The Petrosewicz Law Firm Estate Planning Blog

Financial Elder Abuse Is Growing

Financial elder abuse is defined as the “fraudulent or otherwise illegal, unauthorized or improper act or process of an individual, including a caregiver or fiduciary, that uses the resources of an older individual for monetary or personal benefit, profit or gain, that results in depriving an older individual of rightful access to, or use of, benefits, resources, belongings or assets.” That’s from The Older Americans Act of 2006.

Consumers Digest estimates that there are at least five million cases of financial elder abuse in America every year. An article titled “Population ages, financial abuse rises” from the Reading Eagle wisely notes that seniors are not just being targeted, they are the bull’s eye.

One of the reasons is because many older Americans live in isolation. A person who spends most of their time alone will welcome any simple human interaction, including talking to anyone who calls on the phone, unknown neighbors introducing themselves, marketing mail or interactions on the internet. This desire for company makes seniors more likely to ignore warning signs and to hand over money and control of their assets.

Do you wonder what kind of person would hand over their power of attorney to a stranger? The plain truth is that most financial elder abuse is committed by people who are closest to the senior. Family members are far more likely to prey on seniors than a stranger.

One financial advisor notes an instance where a scammer forged a check for $25,000 in a senior’s name, then kept doing it until she had stolen up to $75,000. She did it repeatedly, because she knew that she could get away with it.

The key to prevention is planning. First, seniors should simplify their financial and legal matters. Surrounding yourself with trusted advisors and family members who serve as checks and balances for each other is a good idea. It’s sometimes hard to know who to trust sometimes, especially family members. An estate planning attorney should be part of your team, and everyone should work together.

If you become suspicious that financial fraud is happening to you or a loved one, you may want to reach out to the Adult Protective Services office in your community. They will be able to advocate on behalf of the senior.

Treat everything and everyone with a degree of suspicion. If someone knocks on the front door and says they can offer you a discount on tree removal or roof repair because they are in the neighborhood, don’t believe them. You should also have an estate plan in place that protects your assets, so they are less vulnerable to a scammer.

The Petrosewicz Law Firm can assist you with your elder law needs.  Contact us today at (281) 344-9455 or [email protected].  

Reference: Reading Eagle (Feb. 9, 2020) “Population ages, financial abuse rises”

Check Cashing Company Part of Elder Abuse Case

Two women and two check-cashing companies have been accused of profiting from a scheme that had a 74-year-old man suffering with dementia as their target. The scam, reported in the article “Woman carried suitcases of cash out of check-cashing business, elder abuse lawsuit says” from the Fresno Bee, was attempting to drain millions of dollars from the man.

The lawsuit alleges that the check cashing companies should have known that the 74-year-old widower was a victim of financial elder abuse by the two women, who are accused of convincing David Silnitzer to write checks totaling hundreds of thousands of dollars.

Making matters worse, one of the women managed to get legal permission to oversee the elderly man’s assets, which were estimated at $6 million.

The Fresno County Public Guardian became the conservator of David Silnitzer’s estate this year, after receiving a report from the Fresno District Attorney’s Office about the possibility of elder financial abuse taking place. The county is going after the check-cashing companies for unfair business practices, financial elder abuse and negligence.

The DA’s Office is investigating the two women, Christina M. Alvarado and Brenda L. Denning, but no charges have been filed to date. However, a Fresno County Superior Court judge did issue a restraining order against Alvarado to try to protect Silnitzer from any further harm from her.

About a year after Silnitzer’s wife passed away, Silnitzer began to rely on Alvarado, who has an extensive criminal history. He trusted her as a caretaker, support person and even referred to her as a fiancé at one point. She moved in with him and started a spending spree, using money taken from his accounts, opening new accounts and cashing checks.

He may not have been aware of what was happening. He was given a “Mini-Mental State Exam” to test his mental skill and scored 5 out of 30, indicating severe dementia.

From Aug. 1 to Sep. 12, 2016, more than $83,000 was withdrawn from Silnitzer’s account at Bank of America. Many of the withdrawals were made at non-Bank of America ATMs, including many located in casinos. Bank of America officials raised red flags, and Alvarado moved to a different bank. She opened an account at Chase for more than $900,000. During the eleven days after the account was opened, she made a withdrawal of more than $800,000. Officials at Chase, Bank of America and a third bank closed the accounts, suspicious of the activity.

Alvarado, therefore, turned to the check cashing companies. More than $1.5 million was cashed at one company. The check cashing companies earned large fees and didn’t ask any questions.  Alvarado and Denning then had Silnitzer sign a durable power of attorney for financial management. The checks kept getting cashed.

Law enforcement officials who specialize in financial elder abuse say that seniors are very attractive targets to thieves and scammers. Those who live alone and are isolated from family are particularly vulnerable. Family members can be the first line of defense against thieves.

The Petrosewicz Law Firm can assist you with your estate planning needs.  Contact us today at (281) 344-9455 or [email protected].  

Reference: Fresno Bee (Oct. 9, 2019) “Woman carried suitcases of cash out of check-cashing business, elder abuse lawsuit says”

When Is the Best Time to Disinherit a Child?

This may sound like something out of a Dickens novel, but sadly, it is someone’s real life. A woman is mourning the loss of her mother. She is the trustee and only beneficiary of her mother’s trust, as explained in the article “It’s never too early to disinherit children” appearing in the Santa Cruz Sentinel. After disappearing for decades, her sister visited with the mother a few times a year toward the end of the mother’s life. Now the sister has retained an attorney to challenge the trust, accusing the woman of elder abuse and stating that the mother was insane.

What can this sister expect?

The goal of the formerly absent sister is to get the trust thrown out, so that the estate will pass equally between the two sisters. She can accomplish this, if she is able to invalidate the trust and invalidate any prior wills the mother may have signed disinheriting one sister and leaving everything to the other sister.

She may not have a case with a lot of merit, but it is going to cost a lot to defend the estate plan. She may be hoping for a quick payoff.

Whether the case is successful may depend upon the circumstances surrounding the creation of the trust. In the best case, the mother would have gone to see the attorney by herself and created the trust with zero involvement of the sister who is the trustee. Even better would be if the trustee sister didn’t know a thing about the trust or the estate plan, until after it was completed.

Here’s the concern: if the mother created the trust only after she became dependent on the more involved sister, and if that sister selected the attorney, made the appointment and had a conversation with the attorney about how awful the other sister was, then it will be hard to prove that the trust was set up purely on the mother’s wishes.

It’s an odd lesson, but in truth, it’s never too early to take steps to disinherit children. If someone knows that they are going to create an estate plan that is going to make one or more people very unhappy, the sooner they document these wishes, the better. It should be done while the person is still living independently and does not require a lot of help from any family member.

Keeping the people who will benefit from the disinheritance out of the creation of the estate plan is best, since it further removes them from involvement and is better when they are accused of being manipulative.

The best tactic is to create an estate plan with the help of an experienced estate planning attorney who can serve as a neutral and unbiased witness and can testify to the fact that the person knew what they were doing when the estate plan was created.

The Petrosewicz Law Firm can assist you with your estate planning needs.  Contact us today at (281) 344-9455 or [email protected].  

Reference: Santa Cruz Sentinel (June 2, 2019) “It’s never too early to disinherit children”

Phony Inheritance Scams Snags Southwestern Senior

The Hawkins County Sherriff’s Office was notified by a Deputy from Mineral County, Nevada, that he was working on a case where an elderly Hawkins county man was scammed, according to the Times News article “Elderly Hawkins man loses $4K in phony $89.5 million inheritance scam.”

This is a cautionary tale for seniors, who are often targeted by scammers, and their adult children, who need to protect their aging parents.

The 80-year-old victim had received phone calls from a man claiming to be an attorney from the African nation of Ghana named Abu Jones. He told the elderly man that he’d inherited $9.5 million, which could only be collected after paying fees to the U.S. Treasury Department. He was instructed to send money order payments to a person in Hawthorne, Nevada.

The person from Hawthorne was being scammed as well.

The elderly man sent several payments to the Hawthorne resident, who in turn sent those payments on somewhere else. He told police that he wasn’t sure how much money he had sent to the person in Hawthorne, but believed it was in excess of $4,000.

A bank in Hawthorne was working with the Hawkins County Sherriff’s Office to try to return a portion of the money to the victim.

Scams centered in outsized inheritances and fraudulent lottery prizes are very common. They all require payment of some kind of fees, in order to receive the inheritance or the prize. Needless to say, there is no inheritance, nor is there a prize.

The public is reminded to never send money orders, gift cards or give anyone credit card numbers or gift card numbers, if they are requested by someone making a promise of a big payday.

The first thing to do if you are targeted, is to hang up. The second is to call the local authorities, especially if the caller is persistent and seems to have obtained personal financial information about you or has dire news about a family member.

Many of these crimes go unreported, because the victims are embarrassed that they have fallen for what appears in hindsight to be a very obvious scam. Seniors who are more trusting than younger people, or who suffer from even mild cognitive decline are most vulnerable.

The Petrosewicz Law Firm can assist you with your elder law needs.  Contact us today at (281) 344-9455 or [email protected].  

Reference: Times News (March 4, 2019) “Elderly Hawkins man loses $4K in phony $89.5 million inheritance scam.”

How to Combat Elder Financial Abuse

One estimate is that the amount of elder financial fraud is $30 billion a year, defining it as the theft of money by thieves who include con artists, strangers, caregivers or trusted friends or family members. According to Consumer Reports, in the article “3 Critical Ways to Prevent Elder Financial Abuse,” these crimes are often not reported. Sometimes, the seniors are too embarrassed to admit that they were fooled, or they don’t want to put a family member at risk. They often don’t know they have been scammed, or are physically unable to articulate what has happened to them.

This is starting to change, as banks are starting to increase their reporting of suspected elder financial abuse. Last year, U.S. banks reported roughly 25,000 cases of suspected elder financial abuse to the U.S. Treasury. That’s more than double the amount reported in 2013, as reflected in data from the U.S. Treasury department’s Financial Crimes Enforcement Bureau.

One reason behind the surge is demographics: although the baby boomers are getting older, they have a tremendous amount of assets and are vulnerable to being defrauded.

However, the increase in reported cases may also be bolstered by big pushes from the federal government, states, and the financial industry to fight elder financial abuse. New regulations are now in place to encourage people who are on the front lines for elder abuse: brokers, bankers and financial advisors.

FINRA, the self-regulatory agency that oversees brokers, now requires them to ask clients, no matter how young or old, to provide the name and contact information for a trusted family member or friend. If the broker believes that person is being exploited, they have someone to contact. The new regulations also allow brokers to put a hold on withdrawals from a client’s account, if they believe there may be elder financial abuse occurring. The hold is for 15 days but can be extended 10 more days.

From the federal government, the Senior Safe Act became law in 2018. It enables the employees of any financial institutions to report concerns about elder abuse, without fear of being held liable for disclosing private information. To qualify for this protection, financial institutions are required to provide training to staff about recognizing the abuse. At the state level, NASAA (the North American Securities Administrators Association, a group of state regulators) adopted a rule in 2016 which mandates that brokers and financial advisors report any suspected abuse to state authorities. The rule also allows them to stop withdrawals on accounts and protects brokers and advisors from liability, if they stop account disbursement. Sixteen states have enacted versions of the rule, and there are six more states working on legislation.

On a more personal level, there are three things family members and friends can do to prevent elder financial abuse. One is to stay in touch and ask questions of aging parents. Isolation and cognitive impairment are the biggest risk factors. Make sure that your parent is keeping up with bill paying, and whether he or she is in contact with new friends, strangers who may not have their best interests in mind.

If your parent is willing, start by offering to help with a few financial tasks, like bill paying. Keep it low key, by including a visit with the task. If you see things are not being handled well, stay on top of it.

Another step is to set up checks and balances, by making sure that critical legal documents are in place. There should be a will, a healthcare proxy, a HIPAA release form and a durable power of attorney. The durable power of attorney will let you pay bills and manage finances, if and when they can no longer manage. If there is no will or estate plan in place, make an appointment for your parent with a qualified estate planning attorney as soon as possible.

Consider streamlining aging parent’s finances. If they have too many credit cards and too many bank accounts, it may make things easier if they can pare things down to one bank and one credit card. Be very careful with retirement accounts, like 401(k)s and IRAs, to avoid any taxes and penalties.

Simplifying money management and being involved with your parent’s finances and their lives can help prevent financial elder abuse.

The Petrosewicz Law Firm can assist you with your elder law needs.  Contact us today at (281) 344-9455 or [email protected].  

Reference: Consumer Reports (Feb. 22, 2019) “3 Critical Ways to Prevent Elder Financial Abuse”

Police Warn about Scammers Targeting Seniors

Authorities are warning vulnerable seniors about phone scammers, who call and claim to be police officers, IRS agents and other government officials. One woman received a call just days after her husband died and his obituary was published in a local newspaper, reports Newsday in the article “Nassau, Suffolk police warn of phone scammers posing as officials.”

She was told that her grandson had been arrested and charged with possession of illegal drugs. To get him out of prison, the caller directed her to buy $8,000 in gift cards from a national electronics store. Frightened, the woman did as she was instructed, and gave the man the personal identification numbers on the cards when the man called her back.

Only afterwards did she realize that the man had gotten her name and her grandson’s name from her husband’s obituary. Embarrassed by her failure to realize it was a scam, she decided to speak out in the hopes it would prevent another vulnerable senior from falling victim.

Seniors are being warned to be wary of these kinds of con artists. Unfortunately, the scams are successful and that’s why they continue. Swindlers typically call victims and tell them they must take action immediately, or something very bad will happen. They sound like they mean business, and often the phone numbers that appear on the screen seem to be from a government agency. The phone numbers have been “spoofed”—altered to appear to come from a legitimate place. However, it’s all a scam.

Authorities say that many victims who are targeted are elderly, because they may not be aware of how much detailed information can now be obtained by strangers. When the caller uses their name, or names of other family members, the victim believes the call is from a legitimate agency.

However, here’s a key point: No government agency calls to demand payment in gift cards.

If the caller says they are calling from the local police station, hang up, call the local precinct to verify if the caller really works there. The same goes for utility companies or any other company allegedly threatening to turn off services. You should also note that the IRS never makes phone calls about overdue tax bills.

Anyone who receives such a call, regardless of their age, should immediately hang up.

The Petrosewicz Law Firm can assist you with your estate planning needs.  Contact us today at (281) 344-9455 or [email protected].  

Reference: Newsday (Jan. 4, 2019) “Nassau, Suffolk police warn of phone scammers posing as officials”

Financial Institutions are Cognizant of Senior’s Diminishing Capacity

This is a tricky situation for banks, brokerage firms and other financial institutions. Monitoring older customers in case they start to lose their mental agility and become vulnerable to scams seems like a good idea. However, what happens when a financial institution judges a customer’s behavior and decides that they are either impaired or at risk for a scam asks The Wall Street Journal in the article “Banks Monitor Older Customers for Cognitive Decline”? The answer is not at all simple.

Financial elder abuse is on the rise. The Securities and Exchange Commission released a report this spring that says as many as 6.6% of elderly Americans had undergone financial exploitation in the last year.

Banking personnel see some of the early signs of cognitive decline, such as when a customer begins missing payments, sending duplicate checks, bouncing checks because of confusion over balances, or sending money to unrelated people. Does the bank have a legal, ethical and/or moral obligation to alert family members?

Until recently, financial institutions operated on the assumption that there were privacy issues that precluded them from informing anyone about these kinds of suspicions. The only questionable transactions that were reported concerned possible illegal activities. Should they contact the local Adult Protective Services agency, or another social service agency?

A new federal regulation was signed into law this past spring that protects financial institutions from litigation, if they report concerns about elder financial abuse to government agencies, although there is no requirement that such reporting take place.

Some experts would like to see financial institutions go further and share their concerns with each other. This is commonly done when commercial fraud is suspected, through a department of the U.S. Treasury.

Reporting on a client’s behavior is a grey area, but some companies are enhancing their ability to identify problems. The use of Artificial Intelligence (AI) allows banks to monitor and analyze massive amounts of data that may reveal cognitive declines. In addition to relying on AI, institutions are training staff members to watch for behavior markers that may indicate decline or fraud. It helps if the banks have contact information for other family members, which can happen if the customers will permit family members to access their accounts.

One persistent problem: often the family members are the ones who are committing financial elder abuse. Another is that seniors are embarrassed about a non-family member revealing their declining capacity and often deny that anything is wrong.

The Petrosewicz Law Firm can assist you with your elder law needs.  Contact us today at (281) 344-9455 or [email protected].  

Reference: The Wall Street Journal (Nov. 20, 2018) “Banks Monitor Older Customers for Cognitive Decline”

Should I Help My Aging Parents Manage Their Investments?

As Americans live longer and their portfolios grow for extended periods of time, their adult children should be watching carefully—but how closely? That’s the question posed by the article “How to Help Aging Parents Manage Portfolios,” from U.S. News & World Report. There is no one answer, and it is a delicate situation. It is also more so for some families than others.

It’s not easy to talk with parents about their finances and their vulnerability to scam artists. Today’s thieves are also savvy. They use Facebook and other forms of social media to learn about family members travelling outside of the country, then call the elderly parents and pose as the grandchild needing money immediately for an emergency.

Older adults, who are lower in numerical skills, tend to rely on their emotional response in making financial decisions. Loneliness and depression, common in aging seniors, also increase the risk of becoming a victim of a scammer. That’s especially so, in the case of someone who has recently become a widow or widower.

It’s often hard for the senior to discuss finances with their children, unless they have done so over the course of their children’s lives and are comfortable doing so.

The biggest marker for many elderly people, is the loss of their ability to drive. That’s followed by the inability to handle one’s own finances.

However, this problem is only growing, as investors live longer and portfolios continue to grow over the course of their lifetimes. It only takes a few mistakes for an impact to hit the portfolios and often there’s no recourse.

The first step for adult children is to be aware of any signs of mental decline. Just be careful not to jump every time someone can’t find the right word or remember someone’s name. Keep an eye on their behavior: a formerly neat person who is now leaving bank statements lying around open on their desk, past-due notices arriving or an extreme amount of mail from questionable charities (versus large nationally-known organizations). This means it is likely they are having a problem handling day-to-day finances.

Don’t confront the issue in a challenging manner. Have a pleasant conversation, possibly starting with a talk about your own finances and how you speak with your own children, or plan to, to get them moving into the topic. Once they are comfortable talking about money, start discussing other important issues, like whether they have a will, medical directive or power of attorney.

These are not always easy conversations, but they are necessary. Ask if you can accompany them to a meeting with an estate planning attorney and be ready to help but not dominate the conversation. Treat them with dignity to make this potentially troubling process less burdensome.

The Petrosewicz Law Firm can assist you with your elder law needs.  Contact us today at (281) 344-9455 or [email protected].  

Reference: U.S. News & World Report (Oct. 22, 2018) “How to Help Aging Parents Manage Portfolios”

An Important Webcast on Elder Abuse

In the last few years, the federal government has greatly stepped up its efforts to fight back against the financial abuse of the elderly. Criminal cases against scammers and abusers have increased greatly as a result.

Despite these efforts, many people believe that elder abuse is still on the rise in America. The increasing number of elderly people in the U.S. are an attractive target for abusers. The government might be picking up its efforts. Think Advisor reports that two agencies have announced they will be holding a joint webcast on the issue in "Treasury's Crime Unit, Consumer Bureau Team up on Elder Fraud Prevention."

The Bureau of Consumer Financial Protection and the Treasury Department’s Financial Crimes Enforcement Network are urging coordination between various groups involved with preventing the financial abuse of the elderly. Coordinating between different agencies is important,  since different agencies need to work together to not only prevent abuse, but also to detect it when it happens and prosecute it.

The federal government continues to take the issue seriously and is looking for more ways to prevent the problem.

The Petrosewicz Law Firm can assist you with your elder law needs.  Contact us today at (281) 344-9455 or [email protected].  

Reference: Think Advisor (May 29, 2018) "Treasury's Crime Unit, Consumer Bureau Team up on Elder Fraud Prevention."

A Faster Way to Stop Elder Abuse

Elder abuse can occur in several different ways.  However, one of the most pernicious ways is when a person entrusted to help an elderly person, uses that trust to gain access to financial account information. The “trusted” person then commits abuse by managing an elderly person's accounts for his or her own benefit.

When this financial abuse of the elderly is discovered or suspected, it is not always easy to put a quick end to it through the legal system.  Therefore, the abuse continues for longer than it should.

To fix this problem, some New Hampshire legislators think they have come up with a solution as Seacoast Online reports in "House bill would help elder victims of financial abuse."

The idea is to create a fast track for disabled people and the elderly to get legal relief, similar to how victims of domestic violence can get protective orders. Some elderly victims do currently qualify for domestic violence protective orders but not all.

The process varies from state to state.  However, all states have some sort of process, whereby a domestic violence victim can get a quick protective order from a judge for immediate relief. Giving the same level of protection to victims of elder abuse, would speed up the process greatly.

Talk to an elder law attorney, if you have questions about what to do in your state to help victims of elder abuse.

The Petrosewicz Law Firm can assist you with your elder law needs.  Contact us today at (281) 344-9455 or [email protected].  

Reference: Seacoast Online (March 17, 2018) "House bill would help elder victims of financial abuse."