It started when an alert broker called to let Alan Sims know that $3,360 was being withdrawn weekly from his 103-year-old friend's brokerage account.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.
Sims, executor of his elderly friend's estate, and her attorney had to step in and confront the caregiver, who was immediately fired.
"It 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."
Sadly, 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.
"Unfortunately, it's a lot more common than we like to think," said Marylou Robken, a Carmichael 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 something's wrong."
Plenty 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 Washington, D.C.
Getting 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.
That 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 living trust.
Keep good records: Fiduciaries are expected to act in the other person's best interest, manage the finances carefully and maintain good records.
Keep 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.
Avoid 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.
Get 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.
Report 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.
Source: Consumer Financial Protection Bureau
RESOURCES FOR SENIORS AND THEIR FAMILIES