Not all of these seniors are vulnerable to financial abuse, said Anek Belbase, research fellow at CRR. “People with mild impairment who have spouses or family members providing support can do just fine. They can still express their needs and priorities well and can avoid problems with support from someone they can trust.”

Dementia sufferers are at greater risk—and so are spouses who start managing household finances at a late age. “If a spouse who has been managing things dies first, the surviving spouse needs to learn to do this at an older age, possibly at a time when there is some cognitive impairment, and the ability to learn new things has probably declined,” Belbase said. “That’s a person who is susceptible to making financial mistakes and becoming a victim of fraud.”

Compounding the problems, financial judgment is one of the first areas of cognitive ability to decline—and numerous studies conclude that people suffering cognitive decline tend to think they are more capable than they really are. And family members often turn out to be perpetrators of fraud, Loewy notes.

Taking Defensive Steps

How to guard against becoming a victim? Experts recommend getting an early start by making plans to protect yourself in your fifties or sixties. Procrastination is your worst enemy, since the onset and progress of cognitive decline is difficult to predict.

Start with a financial checkup that includes a review of estate-related legal documents. Have a clear succession plan—a trusted family member to manage your affairs in the event you are unable to do so.

Also consider simplifying your financial affairs and consolidating accounts wherever possible, so that a trusted financial advisor, attorney or family member can easily keep tabs on things for you if the need arises. The risk of cognitive decline also argues for shifting to less active investments and automation of retirement income drawdowns.

And—if you work with a financial advisor, make it a fiduciary. Avoid any financial advisor who is not a fiduciary—a legal definition that requires an advisor to put the best interest of a client ahead of all else. If in doubt, simply ask anyone you are considering hiring to sign the Fiduciary Oath—a simple, legally enforceable contract created by the Committee for the Fiduciary Standard.

The advisor simply promises to put the client’s interest first, exercise skill, care and diligence, to not mislead you, and to avoid conflicts of interest.

This article was provided by Reuters.