Elderly Often Financial Victims

by Jerrold Bartholomew

In my practice I have all too often I found evidence that my elderly clients have been victims of financial abuse in one way or another. This story shows just how common the phenomenon is:

Motivated by the high interest rates and the fear that Jeannetta, at least, might outlive their savings, the Mounceys drained their bank accounts and invested $135,000.

“With Jack being so sick, we wanted to make sure we had decent income, because I couldn’t afford our house on my own,” said Jeannetta Mouncey, 64.

Less than a year later, though, the interest checks had stopped and much of the Sarasota couple’s money was unaccounted for. Their First Liberty sales agent, Fred Howard, had disappeared. Eventually, the company went dark, too, its president locked up in an Arizona prison on securities fraud charges.

And here in Michigan, similar concerns abound:

Abuse of elderly people, even by their own children, has become the fastest-growing crime in Wayne County and the nation, and the problem will only worsen as baby boomers age, officials said Wednesday. The world is full of dangerous people of all kinds. Of those victimizing the elderly, some are predators and some are merely negligent. The elderly are particularly susceptible to manipulation and misinformation. And with significant accumulated assets for retirement, they are logical targets.

A few thoughts come to mind on how seniors can protect themselves. First, as a general rule, seniors have a very low risk tolerance because they depend on their assets and have little chance to recoup losses. Investments with high rates of return only come with increased risk. That is not to say that annuities, often pitched as minimal risk investments, are an easy solution. See here for more information on complications with annuities.

Investments pose a significant risk of loss in many cases, both from the failure of investment company and from the failure to comply with the extensive regulations regarding Medicaid long term assistance. Significant financial decisions should be made after consulting not only with a financial planner, but also an elder law attorney and perhaps even an accountant. There are too many risks not to proceed with caution and impartial advice.

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