Pamela H. and her husband lived in another state, so when a couple right around the corner from her 83-year-old mother took a neighborly interest in her mom, it seemed the answer to a prayer. The couple ran errands for Pamela's mother and took her to her doctors' appointments. Pamela thought they were simply being kind -- but their kindness was colored entirely by self-interest. She says they tried several times to persuade her mom to give them money, but the older woman refused. After she died, they demanded Pamela give them a large amount of cash they claimed her mother had promised to leave them in her will. Not surprisingly, she declined.
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But not everyone is as lucky as Pamela. Glynnis W.'s mother, who was diagnosed with Alzheimer's disease, was a victim of elder financial abuse. Her entire estate was wiped out by three individuals who conspired to have her sign away all of her assets. Despite Glynnis retaining power of attorney and remaining as the only beneficiary of her mother's will, she says the three managed to liquidate and divide everything her mother had owned.
"My mother died indigent," says Glynnis, who's still fighting to recover what's rightfully hers. But the perpetrators have fled the area, narrowing her chances. And the sad news is that cases like this are more common than many realize.
Crunching the Numbers
Elder financial abuse is an expensive drain on the U.S. economy. A study of media reports from April to June 2010 "estimated that financial exploitation cost older adults at least $2.9 billion" that year, according to a report by the Government Accountability Office, or GAO. According to the report: "The money that older adults lose in these cases is rarely recovered, and this loss can undermine both the health of older adults and their ability to support and care for themselves."
That often means that taxpayers end up footing the bill for housing and medical care once an exploited senior has been drained of his or her assets. In fact, the report says that in 80 cases involving Utah's elderly, that state's Medicaid program could pony up about $900,000 in Medicaid costs alone.
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The GAO report points out that unless law enforcement, the courts and adult protective services get better at protecting the assets of older adults, this country could see a sharp increase in the amount of public dollars replacing private funds that are illegally drained from their estates. And as the senior population increases, those numbers will only continue to climb. Certified Fraud Examiner Steve Lee says that "pre-grave robbing" -- which often goes unreported -- is an issue frequently encountered by private investigators, specialists in elder care law and colleagues.
"That phenomenon, taken together with the ever-growing number of seniors, produces unchecked opportunities for scammers," Lee says.
Both family members and strangers are behind these scams. "The confusion surrounding end-of-life processes and decisions makes not only the senior confused and distracted, but also tends to rock family members back on their heels," Lee says, adding that the majority of these crimes go both unreported and unpunished.
That's bad news for seniors hoping to remain self-sufficient until the end of their lives and pass on their estates to their children. And, says Emma Dickison, president of Home Helpers, the rise in scams designed to part seniors from their worldly goods, combined with an increasing elderly population, makes the prospects of increasing incidents of elder financial abuse almost a given.
"It is crucial for seniors and their loved ones to be aware of the signs and symptoms of abuse," Dickison says.
Signs of Elder Financial Abuse
Dickison, a Certified Senior Advisor whose company provides various levels of caregiver and companion services for seniors, says anecdotal evidence suggests that for every reported incident of abuse, five more go unreported. She advises family members and friends to pay attention to signs that the senior may be compromised, which include:
- Significant withdrawals from bank accounts.
- Items and cash missing from the home.
- Changes made in wills, titles, etc.
- Forging of the elder's signature.
- Purchase of unnecessary services, goods or subscriptions.
- Financial activity that could not have been initiated by the senior, such as ATM withdrawals when the account holder is bedridden.
Experts such as Dickison also urge that families stay in close contact with their elderly relatives -- something that can be particularly daunting with family members often spread out over long distances.
"What we can do is regularly call ... and encourage them to join support networks, whether online or community-based," says Dickison. She also recommends keeping in contact on Facebook and through Skype, and recruiting trusted neighbors to check in on the older adult from time to time.
Taking Legal Steps
Tom Fields' personal experience has led him to crusade for more effective legislation targeting elder financial abuse. "There is a clear lack of protection under current laws and legislation," says Fields, who is from Mentor, Ohio. He believes that in addition to current law being insufficient, law enforcement often has little idea of how to handle these cases.
It's true that police reaction to cases of elder financial abuse varies widely from jurisdiction to jurisdiction, and there is little crime-specific training available to them. Many jurisdictions treat these cases as civil, rather than criminal, cases, leaving families to struggle with stopping the siphoning of an elderly person's assets via a sluggish court system.
Ryan Zenk, an estate planning attorney and Certified Financial Planner professional, says he's witnessed many seniors lose everything to swindlers. Until legislation and education catch up to the seriousness of these crimes, Zenk suggests that seniors or responsible family members put a series of checks and balances in place to discourage theft. Here are his recommendations.
- Have co-agents under the power of attorney so someone has oversight.
- Have a guardian/conservator appointed for the benefit of the senior.
- Avoid naming a child as joint owner of a bank/financial account because he or she can legally access assets without recourse. Zenk adds that this can also lead to tax problems and issues with Medicaid.
- Set up a trust to hold assets with a trustee who has fiduciary requirements to protect those assets, since failing to do so can have significant ramifications.