Most parents want to give as much as possible to their children and to transfer money and assets to their offspring. However, sometimes children or others might take advantage of parents in poor mental or physical health, wiping out their financial resources.
Most parents want to give as much as possible to their children. With this in mind, some put together elaborate schemes to transfer money and assets to their offspring. This is one thing. Another is when the money is not given willingly.
Children or others might take advantage of parents in poor health, either mentally or physically, who are unaware that they are being robbed. Their financial resources for care during their remaining years are completely wiped out or severely diminished.
According to a study by Met Life Mature Market Institute, nearly $3 billion dollars are stolen from elders each year by others. This includes not only family members, but also caregivers or even acquaintances and neighbors plus money managers and insurance agents. This dreary statistic suggests that not only trusting seniors but those who are younger and writing wills need to be more aware of this possibility and protect against it.
More than stealing
Financial mistreatment often includes more than direct theft. It can entail fraud (falsification of records for the financial gain); invalid real estate transactions (such as unintended changes to real estate documents); lack of fulfillment on the part of a contractor; or an invalid lien.
Scams are also prevalent among the elderly, including electronic misrepresentation in an effort to obtain money from the target. Sometimes even loans on legitimate mortgages can be delivered to an unauthorized person.
And lastly, inappropriate investment and insurance products are repeatedly sold to the elderly. Here are some common examples:
• A high investment fee is charged for a product that could be purchased at a lower cost.
• A 30-year annuity is peddled to a 90-year-old with high upfront charges (primarily, this benefits the salesperson, not the 90-year-old client).
In other words, if someone can think of a way to take advantage of those that are unable to defend themselves, it sadly happens.
1. Begin to act now
Getting things in order while you are in good health and mentally competent. If you are intervening for another person, please see the “For Help,” resources below.
2. Put together a check and balance
Appoint not one person, but two with power of attorney for your financial affairs. If they are dissimilar, one should balance the other. For example, rather than two siblings, who could conceivably connive with one another, appoint one trusted child and a reliable lawyer or accountant.
3. Duplicate of your financial statements
Send the duplicates to other parties. For example, a younger trusted friend, brother or sister. This third party might spot an irregularity that others have not.
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