Elderly Financial Abuse in the US (pension, conversation, federal, fighting)

[aaauger]

If existing laws didn't protect you from being defrauded of your savings when you are old and incapacitated, would you want to know? Would you want to change the laws?

Here's the reason I ask. After one of our family members passed away, we discovered her caretaker had removed $250,000+ from her accounts for personal use. The family didn't poke around in her finances during her life for fear of being viewed as disrespectful or gold-digging. However, her bank admitted under oath to knowing, profiting $10k+ and doing nothing. The legal case got kicked back and forth between county court and state supreme court for years and was finally thrown out on technicalities (and politics).

Our family will never see the money but would like some good to come out of this incident. But the media's not interested. And some days, we are so discouraged that we feel that Americans get the representation that they elect and deserve. Put another way, should we let it go and just look out for ourselves?

What do you think? Constructive comments welcome.

[cousinsal]

I was furious to discover, upon becoming the Executrix of my aunt's will that a niece on the other side of the family had stolen $30K. I was told that it would not be worth it to do anything, since we could not prove that my aunt did not give it to her when she visited the nursing home. (although we know that is pure BS)

It seems it's up to YOU to prove that the person did not have it given to them. Instead of the other way around, as it should be - that the person has to prove that it was given to them.

I'd keep fighting to have the law changed regarding the above, if you have the time to do it.

[aaauger]

One of the gaps in elderly law is the absence of a "Dead Man's Law" which prevents survivors from putting words in the mouth of the deceased. In our situation, the perpetrator said "Yes, she wanted me to spend $250k+ on myself for Harley Davidsons, video games, etc. even though she'd go bankrupt shortly". This type of thing is admissable in most states and will immediately preclude any kind of criminal prosection. Alabama accepted this argument even when the perpetrator had a Power of Attorney - which is a legal obligation to spend funds only on the incapacitated individual.

And this is just one example of what's missing in the law to protect the elderly's retirement savings. More examples, in most states:

- Perpetrators can file bankruptcy to escape civil litigation.
- Banks are required by federal law (UCC) to DETECT fraud but not REPORT fraud, even when profiting from it.
- Banks have a very small liability (ex. 6 mo.) if the family or victim detects fraud.

Also know that, according to an attorney who is expert in this area, elderly financial abuse is a "cottage industry" in the US. The courts don't want to address this but it's going to be another economic disaster when Baby Boomers retire and those that bothered to save for retirement get bilked.

[cdelena]

Preying on the old happens all the time and many times there is nothing you can do about it. Although I manage the small portfolio my mother has I cannot stop her from making 'loans' to my less responsible siblings that will eventually leave her with little and the estate that will be split six way a penny toss.

[knoxgarden]

There are some laws in place. But I think nothing really beats just spending time with them and listening to what they have to say. Talking about financing isn't being gold digging, it's caring. You can use an article you saw in the Wall Street Journal or such to start a conversation.
In my mother's last years, we lived on opposite sides of the U.S. but I visited twice a year and spent time just listening to her. And when she started talking about a "nice young man who did chores for her" and gave her a sob story about a wife with cancer, I listened very closely. Seems she was giving him a couple of thousand when he asked for it and this had happened several times.
I was shocked. My mother was usually so careful with money. I talked to her about how he was scamming her and when she said it was hard to turn him down, we went to the bank and arranged that any check for cash or an individual for more than $100 had to be co-signed or approved by me or my sister.
She was happy with that because it gave her a reason to turn him down. She had to check with her daughters. But she still had access to cash when she needed it.
The "nice young man" disappeared the first time she told him that. We discovered that the plan also got rid of money drains by a cousin who claimed that my father had promised him money.

[aaauger]

In our case, our relative had selected someone she thought was trust-worthy. This person was also had some leverage with our aunt because she depended on this person for some things.

So, in the case that an elderly person has chosen poorly or feels trapped into a relationship, is it just his/her tough luck if he/she is embezzled?

That's one position but it's a tough one for the elderly person, the elderly person's family (when the embezzled elderly person needs assistance), and tax payers (when the embezzled elderly person needs public assistance).

[knoxgarden]

Good column on this topic in today's Contra Costa Times.
http://www.contracostatimes.com/eldertheft/ci_7678112
They've done quite a few articles on it. It's becoming more of a problem and it's difficult to find a way to stop it without taking away older persons right to privacy and to manage their own affairs.
It's even harder these days with electronic bill paying and banking. I read a story on the other day about an elderly man who'd been dead in his house for 3 years but no one knew because all his payments were made electronically so everything just kept getting paid.
There's an organization here that's trying to do something about it.
Prevention of Elder Financial Abuse and Elder Financial Exploitation (http://www.bewiseonline.org/index.shtml - broken link)
Apparently California has some tough laws on elder financial abuse.

[nancy thereader]

This is sadly a story that happens all the time. People are so greedy.

[aaauger]

Knox - Thanks for the links. It's encouraging to know that my family isn't alone in wanting to help others from being financially ruined when they're vulnerable.

Here are some protective changes to the law that wouldn't impact the elderly's privacy:

1. Criminal prosecution for any POA that uses the money on him/herself (as already prohibited for a fiduciary).
2. Requirement for POAs to be bonded and to keep financial records of all expenditures.
3. Criminal prosecution for any POA that forges checks.
4. Requirement for a Dead Man's Law which prevents anyone from attributing "gifts" to the deceased's "wishes".
5. Requirement for banks to report (not just flag) fraudulent activity to 1) the victim or POA, 2) the social services department, 3) the sheriff's office.
6. Criminal prosecution for banks (and bank officers) that knowingly profit from financial elderly abuse.
7. Disallow states from interpreting federal banking laws.
8. Change the federal banking laws (aka. Uniform Commercial Code) to protect victims of fraud. Ex. Don't limit a bank's liability.

People think, at the very least, that their money is safe in a financial institution because it is regulated (and presumably professional and moral). Not always so.

[cousinsal]

It's awfully disgusting. Now, my one brother and I have found out that our other brother was stealing money from my mother's checking account, since he was paying her bills. That's really all the money she has - what she gets from SS and a pension of my late father's.

Anyway, her bills were late - that's how we discovered what was going on. And, the taxes on the house had not been paid for two years! The poor woman was going to get evicted someday.

So, my "good" brother paid off the taxes, and we gave the bill paying back to my nephew, who does well with it.

Can't even trust your own family to do the right thing!