The financial abuse and exploitation of people over 60 is becoming an epidemic. According to the Federal Trade Commission, fraud complaints by seniors grew by over 150% from 2008 to 2012. The Investor Protection Trust reports that 20% of those over 65 have been financially abused and Met Life reports that financial abuse cost seniors at least $2.9 billion in 2010, an increase of 12% in just two years. And the problem isn’t simply explained as a function of dementia. Seniors have become tempting targets of fraudsters for many reasons. These reasons include the growing inability to recognize fraud as we age, and the unwillingness to report it for fear that it may lead to the loss of independence if their families find out. The fraud and exploitation is often perpetrated by those closest to seniors, including family members and care givers. This often leaves the victims feeling it is hopeless to report the offense.
I’ve seen numerous examples over my years of practice. Several years ago I received a call from a client’s daughter. She asked me to meet with her and her mother (we’ll call her Jean) for coffee. In her early 70s, Jean had recently remarried a widower and was terribly frightened. Jean admitted to me that her new husband had told her that he would push her down the stairs if she didn’t give him control of her finances, and sign a new will cutting out her children and naming him and his children as beneficiaries. He refused to let Jean’s children see her or to visit with her by phone. He refused to let Jean talk with her doctor without him being present. Jean was only able to meet with me because her husband was working a part time job that morning. Jean’s husband ultimately forced her to sign new estate planning documents without an opportunity to read what she was signing. With the complicity of his attorney, he forced Jean to appoint him as her agent in her power of attorney, and her health care power of attorney. Jean refused to divorce him out of fear she would be alone and have no one to care for her. Jean began losing her competency, in part due to the stress of her situation. After more than five years of litigation we were able to solve Jean’s problems, but unfortunately Jean died shortly thereafter.
Our advice to clients is to make sure that they have family or friends watching for warning signs of fraud or exploitation: changes in their loved one’s or friend’s moods and behavior, large withdrawals from their accounts, not taking calls or visits from friends and relatives, not keeping appointments with doctors and others, not attending church, ordering home improvements and purchases that seem unnecessary and out of character, family members in need of money visiting often or suggesting that they become a paid caregiver, changes in their estate plan naming people other than family members as beneficiaries, and so on. Also, clients need to make sure they: have retained attorneys, accountants, investment managers, and financial planners who are checking regularly on their clients; they have appointed trustworthy agents under their powers of attorney and other estate planning documents, and put in place estate and financial plans with controls that will trigger alarms when changes occur.
Feel free to contact me regarding any questions involving senior fraud and exploitation and for transition planning or for or any other issues regarding your estate plan or other legal issues.