Financial Abuse of the Elderly

Courtesy Holmgren Law, Salt Lake City LIVING WELL Magazine

Financial abuse of the elderly is on the rise. A recent report[1] highlights the following findings:

• Fraud perpetrated by strangers comprised 51% of the total instances of elder financial abuse, followed by family, friends and neighbors (34%), and the business sector (12%).
• Women were twice as likely as men to be victims of financial abuse with most being between the ages of 80 and 89, living alone and requiring some level of help with either health care or home maintenance.
• The annual financial loss by victims of financial abuse of the elderly is estimated to be at least $2.9 billion, a 12% increase from the $2.6 billion estimated in 2008.

While these findings are troubling, financial abuse is preventable. If you know someone who ought to be cautioned about this, please share this article.

As individuals age, they become more susceptible to undue influence, coercion or duress.  Perhaps they depend upon someone for care––or companionship––and are afraid they will lose that if they don’t agree to certain financial requests. Maybe they don’t want to appear unknowledgeable when presented with an investment “opportunity,”  so they agree to invest because the promoter “seems” honest. Sometimes a parent will put a child’s name on a real estate property or financial account because it seems that the child will be able to help pay bills when the parent starts to “slip a little” mentally. These are all very dangerous scenarios where a senior can be duped out of their money or where their assets can get tangled up in their children’s legal problems (e.g., divorces, creditor claims, lawsuits and bankruptcies).

Most of the time, children don’t necessarily mean to harm their parent, but when they get sued following an auto accident, or default on a loan or contract, their creditors are able to attach all assets titled in their name––including a parent’s assets that are owned jointly. That is the “trouble with joint tenancy.”

A Living Trust is a powerful solution to these problems. It allows individuals to keep assets titled in their name, allows a trusted person to help manage finances and bill paying, and avoid probate court when the individual passes away. Sometimes, a Living Trust needs to be “fortified” so that there are safeguards or “checks and balances” in place so the trustee does not have unfettered access to assets whereby he or she can take advantage of those assets if he or she has personal or other financial problems.

Ways to prevent financial abuse is something that I’m available to discuss with you. To arrange a complimentary consultation, contact my office at 801-534-7228. We can discuss your personal situation and I will make recommendations to give you the peace of mind, and safety, of not having your assets subjected to unnecessary risks.

Randall J Holmgren is a senior estate-planning attorney at the Salt Lake City law firm, Jones Waldo. He has 28 years of experience as an attorney.  He is a member of the American Academy of Estate Planning Attorneys.