LEGALLY
Speaking
Elder Financial Abuse
By Jim Ward
“ It ’ s not estate improvising ; it ’ s estate planning .”
Jim Ward is a long-time Gilroy resident who raised both of his children in Gilroy and was active in the community for years . He left us for several years while he went to law school in New England and then obtained a graduate law degree in Estate Planning at the University of Miami . Jim worked as an estate planning and elder law attorney in Florida , and recently returned to Gilroy to open his own law firm focusing on both estate planning and elder law .
Do you know a victim of elder financial abuse ?
Scams and scammers have been around for generations , but they seem to be more common these days and they seem to target seniors more often . The unwillingness of scammed people to report their loss or admit that they ’ ve been taken advantage of allows much of the abuse to go unreported .
The myth of the underground scammer
It ’ s easy to think that financial predators keep a low profile , but they ’ re often putting ads in print , on the radio , and on the Internet . California recently sentenced two people to prison for fraud against elders . One was sentenced to over 12 years and their partner was sentenced to 18 years . The two were ordered to pay $ 8 million in restitution to the victims , but the scammers claim to be destitute .
These con artists weren ’ t hiding . They were heavy advertisers who hosted their own financial radio program . They did many things that legitimate professionals do , and that ’ s often what makes the scammers so hard to spot . Often only an expert can tell the difference between a professional and a scammer .
What ’ s the profile of an investment fraud victim ?
The Financial Industry Regulatory Authority ( FINRA ) and AARP did a joint study and determined that investment fraud victims tend to be college-educated , married males between the ages of 55 and 65 . That ’ s a surprise to many people . But there ’ s more than just investment fraud to watch for . Fraud can take the form of telephone or mail solicitation , and even door to door solicitations .
When it comes to seniors , the FBI warns that “ people who grew up in the 1930s , 1940s , and 1950s were generally raised to be polite and trusting . Con artists exploit these traits .”
It isn ’ t uncommon to hear of seniors who have been tricked out of $ 40,000 or $ 80,000 or even their entire life savings . Much of the fraud goes unreported because seniors are too embarrassed to let their friends and family know that they were conned , but seniors have been conned into sending thousands of dollars of cash through FedEx envelopes , and con artists working from other countries have used the telephone to talk seniors through the complex paperwork of wiring large sums of money directly overseas to the scammers .
Why are seniors often the victims ?
Besides the fact that seniors tend to be more trusting in general , we know that our brains often slow down a bit as we age , and we know from studies that people ’ s math skills generally start to decline after age 70 . From the cases that I ’ ve read , the victims are often single individuals who live alone , and that means that there isn ’ t someone with them to be watching what goes on and questioning what they ’ re doing .
One of my clients with substantial assets was recently conned out of $ 400 from a stranger who appeared at her doorstep . Once she realized what had happened , she made a decision to get her adult daughter more involved to protect herself from having it happen again .
What can seniors do ?
Seniors need to have their independence and don ’ t want to have to ask their adult children for permission to spend their own money , but elder law attorneys often establish protection trusts where the senior gives up a substantial amount of control in order to ultimately protect the bulk of their wealth . This requires that the senior have a “ trusted person ” who can be named as trustee . We often name one or more of the adult children for this role , but if the senior can ’ t fully trust their children , we have to search for an alternative solution .
I often design Medi-Cal asset protection trusts to protect a senior ’ s assets . These trusts have the added protection of keeping the assets out of reach of people trying to scam seniors . We look for a balance between independence for the senior and protection of the assets . Once the senior and the rest of the family realizes what can be done , and how we can set the rules , things normally come together nicely to provide the senior and their loved ones with greater peace of mind .
NOTE : In the last issue , I wrote about “ The Power of the Power of Attorney .” I recently attended an elder law class in San Diego where the well-known key speaker estimated that 70 to 90 % of all existing Power of Attorney documents do not meet the potential needs of the person who established the document . Don ’ t let that happen to you . Get your Durable Power of Attorney reviewed and updated by someone who understands elder law and long-term needs and risks .
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