Make Plans to Plan for Your Family, Part Two

Jack Gaffigan and Sandie Doptis, Badge of Honor Memorial Foundation

In part one of this article, we looked at how important it is for everyone to have their family information in order. We produced a “Family Assistance Planning Guide” to be a single source document for a family to store all needed information. With this guide, either spouse or someone designated as a trustee can step in with a working knowledge of where everything is, what bills need to be paid, what insurance policies are available, etc.

In addition to taking the first steps of preparing a will, and organizing a “Family Assistance Planning Guide,” it is also important that we protect the ones we love by looking after them as they age.

The Baby Boomer Generation is aging. As a proud member of that generation, I can still remember thinking that I was invincible and that old people were my parents or anyone over the age of thirty. Now I have become a member of the “long past thirty club,” I am seeing relatives, friends, and co-workers dying or becoming incapacitated mentally or physically.

During my long police career, I saw victims of elder abuse and people being scammed by con artists and others who looked on the elderly as easy marks. It wasn’t until my generation started becoming the victims of these types of crimes that I came to realize how often this type of crime occurs and how vulnerable the elderly can be.

Elder abuse cases are on the rise due to our aging population and the poor economy. By the year 2030, there will be over 70 million people in the United States over the age of 65. Many older adults suffer from mental and physical impairments such as Alzheimer’s disease and mobility issues that make them easy prey. It is estimated that 10 million baby boomers will develop some form of dementia in their lifetime.

Elder abuse comes in many forms and covers all geographic and socio-economic boundaries. For purposes of this article, we will confine our discussion to physical, abuse, financial abuse and fraud.

A report from the Met Life Mature Market Institute entitled “The Met Life Study of Elder Financial Abuse: Crimes of Occasion, Desperation, and Predation Against America’s Elders” released in June 2011 shines a bright light on this problem which is only going to continue to grow larger as the number of baby boomers reaching retirement age continues to increase.

Some of the key findings of this report are:

• The annual financial loss by victims of elder financial abuse is estimated to be at least $2.9 billion dollars, a 12% increase from the $2.6 billion estimated in 2008.
• Instances of fraud perpetrated by strangers comprised 51% of the articles. Reports of elder financial abuse by family, friends, and neighbors came in second, with 34% followed by reports of exploitation within the business sector.
• Women were nearly twice as likely to be victims of elder financial abuse as men. Most victims were between the ages of 80 and 89, lived alone and required some level of help with either health care or home maintenance.
• Nearly 60% of the perpetrators were males.
• Dollar losses over the holidays due to family, friend, and neighbor perpetrators were overall higher than any other category.
• In almost all instances reported, the goals of financial abuse perpetrators were achieved through deceit, threats, and emotional manipulation of the elderly. In addition, physical and sexual violence frequently occurred.
• Elder financial abuse appears to fall into three types of crimes: occasion, desperation and predation. Crimes of occasion or opportunity are incidents of financial abuse or exploitation that occur because the victim is merely in the way of what the perpetrator wants. Crimes of desperation are typically those in which family members or friends become so desperate for money that they will do whatever it takes to get it. Many of these family members are dependent on the elder relative for housing and money. Finally, crimes of predation or occupation occur when trust is engendered for the specific intention of financial abuse later. A relationship is built, either through a bond of trust created through developing a relationship (romantic or otherwise) or as a trusted professional advisor, and then used to financially exploit the victim

The final paragraph of the Executive Summary of this report sums it up best. “Elder financial abuse continues to decimate incomes, both great and small, engenders health care inequities, fractures families, reduces available health care options, and increases rates of mental health issues among elders. Elder financial abuse invariably results in losses of human rights and dignity. Despite growing public awareness from a parade of high-profile financial abuse victims, it remains underreported, under-recognized, and under-prosecuted.”

As you can see from the summary of this report, elder financial abuse is a major problem in this country. Unfortunately, many people are not aware that it is happening until the damage is done and in many instances, the perpetrator is long gone.

What we need to do is to take steps to prevent this from happening. We will discuss those steps later in this article. Right now, we need to be aware of warning signs that things may be amiss. These would include:

• Sudden bank account changes, especially an unexplained withdrawal of large sums of money when accompanied by other withdrawals
• Increased activity on a credit card
• Additional unexplained names on an elderly relative’s bank signature card
• Disappearance of funds or valuable possessions
• Changes in account beneficiaries
• Changes in property title, quitclaim deed, or new or refinanced mortgage
• Sudden transfer of assets or changes in a will
• Activity inconsistent with elder’s ability, such as ATM use by a physically impaired person
• Recent changes in Power of Attorney or Durable Power of Attorney
• Recent change in Will or Trust when the elder is clearly incapable of making such a change
• Recent change in Will or Trust to favor a new or much younger “friend”
• A family member now reluctant to discuss matters that were once routine
• A caregiver who seems overly concerned about the elder’s finances
• A caregiver who often speaks for the elder, even when the elder is present

Unfortunately, there is no golden rule as to who may be abusing your parent or other family member. Sadly, perpetrators of financial and even physical abuse are often the elderly person’s own relatives or caregivers.

A new creative form of abuse is occurring when a caregiver secretly marries their elderly charge. There have been numerous lawsuits over cases in which a caregiver married a mentally incapacitated older patient and the patient’s family didn’t learn about it until after the patient had died. Once a person is dead, it is too late. In all but three states, you can’t void a marriage if one spouse has died. If you discover that they have married, act quickly to get it annulled.

After death, heirs can sue to recover money from the “spouse,” but it may be more difficult than if the marriage is dissolved while your parent or other loved one is still alive.

Another scam that has been around for years is one involving obituary notices. An obituary not only notifies everyone that someone near and dear has died, but it also lets people know exactly when no one will be at home. The obituary also informs those with ill intentions that someone may be coming into some money (i.e., insurance or inheritance) at a time when their defenses are down. One other thing that appears in an obituary is the wife or parent’s maiden name. How many times is a wife or mother’s maiden name used as a security question to access a financial account? Other scams involving obituaries may include having merchandise or other items arrive, COD, supposedly ordered by the deceased. Unusual bills arriving shortly after a death, or phone or home solicitations by people who have an investment deal, are indications of another scam.

In these difficult economic times, we are seeing more and more people looking to take advantage of our elderly. More often than not, it will be strangers but be aware in some instances it could be other family members.

As children, we have an image of our parent as the person we turned to throughout life to solve the problems of the world. Our parents raised us and as adults, we continue to look at them in the same manner that we did when we were children. For this reason, it can sometimes be difficult for us to recognize symptoms and clues that will indicate that a parent needs assistance. It is important to be alert for signs of deterioration in your parent’s physical and mental well-being.

How does one go about preventing various forms of elder abuse? Well, the bad news is that no one is completely immune from becoming a victim. Scam artist are constantly practicing and refining their trade. All we can do is try our best to protect our loved ones from becoming victims. The most important thing we can do is to stay in frequent contact with our elderly relatives and keep lines of communication open. Encourage them to stay active and to socialize with family and friends. At all cost, help them to avoid isolation as this can lead to loneliness and depression.

Other steps to help protect your parent or other loved one from becoming a victim of financial abuse would include:

• Have an irrevocable trust along with a durable power of attorney. Review all legal documents at least once a year.
• Have a duplicate copy of their banking account statements sent to several trusted family members. An independent pair of eyes that is able to review bank statements each month will be able to catch suspicious activities in the early stages and act on it.
• Choose a caregiver carefully. Never select one through an ad. Use a licensed, bonded agency. Check to make sure the caregiver is not a convicted felon.
• Keep a photographic inventory of all jewelry or anything else of value.
• Use a crisscross shredder on any paperwork containing information such as Social Security numbers or bank statements.
• Protect incoming and outgoing mail.
• Obtain a credit search on your parents several times a year.
• Have Caller ID on the phone. Instruct your parents not to answer “unknown” or “out of area” calls.
• Subscribe to national and state Do Not Call lists.
• Instruct them not to attend the so-called “free lunch or dinners” offered by firms selling investment advice or supplemental care. Nothing is free.
• Have a second line of defense at their front door (a peephole or locked screen door).

When you are taking these steps to assist your parents, you should also be aware that the same advice applies to you. It is never too early to start preparing for the time when you and your spouse are older and will need your children to look after and help protect you.

Financial abuse can rob your parent or other loved one of self-esteem and trust, as well as their means of subsistence.