started when an alert broker called to let Alan Sims
know that $3,360 was being withdrawn weekly from his
103-year-old friend’s brokerage account. Turns out
that a live-in caretaker was padding her hourly wages,
writing checks of varying amounts that could have pushed
her annual salary to more than $165,000 a year.
executor of his elderly friend’s estate, and her
attorney had to step in and confront the caregiver, who
was immediately fired.
was devastating," said Sims, recalling the events
eight years later. "Not only the amount of money
that was taken, but the trust that was broken."
it’s not unusual. Every year, thousands of examples of
elderly financial abuse occur, often at the hands of
friends, family or caregivers. In 2010, the annual
amount of losses due to financial exploitation of
seniors was estimated at $2.9 billion, according to a
study by the MetLife Mature Market Institute and the
National Committee for the Prevention of Elder Abuse.
it’s a lot more common than we like to think,"
said Marylou Robken, a Carmichael, Calif., CPA who has
worked as a forensic investigator on dozens of elderly
abuse cases in the past 15 years. "So many elderly
people are isolated, and they may not even know that
financial exploitation of seniors is nothing new. In
recent years, local, state and national organizations
have attacked the problem on numerous fronts,
encouraging more awareness, better reporting and stiffer
of older Americans are more than capable of handling
their own affairs and value their independence. But for
many, "admitting that we can no longer manage our
financial affairs can be as traumatic as having to give
up driving," noted Eleanor Blayney, consumer
advocate for the Certified Financial Planner Board in
HELP: An estimated 50 million-plus U.S. residents are 62
and older. As cognitive abilities fade or health issues
intervene, it’s a given that many of us will be — or
already are — picking up the financial reins for aging
parents, family, friends or neighbors.
role is what’s known as being a fiduciary, someone who
puts another person’s best interests above their own.
It takes many forms. It could be a daughter who has
power of attorney for financial or medical decisions on
a parent’s behalf. It could be a trusted friend who’s
the designated receiver of veterans’ or Social
Security benefits for someone unable to do banking. It
could be the trustee named to manage assets in a person’s
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up to the "caregiver generation" to be sure
that aging parents and others get the help they need to
manage their financial affairs and avoid becoming
victimized, said Richard Cordray, director of the
Consumer Financial Protection Bureau, in a recent
month, Cordray’s consumer bureau issued a series of
free how-to guides, "Managing Someone Else’s
Money," that spell out what’s required of those
who: have power of attorney to make someone’s
financial decisions; are court-appointed guardians or
conservators; are trustees of someone’s revocable
living trust; or are government appointees handling
someone’s income, such as Social Security or veterans’
guides are intended to "walk these caregivers
through their financial duties and provide practical
tips, like explaining common consumer scams,"
too often, seniors fall victim to fraud or financial
exploitation. "They make attractive targets because
they often have tangible household wealth — whether it
is in retirement savings or home equity — but they may
be isolated or lonely or otherwise susceptible to being
influenced by a predator in disguise," he noted.
GOOD RECORDS: Fiduciaries are expected to act in the
other person’s best interest, manage the finances
carefully and maintain good records.
a detailed list or a file of all money you receive or
spend. Include the date, amount and purpose of checks
paid or deposited, as well as names of people/companies
involved. Keep receipts and notes, even for small
expenses. For example, write on the receipt: "$50,
groceries, AllBrands Grocery Store, May 2."
Sims was given power of attorney for the financial
affairs of his 103-year-old friend, for instance, he
maintained a written journal and took meticulous notes
of every financial transaction he made on her behalf.
Also, checkbooks and other financial documents were
safely put away where they weren’t accessible to
CONFLICTS: No matter what kind of fiduciary role you’re
taking, it’s imperative to keep the senior’s money
separate from your own, the Consumer Financial
Protection Bureau says. For instance, it might be OK to
buy a car with the senior’s funds to drive to doctors’
appointments or to do banking, but if you’re using the
vehicle mainly for personal use, that could be a
conflict of interest. Same with paying your relatives to
do work at the senior’s home or apartment.
SIGNED UP: No matter our age, all of us should designate
someone to act on our behalf, in the event we’re
incapacitated due to illness or other impairments. Some
financial advisers recommend that anyone reaching 18 or
college age should fill out a power-of-attorney document
for financial or health care reasons.
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a Federal Reserve Bank survey earlier this year, only 22
percent of those age 40 and up said they’d created a
power-of-attorney document, naming someone to handle
their financial affairs in the event they’re ill or
mentally incapacitated. Another 12 percent said they’d
considered it but never followed through.
care power-of-attorney documents are easily found online
through medical and government agencies and must be
signed by two witnesses. Power-of-attorney documents for
financial affairs are a bit more involved. They can be
obtained online, at a bank, brokerage or through an
attorney but usually must be notarized.
FINANCIAL ABUSE: In a 2012 national survey of certified
financial planners, more than half — 56 percent —
said they’d worked with older clients who were victims
of "unfair, deceptive or abusive" financial
practices. In its new guide, "Financial
Self-Defense for Seniors," the financial planner
board outlines 10 common financial frauds that may
entrap seniors, such as "free lunch" seminars
or inappropriate investments.
to the board’s survey, only 5 percent of seniors
report financial abuse, either due to embarrassment,
fear of naming the perpetrator or uncertainty about
exactly what occurred.
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the most insidious type of financial abuse occurs at the
hands of someone’s own children.
a certified fraud examiner for 15 years, Robken has seen
more than her share of financial abuse targeting
seniors. The most upsetting was a Placer County, Calif.,
case in 2008 where an adult son moved his elderly mother
out of the family home, put himself on the property deed
and lived a cushy lifestyle with his girlfriend. His
mother, in the early stages of Alzheimer’s, was
essentially abandoned in a neglected apartment.
wasn’t until a granddaughter blew the whistle on the
situation, Robken said, that law enforcement got
involved. By the time the son was found guilty at trial
and sentenced to prison, his mother had died.
tugs at your heart strings," said Robken. "How
could someone do this, especially to (their) mom?"
it’s a bank, a trusted friend or an adult child, those
who step in as fiduciaries to help manage someone’s
financial life have a built-in responsibility to report
suspicions of elder financial abuse, said CPA Stuart
Robken, a forensic auditor for 30 years. He and his
wife, Marylou, both are retiring this year. "People
just need to be aware. They don’t have to prove
anything, but just suspect it."
SIGNS OF ELDERLY FINANCIAL EXPLOITATION:
the warning signs:
or property is missing.
withdrawals from bank accounts, frequent ATM use or
large wire transfers;
to pay normal bills;
statements or bills stop arriving in the mail;
of merchandise or services that seem unnecessary;
are added to bank accounts that they’re
unable/unwilling to explain;
gifts to caregivers, family members or a new "best
to beneficiaries on a will, life insurance policy or
caregiver, friend or relative suddenly begins handling
the money without documentation of the financial
Consumer Financial Protection Bureau
FOR SENIORS AND THEIR FAMILIES:
Someone Else’s Money": Four free guides covering
how-tos of being a financial fiduciary, as well as
potential signs of elderly financial abuse, provided by
the Consumer Financial Protection Bureau. For copies, go
to: ConsumerFinance.gov or call toll-free: 855-411-CFPB
Self-Defense for Seniors": Free booklet from the
Certified Financial Planner Board covers 10 "red
flags" of financial abuse and how seniors can avoid
getting scammed. To download a copy, visit
LetsMakeAPlan.org. For a mailed copy, go to