Paul O. Dillon, Attorney at Law

Financial Elder Abuse Is Growing

Financial elder abuse is defined as the “fraudulent or otherwise illegal, unauthorized or improper act or process of an individual, including a caregiver or fiduciary, that uses the resources of an older individual for monetary or personal benefit, profit or gain, that results in depriving an older individual of rightful access to, or use of, benefits, resources, belongings or assets.” That’s from The Older Americans Act of 2006.

Consumers Digest estimates that there are at least five million cases of financial elder abuse in America every year. An article titled “Population ages, financial abuse rises” from the Reading Eagle wisely notes that seniors are not just being targeted, they are the bull’s eye.

One of the reasons is because many older Americans live in isolation. A person who spends most of their time alone will welcome any simple human interaction, including talking to anyone who calls on the phone, unknown neighbors introducing themselves, marketing mail or interactions on the internet. This desire for company makes seniors more likely to ignore warning signs and to hand over money and control of their assets.

Do you wonder what kind of person would hand over their power of attorney to a stranger? The plain truth is that most financial elder abuse is committed by people who are closest to the senior. Family members are far more likely to prey on seniors than a stranger.

One financial advisor notes an instance where a scammer forged a check for $25,000 in a senior’s name, then kept doing it until she had stolen up to $75,000. She did it repeatedly, because she knew that she could get away with it.

The key to prevention is planning. First, seniors should simplify their financial and legal matters. Surrounding yourself with trusted advisors and family members who serve as checks and balances for each other is a good idea. It’s sometimes hard to know who to trust sometimes, especially family members. An estate planning attorney should be part of your team, and everyone should work together.

If you become suspicious that financial fraud is happening to you or a loved one, you may want to reach out to the Adult Protective Services office in your community. They will be able to advocate on behalf of the senior.

Treat everything and everyone with a degree of suspicion. If someone knocks on the front door and says they can offer you a discount on tree removal or roof repair because they are in the neighborhood, don’t believe them. You should also have an estate plan in place that protects your assets, so they are less vulnerable to a scammer.

Reference: Reading Eagle (Feb. 9, 2020) “Population ages, financial abuse rises”

Is It a Call from Social Security or a Scam?

If you get a call allegedly from the Social Security Administration, the chances are good that it’s a scam. Prior to disclosing any information or money, there are some steps you want to take.

CNBC’s recent article entitled “Social Security scams have caused millions of dollars in losses in 2019 alone. How you can avoid becoming a victim” explains that it’s common for an unknown caller to say that your Social Security number has been suspended or canceled.

This is the latest version of a robocall scam that the IRS warned people about in early 2019.

Other criminals attempt to convince people to pay up with cash or gift cards, in order to avoid getting arrested.

In the first six months of 2019, people filed 73,000 reports about Social Security fraud, according to the Federal Trade Commission. The losses from these calls was more than $17 million.

However, Congress is trying to stop these practices.

The House of Representatives passed a bill in early December to restrict robocalls by requiring carriers to block the numbers, without charging consumers extra money. The Senate passed a similar bill earlier this year.

Several lawmakers also asked the Social Security Administration to review scam calls purporting to come from the agency.

“While SSA has taken steps in recent months to prevent and raise public awareness about these imposter calls, we are alarmed that the scams continue to be widespread and severe,” the congressmen wrote in a letter to Andrew Saul, commissioner of the Social Security Administration.

The Social Security Administration also won’t send you an email with a “click here” link.

It is important to limit when you give out your Social Security number. You should think twice before revealing that information on healthcare forms, for example, where that information is usually unnecessary.

Reference: CNBC (Dec. 16, 2019) “Social Security scams have caused millions of dollars in losses in 2019 alone. How you can avoid becoming a victim”

How Do I Protect My Elderly Parent from Scams?

According to a 2015 study by True Link Financial, seniors lose $36.48 billion each year to elder financial abuse. The FINRA Investor Education Foundation reports that more than 8 in 10 seniors are solicited for potentially fraudulent offers, adding that “Americans age 65 and older are more likely to be targeted and 34% more likely to lose money once targeted than respondents in their 40s.”

Kiplinger’s recent article, “Defrauding the Elderly: Watch for These Danger Signs,” explains that advancing age can have some impact on an individual’s emotional and physical health that may lower their defenses against abuse and fraud. Let’s look at some common frauds.

Wire transfer scams: A retired 80-year-old businessman contacted by fraudsters who said they wanted to do business with him. He wired them $400,000, and when he found out he’d been defrauded, he complained to the scammers. They had him contact some new crooks who said they could get his money back if he would wire them $400,000—which he did.

Gift card scams: These can be used to launder money, without even having to physically send the cards anywhere. A scammer convinces the elderly victim to get several cards and load them with money. They then have the victim scratch off a protective strip on the back of the card to reveal its code number, take a picture of the number and then text the picture to a cellphone number.

Computer-hacking scams: A common scam designed to victimize seniors is a contact from someone who says they’re a Microsoft employee. The scammer says the senior’s computer has a virus or some other problem, which they’re happy to fix. The senior just has to click on an email link or download an attachment the rep sends them and pay a fee. The scammer thus gets control of the victim’s computer.

Door-to-door scams: A scammer knocks on a senior’s door and says her trees need to be trimmed or gutters need to be cleaned. There are numerous cases where seniors have paid upwards of $30,000 to trim the hedges at their house. There are no service rendered: the crooks just wait and reappear to help the elderly person write a check for their services.

Family member financial abuse: Financial fraud in a family can be hard to resolve. It’s hard to know if an elderly parent voluntarily gives gifts to a family member, or if fraud is involved.

Prevention is always the best course of action, so speak to your elderly parents or grandparents about scams.

Reference: Kiplinger (October 24, 2019) “Defrauding the Elderly: Watch for These Danger Signs”

Should I Add My Elderly Dad as a Co-owner of My Checking Account?

There are several issues to consider when you add an elderly parent as a co-owner of your checking account, says nj.com in its recent article, “Is having a joint bank account with my father going to cause any problems?”

The father is still a named joint holder of the account, so he can withdraw some or all of the funds in the checking account at any time. As a result, the transfer is neither a completed gift nor a payment from the father to the adult son, until the son withdraws funds.

If the elderly father predeceases the adult son, the checking account would be included in his taxable estate. There may be taxes due on the estate, depending on the size of the estate and the state in which he lives, since some states have their own estate taxes at much lower levels than the federal thresholds. In New Jersey, there is a procedure where a tax waiver would need to be obtained to release the funds to the son in this case.

If the adult son dies before his father, the checking account funds would automatically pass to the father by operation of law, and not pursuant to the terms of the son’s will, nor to his children or spouse.

In light of the fact that the father can withdraw the funds during his lifetime as a joint holder of the account, those funds in the checking account are subject to him being a victim to scams.

To safeguard these funds, the adult son should take the time to properly title the checking account. If the transfer of funds was a gift to the son in excess of $15,000, the father would also need to file a Form 709, U.S. Gift and Generation-Skipping Transfer Tax Return, even if no tax is due because the federal gift and estate tax exemption is at $11.4 million per person.

If the transfer was made by the father to qualify for Medicaid, it is important to understand that the Medicaid five-year look-back period and penalty could be an issue. The look back is from the time of the application. Any gifts or transfers made within this period, are subject to a penalty, that is equal to a period for which Medicaid benefits are denied. Since the transfer isn’t complete until the son removes his father’s name from the account, for purposes of Medicaid qualification, it would be best to remove the father’s name ASAP.

A joint account may also be subject to legal judgments, collections and other debt collection efforts.

Reference: nj.com (September 25, 2019) “Is having a joint bank account with my father going to cause any problems?”

What is Florida Doing to Protect Seniors from Exploitative or Neglectful Guardians?

Orlando Sentinel’s recent article, “DeSantis, Florida lawmakers consider changes in troubled guardianship program,” reports that legislative leaders and officials of Governor Ron DeSantis’ administration met with judges, guardianship trade groups, state attorneys and people from the Elder Law section of the Florida Bar to talk about ways to protect seniors from exploitative or neglectful guardians.

“More must be done to enhance the structure of accountability for guardians to monitor compliance with established standards of practice and ensure that guardians are acting in the best interests of their wards,” Department of Elder Affairs Secretary Richard Prudom said. “The matter is complex, and the solution extends beyond the Department of Elder Affairs; families, local communities, and public officials must also work together to prevent all forms of exploitation to provide safety and security for all.”

The recent news concerning guardian Rebecca Fierle, who investigators say was responsible for more than 400 wards and regularly signed “Do Not Resuscitate” orders for clients against their wishes, has rekindled interest among lawmakers for more control over Florida’s 550 registered guardians.

Senator Kathleen Passidomo and Representative Colleen Burton participated in the meeting and said some of the ideas being discussed include limiting the number of cases each guardian has and requiring a judge to approve a DNR order. Other ideas include increased standards for guardians and more thorough monitoring.

The lawmakers say there’s no need to increase the requirements to become a guardian. All that is required now is a 40-hour course and passing an exam. Passidomo said the issue isn’t a lack of competence, but the risk for abuse.

As a result, standards and monitoring of guardians must be increased. However, these ideas are merely being discussed, as lawmakers have yet to present a concrete plan.

Governor DeSantis will publish a budget request for the Department of Elder Affairs, which includes the Office of Public and Professional Guardians, which could include more funds for investigators to review complaints. The OPPG has only four employees. Prudom has taken control of the department since July, when he asked Carol Berkowitz, the agency’s executive director, to resign because of the Fierle case.

Reference: Orlando Sentinel (September 16, 2019) “DeSantis, Florida lawmakers consider changes in troubled guardianship program”

Arizona Passes Financial Exploitation Legislation

The Queen Creek Independent reports in the article “New Arizona law helps protect vulnerable adults, seniors from financial exploitation” that Senate Bill 1483 went into effect at the end of August.

The new law lets securities dealers and investment advisory firms report suspected or attempted financial exploitation of a vulnerable adult and delay a questionable disbursement or transaction.

The new law lets these financial firms impose an initial delay of disbursements from an eligible adult’s account for up to fifteen business days, if financial exploitation is suspected.

The firms must report the delay within two business days to the Commission or the Department of Economic Security—Adult Protective Services. The government can then extend the delay for an additional ten days or longer.

If additional delay is required, a judge can extend the time even further.

It’s important to note that the law provides immunity from administrative or civil liability to qualified individuals for taking preventative actions that are permitted under the law.

The 2010 Investor Protection Trust Elder Fraud Survey reports that one out of every five citizens over the age of 65 has been a victim of financial fraud.

Arizona’s new law aims to help protect individuals who are over 65 years old or who are unable to protect themselves from abuse, neglect, or exploitation by others, due to a physical or mental impairment.

“Protecting senior investors has long been a top priority for the Corporation Commission,” Arizona Corporation Commission Chairman Bob Burns said in a news release.

“Early detection and reporting of financial exploitation are critical to help prevent elder financial abuse and the devastating financial and emotional impacts that ensue.”

Reference: Queen Creek Independent (September 16, 2019) “New Arizona law helps protect vulnerable adults, seniors from financial exploitation”

What is Michigan Doing to Combat Elder Abuse?

The Michigan uniform investigative and reporting form will be sent to police departments by state law enforcement associations. They will also receive a list of best practices for elder abuse investigations and videos to assist in training on those best practices, according to The Detroit News’ recent article, “Mich. task force rolls out new elder abuse reporting form.”

“People are not getting caught and this is one of the reasons,” Attorney General Dana Nessel said at a press conference announcing the initiative Tuesday. The model’s development is part of the ongoing work of the Elder Abuse Task Force established this year.

The Attorney General remarked that the form will bring some clarity to what can be, a complicated investigation. Law enforcement must look for signs of physical abuse or neglect, as well as financial evidence from banks, legal documents and purchases.

“People will know now that law enforcement is really paying attention to crimes that earlier, it wasn’t that they didn’t care about, it was that they needed assistance in identifying these crimes,” Nessel said. “Now people know that they’re watching these types of offenses.”

Michigan doesn’t have a specific elder abuse statute, so many elder abuse cases are investigated using a standard police report form that looks to establish whether the suspected crime could fall under the vulnerable adult statute, said Assistant Attorney General Scott Teter, division chief for the department’s Financial Crimes Unit.

“It’s a very complex crime,” Teter said. “There’s not a lot of teaching in the police academy on it.”

The program helps to create best practices across the state for the investigation and prosecution of elder abuse, according to Michigan State Police Director Joe Gasper. He said that it’s similar to a standardized form created in 1994 to help law enforcement investigating domestic violence cases.

“The form aids in identifying not only physical abuse but financial abuse,” Gasper said. “This will be a good foundation for all law enforcement to follow.”

The new form will prompt officers to identify items that may qualify a person as a vulnerable adult, like if they need assistance walking, cooking, bathing, driving, or taking medication. Officers will use a checklist for potential signs of physical risks, like bodily injury, dehydration, soiled conditions, bad odors or malnutrition. The form also requires officers to find out if a senior is at risk of financial harm through a “parasitic” caregiver, poor care, the person controlling the victim’s bank account, or through legal provisions that remove an individual’s decision-making capacity, such as guardianships, conservatorships or power of attorney.

Among the evidence collected in a financial harm investigation are copies of all legal documents, financial statements, vehicle titles and photographs of the senior’s living conditions.

Reference: The Detroit News (September 10, 2019) “Mich. task force rolls out new elder abuse reporting form”

How Will a New Illinois Law Protect Seniors?

In an attempt to protect senior citizens to a greater degree, a bill by Illinois State Senator Rachelle Crowe (D-Glen Carbon) to deny inheritance to anyone convicted of assaulting their elderly family members was signed into law recently.

Wealth Advisor’s recent article, “New Illinois law denies inheritance to those who abuse elderly family members,” says with the current Elder Abuse and Neglect Act, an individual who is convicted of financial exploitation, abuse, or neglect of an elderly person is prohibited from benefitting from the victim’s estate.

Senator Crowe’s proposed legislation broadens the law to include assault, aggravated assault, battery, and aggravated battery against anyone over the age of 60.

“It’s disheartening that we need legislation such as this to prevent family members from taking advantage of their elders,” Crowe said.

“Seniors are targeted every day for their estate, and I’m proud to put this legislation forward to prevent abusers from benefitting after committing this serious crime.”

“Every day, we see the devastating effects of abuse of senior citizens, often by family members,” said Tom Gibbons, Madison County State’s Attorney. “I’m thankful to Senator Crowe and our legislators passing this important measure to prevent abusers from profiting from their abuse.”

Crowe has worked on other protective legislation for the elderly. She has created Illinois’ Elder Abuse Task Force. The state senator plans to be a member of the task force and to study senior mistreatment and protective services and laws. The task force will then report the findings back to officials.

“We hope not to merely punish cruelty, but to deter it with this law,” said Crowe. “The message for abusers should be clear: You get nothing.”

House Bill 347 passed the Senate and awaits the governor’s signature to become law. It would go into effect on January 1, 2020.

Reference: Wealth Advisor (August 6, 2019) “New Illinois law denies inheritance to those who abuse elderly family members”

New Dementia Education Now Required for Physicians and Nurses

Connecticut Senate Bill 827 adds continuing medical education training on Alzheimer’s and other types of dementia for nurses and physicians in the state, according to a recent article from McKnight’s Senior Living, “New state laws emphasize dementia training, background check database access.” This is good news for the 78,000 people living with the disease in the state. The goal is to give these medical professionals the resources they need to identify the signs and symptoms of dementia in the patients they are caring for.

Effective January 1, nurses renewing their licenses are required to take two contact hours of training or education about diagnosing and treating cognitive or mental health conditions such as Alzheimer’s disease, dementia, delirium, related cognitive impairments and geriatric depression. And physicians who are applying to renew their licenses may count toward their training requirements two hours of continuing medical education in these areas.

“With no cure for Alzheimer’s, it is imperative that we detect the signs of this disease earlier, enabling us to improve the quality of life of those with this disease,” said state Sen. James Maroney (D), who co-chairs the state Aging Committee. “This legislation makes great progress towards ensuring just that,” he added, noting that the state has the seventh oldest population in the U.S.

The new law also authorizes an update of the Connecticut Alzheimer’s Plan to build dementia-capable programs. Under the law, the executive director of the state Commission on Women, Children, and Seniors is to create a working group to find any issues in the implementation of a task force’s recommendations and to make recommendations on best practices for Alzheimer’s Disease and dementia care.

Connecticut’s governor also signed into law Senate Bill 832. This legislation mandates that the state Commission on Women, Children, and Seniors provide a portal on its website with links to publicly available databases, and the professional licensure verification database maintained by the state Department of Public Health (used for background checks of those who work with the elderly).

“Elder abuse and criminal action against those with disabilities are unacceptable, and the public should be aware who those perpetrators are in order to protect their family and friends from future act of crime against our most vulnerable populations,” commented state Senator Tony Hwang.

In addition, the new law expands the Department of Public Health’s background check program for those working in the long-term care field. In the past, people who had been convicted of certain crimes against older adults were not included in the program. Those who have been convicted of other crimes are no longer permitted to work in long-term care facility.

Reference: McKnight’s Senior Living (July 22, 2019) “New state laws emphasize dementia training, background check database access”

What is San Diego Doing to Combat Elder Abuse?

Finance professionals who serve senior citizens “are some of our best eyes and ears for spotting and preventing the exploitation of older and dependent adults,” District Attorney Summer Stephan said during a news conference at the San Diego Hall of Justice.

Fox 5 San Diego’s recent article, “County battles financial elder abuse with new campaign,” says that under California law, employees of financial institutions, including all banks and credit unions, are required to report suspected elder and dependent adult financial abuse.

This applies whether they have direct contact with a potential victim or even just witness an incident they suspect may be financial abuse.

“Employees in financial institutions can make a real difference in the lives of some of the most vulnerable in our community to help protect them from losing their life savings,” Stephan commented.

The new program, launched in conjunction with Financial Elder Abuse Awareness Month, gives finance workers examples of warning signs to watch out for and details on how to report any suspected abuse of the elderly.

The training materials include a video featuring industry representatives from the Credit Union League and Western Bankers Association, as well as Marlene Ruiz, a longtime local bank employee who helped prevent a financial elder-abuse crime.

When Ruiz saw that one of her older clients was the victim of an obvious scam, she intervened. As a result, she was able to prevent the victim from having thousands of dollars stolen from his bank account. In honor of those actions, the District Attorney’s Office named Ruiz one of its “Citizen of Courage” in 2018.

An estimated $36.5 billion is lost every year in the U.S. from elder financial exploitation. Last year, U.S. banks reported nearly 25,000 suspected cases of elder financial abuse to the Treasury Department. That’s more than double the amount of five years earlier.

In fiscal 2017-18, San Diego County Adult Protective Services fielded 4,563 referrals about financial-abuse allegations. Nearly 15% of those reports came from financial institutions, according to Stephan’s office.

Reference: Fox 5 San Diego (June 18, 2019) “County battles financial elder abuse with new campaign”