Frayda Bruton - Attorney at Law
Exploiting the Elderly: A Growing Form of Abuse

According to the National Center on Elder Abuse, as many as five million senior citizens fall prey to financial swindlers each year. Perhaps the most startling aspect of this statistic is the fact that the majority of this abuse is imposed by the victims' own families and caretakers.

Following is the story of an innocent senior who was duped by someone who claimed to care for her. The intent of sharing her saga is not to alarm you-although there is much to be said about the positive impact of shock value. More important, her story is being presented to alert you to just how cunning and conniving some people can be when they see an opportunity for financial gain-particularly at someone else's expense.

CARETAKER TURNED CON ARTIST

"Trust me. I'm doing this for your own good."

And with these words, the cycle of elder financial abuse begins.

Sarah was 85 when she lost her husband to cancer. Married at a young age, she remained completely dependent on him during the 64 years of their marriage. Not only was his job the couple's sole means of support, but he also took on the responsibility of paying all the bills, balancing the checkbook, and investing for their golden years.

The couple had no children, although they were rather close to one of their nieces. When Sarah's husband died, her dependency transferred to their long-time housekeeper, Julie, who willingly took on the role of Sarah's physical-and financial-caretaker.

At first, everything appeared to be running smoothly. Sarah seemed well-tended, and the trust that her husband had set up remained in order. But one day, Julie suggested that she and Sarah pay a visit to an attorney. Used to her dependent role and steeped in trust, Sarah complied. She never questioned the fact that this was not her family's attorney. As the weeks went by, she never asked for an explanation of why significant portions of her trust were being converted to annuities, with Julie as beneficiary. She never told her favorite niece what was going on, because she had no reason to be concerned. After all, Julie had worked for the family for 20 years. Of course she must have Sarah's best interests at heart.

Over time, as Sarah's health grew weaker, Julie's steps grew bolder. She talked often about the sacrifices she was making, and she spoke pitifully about how her own family life was suffering as a result of her commitment to Sarah. The older woman listened as Julie wove tall tales about how her husband was threatening to leave her because she spent so little time at home. (In truth, Julie's husband had left her years earlier-a fact she failed ever to mention.) A sympathetic person at heart, Sarah didn't hesitate when Julie prompted her to change her will and to deed her the house.

Within just a little over a year, Julie had managed to gain control of Sarah's entire estate. When Sarah died, the house was in Julie's name and she was the beneficiary on all investments. And no one in Sarah's family had a clue.

It wasn't until the attorney shared the details of Sarah's will that her niece discovered the series of events that Julie had masterminded. And by then, an enormous amount of damage-some salvageable, some not-had been done.

Several players in this scenario made critical mistakes:

  • Sarah's family attorney should have taken a more proactive role after Sarah's husband died. Given the trust and reliance that make up the attorney/client relationship, it is incumbent upon lawyers to be wary of major changes to estate planning documents following a trauma-such as the death of a spouse or a major illness.
  • The new attorney should have noticed a red flag when Julie so obviously manipulated Sarah's trust.
  • The insurance company that set up the annuities should have questioned Julie's role.
  • And Sarah's niece, although she was attentive on a personal level, should have been more involved in the financial aspects of her aunt's life.
While it is easy to look back and see where errors in judgment were made, it would have been just as easy to prevent Julie's manipulation by taking the following steps:
  • Name either a corporate fiduciary or a family member acceptable to all relevant parties to act as a fiduciary in the event of any cognitive disability or physical incapacity.
  • Provide a measure of checks and balances by designating someone else-a lawyer, an accountant, or a different family member-to have power of attorney and to receive routine account updates.
  • Instruct your financial institution to send copies of account statements and investment records to this third party.
  • Monitor all credit-card activity, and be on the lookout for questionable charges.
  • Have Social Security checks deposited directly into the bank.
  • Be wary if a family member who doesn't have close ties suddenly offers to assist with finances.
  • Consider developing a relationship with an elder-law attorney, who can help set up legal safeguards.
  • Share with a trusted friend any concerns you may have about possible exploitation. He/she just might have the perspective and objectivity you lack.

[SIDEBAR]

Signs That a Caretaker May Be Taking Over

Banking:

  • Large withdrawals are made over a short period of time.
  • Accounts are switched from one bank to another.
  • ATM activity occurs on the account of a homebound elder.
  • The address is changed on bank and/or credit card statements-featuring the elder's name, but the caretaker's address.
  • Signatures on checks and other documents do not match the elder's signature.
Personal:
  • The manner in which the elder person lives is not an accurate reflection of his or her estate-unpaid bills, insufficient food purchases, no new clothing.
  • The caregiver expresses concern only for the elder's financial status, disregarding physical and/or emotional needs.
  • Personal belongings-jewelry, furs, art-are missing.
  • Caregiver attempts to isolate the elder from family and friends.
  • Caregiver promises lifelong care if the elder person agrees to deed property and/or assign assets to him/her.