Elder Financial Abuse

by Lindsay Guido, CFP^®

Taylor Swift’s lyrics rang out over more than 50,000 screaming fans during each of her Chicago concert performances of “Anti-Hero” this summer. Her Eras Tour is projected to earn a record-setting $1 billion in sales as the highest-grossing tour of all time.

The lyrics to this song were inspired by Swift’s nightmares, which apparently include being the victim of elder financial abuse (despite not having children). Taylor Swift may not yet have to concern herself with inheritance intrigue, though many may recognize this sentiment as more than the clichéd plot of a mystery novel.

Famous individuals including Brooke Astor, Mickey Rooney, and Marvel Comic’s Stan Lee all made headlines for being victims of elder abuse in the last years of their lives, proving these troubling realities don’t discriminate even among those with wealth and status. For this reason, every family should prioritize educating themselves about the risks of elder abuse, and wealthy families should be particularly vigilant.

Elder financial abuse occurs when someone takes advantage of an older person for financial gain. It can be harder to spot than other types of elder abuse as it may not physically affect the victim and can go on for years before it is finally caught. It also remains an under-reported crime due to the shame or embarrassment that victims often feel. While we typically think of abuse as physical or emotional, financial abuse is an increasingly common event that can result in devastating consequences for individuals and families.

Those at Risk and Bad Actors

A confluence of factors has led to an increase of abuse including the significant amount of wealth that retirees now control. Moreover, the investment industry’s trend away from corporate pensions and toward self-directed retirement accounts has left more retirees responsible for their own investment decisions, which is both good and bad.

As people age, they may need the help of others to manage their finances in addition to general care. While anyone can be a victim of financial abuse, seniors are frequently more vulnerable to exploitation, particularly those who are isolated or suffer from frailty issues. Also, people who struggle with new technologies may be less able to spot online fraud or phishing scams.

Many of us have the presence of mind to greet strangers and potential impersonators with suspicion. But sadly, the perpetrators of elder financial abuse are often those closest to the victim, who enjoy a trusting relationship and access to important documents and assets. This may include family members, friends, caregivers, lawyers and financial professionals, or even romantic partners.

Stan Lee was victimized by business associates, and Mickey Rooney by his stepchildren. Other heartbreaking cases such as Peter Falk (TV’s “Columbo”) and Casey Kasem (radio DJ host of “American Top 40”) involved their spouses.

Prevention Tips for Seniors

Seniors, along with the help of their loved ones, can protect themselves in a number of ways:

• Build relationships with trusted professionals and make them allies in protecting your wishes and identifying suspicious behavior. Accountants, attorneys, bankers, financial professionals, and doctors are well versed in elder protection and can make recommendations for each individual’s situation.

• Maintain an awareness of guests and workers allowed into your home. Be sure to check references and require background checks for new hires. Secure checkbooks, statements, valuables, and any other sensitive information (or use a safety deposit box) when others are in your home and don’t allow nonfinancial workers access to your financial information.

• Monitor your assets and account transaction activities. Make payments with credit cards and checks instead of cash to maintain a paper trail. Shred receipts, old financial statements, and unused credit card offers.

• Beware of scams and never pay a fee or taxes to collect supposed sweepstakes or lottery winnings.  Bad actors also may approach online or in person, and it’s good to remember that if it sounds too good to be true, it probably is.

The key to spotting red flags lies in an established understanding of existing financial patterns. Family and friends can help by being involved with caregivers and other service providers. They can look out for unusual activity such as new parties involving themselves with banking or other financial transactions.

When elder financial abuse or fraud is suspected, it should be reported to a trusted contact and professionals who can help. This may include law enforcement, doctors, attorneys, banks/credit unions, Adult Protective Services (APS), or staff ombudsmen at long-term care and nursing facilities.

Real change can happen through the actions of caring individuals like Brooke Astor’s grandson, who founded an organization for senior empowerment and elder-abuse education, and “Peter Falk’s Law,” which provides protection for wrongful isolation from family.

Family Priorities

Wealthy families often have two primary interests: Maximizing the value of family assets, and efficiently passing them from generation to generation through investment, financial planning, and tax/estate planning. Conifer Bay Capital has resources in this area and can offer support.

To achieve these goals, commit yourself to increasing defenses against elder abuse and be prepared if it occurs. Embracing family governance in this way can set an important example for heirs and help to prepare future generations to inherit wealth and manage it wisely through financial literacy, shared history and values, philanthropy, and an all-important education in the defense against financial fraud and abuse.

Standing in opposition to the squabbling heirs shown in Taylor Swift’s “Anti-Hero” video, we can channel a more ethical and optimistic theme from her song “Karma” in which she makes a familiar nod to an ideology that we reap what we sow when it comes to our actions toward others. Strong and loving relationships with trusted friends and family are our best protection against life’s challenges and we help ourselves by helping others. So, for all the Swifties out there, remember to “keep (your) side of the street clean.”

August 22, 2023