We hear of scam artists taking advantage of the elderly far too often. These incidents tend to involve caregivers, persons with powers of attorney, perfect strangers, and even family members. These are all forms of elder abuse by financially manipulating the elderly.
Some traits that we see far too often our loved ones that suffer from severe memory loss and dramatic mood swings. Often they sleep through the day and stay awake at night. Their state of being continually disoriented makes them an easy target for those who wish to manipulate them into making poor financial decisions.
A study completed by MetLife Mature Market Institute in 2010 revealed that elder financial abuse rose 12% from 2008 and is continuing to rise by double digits. The study also confirmed that those most trusted by the elderly person accounted for 34% of the financial abuse, such as paid caregivers, friends, neighbors, and family members. Unfortunately, these statistics are far from being accurate, since the vast majority of cases are never reported. For example, Sandra Timmermann, an executive director for the institute, related that for every case actually reported, there were four or five that went unreported.
These egregious actions take many forms. Paid caregivers will sometimes take advantage of the declining mind of their patients by taking too much money for their services when it is offered or ask for additional money when they have already been paid. The family member who offers to take care of paying the bills for their elderly parent can become too tempted when they have check signing authority and credit or debit cards. All of a sudden, charges for restaurants, hotels, and airline tickets appear on the monthly statements, among other things, which go undetected by the elderly mother or father.
Other people in a position to take advantage of the elderly are investment advisors or financial planners who cause an elderly person to make poor investment decisions or estate planning decisions. In these instances, the investment choice is usually one that benefits the person giving the advice, rather than the client.
Finally, there are even alerts from the FBI about people who call on the elderly, identifying themselves as someone trying to help a grandson or granddaughter in need and asking for money to be wired to an account or particular place. The caller also asks that the grandparent not tell their mom or dad. This “grandparent scam” preys on the elderly by relying on their love and concern for grandchildren.
Here are a few suggestions to keep elder financial abuse from happening:
• Organize your affairs and have a successor trustee or durable power of attorney so that someone other than you has control over your finances, regardless of your age and mental state. If you have substantial assets ($500,000 in investments), consider naming an institutional trustee or power of attorney instead of relatives who might be tempted to help themselves.
• Have some form of checks and balances when there is more than one person who has total control of your finances. This is important for a couple of reasons. It can not only prevent fraud but it can be of benefit if one of the people with the power of attorney is unavailable or otherwise incapacitated from serving.
• Have duplicate financial statements sent to more than one person. This is easily accomplished by authorizing any financial institution to send copies to designated individuals, including your attorney.
Don’t wait until something bad happens to the ones you love. When making estate planning decisions for yourself or elderly parents, you need to seek the advice of a Wisconsin attorney who is skilled in all aspects of estate planning and probate matters.
Attorney Daniel J. Krause, with Krause Law Offices LLC, has provided estate planning advice to Madison, Wisconsin area residents for over a decade.
Contact us online for a consultation.