even know how much you have in the account. They just get notified if the financial institution sees signs of exploitation. So trusted contacts are currently available on all brokerage or investment accounts, and some other financial institutions are also offering them as well. You just need to ask them about adding a trusted contact, or some of them may call it an emergency contact on your account.

Again, it's important to remember that these trusted contacts do not have access to the funds and not help with bill paying, but they do get notified if there are signs of financial exploitation. Next slide please. 

So the next type of informal caregiving option I want to discuss is a convenience account and this names someone to help you deposit or withdraw money and write checks. This can be helpful for someone whose cognitive decline may have progressed a little more so that they need help with paying bills. An important thing to understand is that a convenience account is not the same as a joint account. In a joint account, money is jointly owned and the joint account holds or automatically gets the money when you die. So oftentimes people set up joint accounts when managing money because that's what they're familiar with. But this can have unintended consequences. For example, if you think about a parent and an adult child who set up a joint account for managing money. This could have unintended consequences that the adult child would then inherit all the money in the account if the parent passed away, whereas the parent might actually want to split that money between siblings. Also with the joint account, if the adult child gets in debt, creditors can come after the parent for the child's debts and vice versa. So the nice thing about a convenience account is it does not change the ownership of the money in the account, and it does not give your helper the right to keep the money when you die. So the money belongs only to you.

Those are three types of informal caregiving options that our guide discusses. Next slide, please.

And in addition, we also discuss some formal caregiving options, things like power of attorney, guardian, trustee, and government fiduciary. Each of these, we also have a full-blown managing Someone Else's Money guides. Next slide, please.

And these four Managing Someone Else's Money guides are to help family members and friends who are financial caregivers. So maybe you become a power of attorney and don't really understand what that means. This will help guide you through that process. These are all available at consumerfinance.com/msem, like managing someone else's money. So that's consumerfinance.gov slash MSEM. And they help financial caregivers understand their duties. They provide tips and resources to help fiduciaries. They include information on identifying benefits and describe warning signs of elder financial exploitation. You see four different guides, and each guide covers a different type of fiduciary or formal financial caregiver. And we're going to talk about each one of these now, the power of attorney, guardian, trustee, and government fiduciary. Next slide, please.

Before I get into the details of the different types of fiduciaries, I just want to take a step back and discuss what does it mean to be a fiduciary. If you're managing money for a loved one, you may hear this term fiduciary and wonder what it means. And it's basically a legal term that means anyone who's legally named to manage money or property for someone else. Now, in a power of attorney, that relationship is established in a legal document. In the government fiduciary situation, that fiduciary is named by the government agency. A guardian is named by the court and a trustee can either be named by a legal document or a court. And our guide really focuses on the type of trustee that's named in a document. So let's look a little more at each of these types of financial caregivers. Next slide, please.

A power of attorney is a legal document, and in it someone known as the principal gives someone else, known as the agent, legal authority to make decisions about their money or property. Often people make powers of attorney so that someone else can handle their money if they become sick or injured, or if they experience cognitive decline and can no longer  manage their finances. In some states, it's called a durable power of attorney, as Dr. Hoffman mentioned. And these powers of attorney are private arrangements because they don't involve appointment by a court or a public agency. A lot of people wonder, well, why should I get a power of attorney? 

Some things to keep in mind with the power of attorney: You name who you want to manage your finances. So while you still have all your facilities about you, you can name in a power of attorney who you want to manage your finances if you in the future are unable to do so, as opposed to if you don't do that, then later on someone else a court perhaps will choose it for you. They also make it easier for your loved ones. Powers of attorneys do, if you become unable to manage your finances because they can pull out that document. So it's important to note that an individual can also make a healthcare power of attorney to name someone to make decisions about healthcare. The CFPB guide focuses on the financial power of attorney, but both documents can be helpful to have in cases of cognitive decline. And oftentimes people will get one and think, oh, I have a power of attorney and I'm covered and not realize that they need both one for financial decisions and one for health care decisions. Next slide, please.

Next, let's talk about government fiduciaries. A government fiduciary may appoint someone to manage income benefits for a person who needs help managing those benefits. So the Social Security Administration calls that person a representative payee if they're helping someone with their Social Security benefits. The VA calls it a VA fiduciary. The important thing to know here is that a representative payee or a VA fiduciary only has authority to manage the benefits checks of the agency that made the appointment. So, if the beneficiary has other money or properties,

property, a fiduciary must have legal authority from another source to manage anything other than the benefits check. So they need to also be power of attorney or guardian or some other legal authority. Now, on the flip side, even if you are an agent under a power of attorney or a trust, or if you're a guardian or conservator, you don't necessarily have legal authority to manage the federal benefits checks. You still must be appointed by the government agency paying the benefit. So a lot of people don't understand these types of fiduciaries in particular, especially the VA fiduciary. So these guides can be really helpful if you're serving in this role. They will not only to help you understand, but you can also take them with you to give out to others to help them better understand what your role is. Next slide, please.

The next type of formal financial caregiver I want to discuss is called a guardian. A guardian of property is what we're going to focus on and that is someone who the court names to manage money or property for someone else who the court has found cannot manage it alone. Some states use the term conservator rather than guardian, and a guardian or conservator can be needed in cases of an accident or sudden illness.

When somebody has no power of attorney, sometimes a guardian of property is also appointed as well as a guardian of the person. That's kind of like the power of attorney where one relates to healthcare decisions and the other to financial decisions. Just to give you an example of how guardianship might come up, when my grandmother was in her 70s she was otherwise in relatively good health, but she was hit by a gravel truck trying to make a left turn and unfortunately was in a coma for weeks before she passed away. And because she did not have power of attorney, her family had to get guardianship to pay her rent and bills while also dealing with the health crisis. So it meant a lot of doctor certifications and court proceedings while also dealing with a health crisis. So I just share this story to explain why many people prefer to have a power of attorney document so they can choose the caregiver they want and their family has a document they could pull out in a circumstance like this. I also mentioned it because cognitive decline can be gradual, and that's what we often think about, but it also can be the result of a traumatic injury like this. Next slide, please.

Finally, I want to talk about trusts. A revocable living trust is a legal document. In that document, someone makes a revocable living trust to give someone else legal authority to make decisions about money or property in the trust if they can't make decisions themselves.

So the trust also specifies who gets the money or property in the trust after the person who created it passes away. And the person who makes those decisions about the money and property in the trust is called the trustee. So the thing to know about this is that basically you can put some of your money or property in this trust and assign it to a certain person. So sometimes people may say, OK, my car is in trust to my grandchild or 10,000 is in trust to this person. So you can kind of dole out different parts of your money and property to different people in a trust. Next slide, please.

So that covers the four types of legal fiduciaries. And because it's so important to understand the duties of fiduciaries, I'm just going to take a few minutes to go over some of the duties that are common to all four of these legal fiduciaries that we just discussed or the formal caregivers and they include acting in someone's best interest, and that's avoiding conflicts of interest and the managing someone else's money guides that I talked about before. I go into great depth about all of this, so you can learn more there. They also include managing the money and property carefully, compiling an inventory, keeping the person's money separate. And it talks about how to title bank accounts and how to sign checks and also keeping good records. So let's look at each of these in a little more detail. Next slide, please.

The first duty is to act in someone's best interest. And the main thing here is to know about conflicts of interest. So let's say that Robert is the name of the person whose finances you're managing. A conflict of interest could happen if you make a decision about Robert's money that may benefit someone other than him. So think about it. Say you use Robert's money to buy a car and you use that to drive them to appointments, but most of the time you drive the car just for your own needs. That could be a conflict of interest. Um Think about doing business with family too. Say Robert needs repair work done in his apartment and you hire your daughter and pay her from Robert's money. This could be a conflict of interest too, even though the work was needed because you might have been putting your own personal interests and your daughter's interests over Robert's interests. Also important not to loan or give Robert's money to yourself or others. And especially critical to get approval before paying yourself for your services. In some types of fiduciary relationships you may be able to get paid, but before doing so you need to check with the court, government agency, state law, and the terms of any legal document or court order. The second duty on the next slide, please, is managing money or property carefully. That includes making a list of property, thinking of everything like checking and savings accounts, cash, pension, real estate, jewelry, furniture and more.

You also need to protect that money and property. Think about putting it in safe deposit boxes, changing any locks, pay bills on time, and don't forget about taxes. A lot of people forget about taxes and that could be your responsibility as well as a fiduciary. Also, the bottom of this slide gives you some tips on checking for benefits eligibility to see if the person is eligible for any additional benefits. You can go to eldercare.acl.gov or benefitscheckup to get more information on that. Next slide please. The third duty of a fiduciary, and again all of this is in the guides if you want to go more in depth, to keep money and property separate, and it may sound obvious, but separate means separate. So never deposit. Again, we're going to use the name Robert. Never deposit Robert's money into your own or someone else's bank account or investment account. Avoid joint accounts for the reasons we discussed before. Don't set up joint accounts if you are married and already have joint accounts and are power of attorney or fiduciary for your spouse, consult with an attorney about that. The guides also go over how to title property and how to sign, depending on the type of fiduciary you are. Next slide, please.

The fourth and final duty is to keep good records, so to keep a detailed list of everything you receive and spend for the person or your financial caregiver for. That includes keeping receipts. It's better to avoid paying in cash so you can keep a better record. And again, you can learn more about all of these and order our managing someone else's money guides for free at consumerfinance.gov/order.

And I'll show that link again at the end of the presentation. But first, now that I've gone over these financial caregiving tools and considering a financial caregiver and managing someone else's money, I want to share with you a few other CFPB resources that may be helpful to you. Again, these are all free And available at consumerfinance.gov/order. On the left here you will see our network development guide. You can find that at consumerfinance.gov/eldernetworks. That one's actually an online guide, so you can't order it, but it's designed to be online with interactive templates. And a lot of you probably know about this because this is.

Networks webinar and this is a guide for elder fraud prevention networks. It gives you tips on how to build and grow a network. And like I said, this webinar today is part of our webinar series for elder networks. You also have a lot of materials available at consumerfinance.gov/olderamericans on the right side of the slide here. You'll see some of them. We have fraud prevention placemats and handouts on a whole variety of different scams. And we also have our Money Smart scam prevention materials. Next slide, please.

The Money Smart for Older Adults curriculum is one of our flagship programs. It's a scam awareness program we developed together with the FDIC and there are multiple components to the program. There's an instructor guide in PowerPoint which can be used to deliver presentations to groups, and there's a resource guide that can be provided to groups or individuals. You don't have to be an elder fraud expert to use this. It's designed for anyone who wants to go out and give a presentation. We provide you with the script, a PowerPoint, and the tools you need to get out this information in your community. And if you just don't want to give a presentation, you can simply order our resource guide for older adults and hand that out either as a supplementary presentation or for people to read as a standalone. Again, these are all available in bulk for free at consumerfinance.gov/order. And also, if you want to learn more about Money Smart for Older Adults, I'm excited to let you know that the FDIC will be hosting a webinar on September 25th from 12:00 to 1:00 Eastern Time, and the CFPB and SEC are scheduled speakers. We'll put the link in Q&A If you'd like to register, you can also find it at fdic.gov/news/events. That's fdic.gov/news/events and look for the Money Smart Town Hall. It's a national town hall focused on helping older adults and their families recognize and prevent scams and it's held in anticipation of National Cybersecurity Awareness Month, so we hope you'll be able to join us for that presentation as well. Next slide, please.

And finally, before we close, I want to leave you with information about how to contact us. You can contact the CFPB's Office for Older Americans using the e-mail address shown olderamericans at cfpb.gov. And please don't forget to check out the resources at consumerfinance.gov/olderamericans. Find all the materials that I mentioned on this webinar, plus a whole lot more. And last but not least, you can order our CFPB materials at consumerfinance.gov/order. The materials are free and so is the shipping, so we do hope you will order them to share them widely in your communities. I'd like to thank again our guest speaker, Dr. Nancy Hoffman, for sharing her expertise, and thank you all for joining us. We hope you'll take what you learn on this webinar today, pass it on to others in your communities across the country.

That concludes our webinar. Thank you for joining us and have a great day.