The problem of elder financial abuse has been widely reported – in fact, we’ve published several articles about this tragic topic right here on our AgingOptions blog. Often the articles that warn about those who take advantage of seniors seem to concentrate on strangers – the scam artists on the phone or the bogus general contractor standing in the doorway. But while it’s true that these fraudsters do pose a risk to unsuspecting seniors, a significant amount of fraud and abuse – perhaps even the majority – is perpetrated not by strangers but by people well known to the victim.
As this article from USNews put it, “Financial abuse, also known as economic abuse, is a growing problem in America – and the perpetrators might be closer than you think.” The real danger of senior fraud often comes from trusted friends and family members.
The headline on the USNews article warns readers to “Beware Elder Abuse in the Family.” The data, says USNews, should concern us all. According to the National Council on Aging, at least 10 percent of Americans age 60 and older have fallen victim to some form of financial abuse, with estimates that as many as 5 million elders are victimized every year. But because so much of this kind of fraud and abuse goes unreported, it’s hard to gauge the true cost: a 2011 MetLife survey pegged the annual amount of elder fraud at about $3 billion, but a 2015 study by the financial services firm True Link came up with an estimate more than 10 times that high.
According to USNews, what makes this epidemic doubly hard to solve is that the source of all that fraud, coercion, deception and manipulation perpetrated on seniors often lies with people they trust. In the study cited above, MetLife estimated that at least one-third of incidents of financial fraud against the elderly were perpetrated by family, friends, neighbors or caregivers. The National Center on Elder Abuse quotes an even more damning set of statistics: they claim that about 58 percent of abuse cases involve family members, with another third divided between home care aides, friends and neighbors.
A financial planner from Pittsburgh had first-hand experience when one of her clients suffered financial abuse from an expected source. “It’s people who are close to you, family or friends, someone you know and trust, who take advantage,” she told USNews. According to the article, “the client had lost her ability to write checks and needed assistance managing bank accounts. Her husband had passed away, and she had no children, so she turned to her friend for help.” But the behavior of this so-called trusted friend which at first seemed normal turned out just the opposite. “It wasn’t until the friend asked her to change the beneficiaries on her will that she suspected anything was amiss,” the article says. This “very trusted friend who was helping was actually stealing from her, and writing herself checks.”
Another instance of elder financial abuse reported in USNews was less deceptive but just as damaging. In this case, the victim’s son “essentially bullied her out of her pension,” the article says. This single mother had retired at about age 70, at which time she took a lump-sum payment on her pension. Somehow this woman’s son “convinced her to use the money to buy him and his wife a house, new furniture, a car and more.” Eventually this “overly generous” woman ended up having to go back to work for ten more years in order to meet her own needs. Clearly, as the USNews article is quick to point out, not every request by a child for financial help from parents constitutes abuse or manipulation, but this case was extreme. “It becomes abusive,” says USNews, “when the adult child requests or demands money without considering the impact this could have on the parent. Some parents want so much to give, they’d give their last dollar to their child. So adult children need to be aware and think before asking.”
If you’re a senior concerned about protecting your assets, or if you have a senior loved one that you fear may be vulnerable to manipulation, it’s vital to put some real protection in place early on. This needs to be done while the senior is of sound mind, because things can get really complicated when the senior begins experiencing cognitive decline. The USNews article recommends that all seniors prepare well-crafted plan for their future, which is something we agree with. USNews refers to this as a “financial plan,” but we take issue with that term, because finances are only one aspect of the kind of protective planning that will truly protect a retiree’s interests. A thorough plan also needs to include housing wishes and medical preferences, and should be backed up with a carefully crafted legal framework. USNews also adds that a senior needs the right team of advocates on their side to make sure the plan is honored. “You should also have a team in place that knows your plan and can be trusted to play their roles in following it,” says the article. “Keeping multiple people – whether they’re your adult children, other relatives and friends or financial professionals – apprised of your plans allows for a system of checks and balances.”
(The USNews article provides some helpful resources for seniors and their families who are concerned about abuse. There’s the Eldercare Locator helpline at 1-800-677-1116, and the VictimConnect hotline at 1-855-4VICTIM. There’s also a website operated by the Department of Justice specifically designed to assist victims of elder abuse, called the Elder Justice Initiative.)
Does all this talk about planning for the future cause you to stop and think about your own situation? If you’re ready to set in place a retirement plan of your own, we at AgingOptions want to help you. We offer a unique plan called a LifePlan that encompasses all the elements described above – financial, legal, medical and housing – and also helps ensure that your family support group is aware of and supportive of your wishes. We invite you to make plans now to join Rajiv Nagaich at one of our free AgingOptions LifePlanning Seminars. You’ll be very glad you did! For details and online registration, click here – or if we can help answer any questions by phone, give us a call.
(originally reported at www.usnews.com)
