A reader writes:

“My wife’s divorced and aging father has gotten involved with a much younger partner. He has taken her on luxury trips abroad and often takes her shopping. This young woman seems to be marginally employed. She has insisted on their getting married legally, even though she doesn’t plan to live with my father-in-law full-time and, in fact, lives across the country.

“In addition, as part of a prenuptial agreement, the father has agreed to guarantee that his new wife has the right to live rent-free in an investment property that is supposed to pass to the adult children as part of his estate. Is this aboveboard and, if not, what should my wife and I do about it?”

As the population of elderly people in the U.S. grows, so too does the potential for financial abuse and exploitation. Five million people are victims of some form of elder abuse and neglect every year, according to the National Adult Protective Services Association. But it’s hard to know the true number because just one in 44 cases of financial abuse — to single out one form — is ever reported.

Research suggests 5 percent of older adults have been victimized in the recent past by someone taking advantage of them financially. Usually, the perpetrator is a family member or someone very trusted.

Michael Hackard, a California attorney and author of “The Wolf at the Door: Undue Influence and Elder Financial Abuse,” notes that it can be difficult in practice to determine whether “undue influence” is being exerted. Is the supposed victim simply being generous by nature, or is he or she being taken advantage of financially?

You and your wife should look for red flags in her father’s financial affairs, such as unpaid bills or collectors calling. “I’ve seen homes go into foreclosure even though the senior has the financial ability to pay the mortgage,” Hackard says.

Other red flags:

He wires or transfers large sums of money.

He makes suspicious withdrawals or writes questionable checks.

He closes bank accounts or CDs without regard to fees.

He opens new accounts.

His Social Security or VA checks go missing.

He suddenly alters long-held will or estate plans and is reluctant to discuss these plans or share documents. This may be the first opening a family member has to learn what has been going on.

There are emotional signs to look for as well. One that already seems to be present is attachment to a new person in his life. Here are others:

Does your wife’s father seem reluctant to discuss his financial decisions? Is he ashamed to look you in the eye?

Does he seem confused or afraid when the topic of money comes up?

Is he excited about some new investment opportunity or charity you’ve never heard of?

Are there other signs of cognitive impairment?

There is a bright spot. Hackard says laws are evolving, and experienced attorneys are more able than ever to help elderly people and their loved ones protect their finances.

Hackard recommends that people set up a revocable living trust to protect themselves from fraud as they approach old age. The beneficiary is the person who sets up the trust and his/her spouse, and then it should pass to a trusted successor, an individual or institution.

Establishing power of attorney is an option to consider but choose carefully. Powers of attorney can be “springing,” Hackard says — meaning they take effect in case of incapacity — or they can be durable, meaning they go into effect immediately and stay unless revoked.

Finally, transparency can be a good thing. Elders should share their estate planning documents with more than one child, if they have them.

They should discuss their finances with longtime and trusted friends whom they know to have their well-being at heart.

Anya Kamenetz’ most recent book is

“The Test: Why Our Schools Are Obsessed with Standardized Testing, but You Don’t Have to Be.” She welcomes your questions at diyubook@gmail.com.