New York Estate Planning & Elder Law Blog
A recent Financial Advisor article shared examples of real-life cases where seniors were financially abused. These situations are quite common, and the complexity of many of the schemes underscore the difficulty in combating the problem.
For example, in one case an advisor noticed suspicious transactions when reviewing the senior’s records. Eventually it came to light that the senior–an elderly woman who was recently widowed–had invited another to move in with her. The much younger man was withdrawing retirement funds before making weekly trips to a local casino. Fortunately, the observer was able to make the family aware of the situation and put an end to it before the entire account was stolen.
In another case, an elderly man made a large withdrawal that raised red flags with advisors. The senior explained that the money was to be given to a military veteran who had approached him claiming that he needed the help to qualify for a special grants. The senior thought the loan would be returned right away. Further investigation revealed it all to be a scam; fortunately the matter was caught before money changed hands.
Yet another case was more complicated, because it involved a financial services salesman who took advantage of an elderly couples vulnerabilities to sell them a produce they obviously did not need. In that case, a senior couple was convinced to take out most of their retirement funds and placed it in a financial product that promised to pay out decades into the future at large returns. There was nothing inherently wrong with the product in general, but it was wildly inappropriate for the senior couple. That is because the annuity had severe penalties for early withdrawal. The couple, in their 80s, were in need of cash flow to live, but the financial products was geared for maximizing gains decades into the future–where it would not help the couple. Instead of living out their days comfortably on their savings, the seniors lost access to their resources and were put into dire financial straights. It goes without saying that the experience-level and trustworthiness of all advisors working with senior finances should be investigated closely.
These incidents are examples of the need for outside observers to be aware of senior’s monetary circumstances, like an elder law attorney or financial advisor. That doesn’t necessarily mean an elderly resident needs to lose control over their own finances, but it does mean that checks should be in place to catch highly suspicious activities as soon as possible.