Securing elder finances
By Joel Dresang
I got a call from an assisted living facility where my relative is staying. A nurse informed me that my relative reported his wallet missing. She asked if I knew where it might be. She assured me that staff was turning the place upside down to look for it.
I trust the place. I was glad the nurse had called me. Even so, I was apprehensive. I don’t expect much cash was in the wallet, and I’m pretty sure it didn’t contain a credit card. But I was worried that it held my relative’s Social Security card and his driver’s license. In the wrong hands, those two cards could be someone’s ticket to identity theft.
A crime wave is rippling through the ranks of America’s retired citizens.
Various reports call elder financial abuse “an epidemic” and “the crime of the 21st century.” Private studies on the annual loss to financial exploitation of older Americans ranges from nearly $3 billion to more than $30 billion. The range is so vast because law enforcers have no uniform way to track how much retirees lose to fraud – in part because the crime victims are reluctant or unable to report it.
In the 20th century, robbers were said to hit banks because “that’s where the money is.” A similar opportunity now is developing around older Americans. Among the reasons:
- Their numbers are growing. Every day another 10,000 Americans turn 65 .
- Peak wealth typically occurs in one’s golden years.
- Cognitive impairments accompany aging, often limiting the financial capacity of potential preys.
- Whether from ignorance, shame or codependency, victims often do not report the crimes, allowing criminals to continue.
- Too often, the criminals are individuals supposed to be assisting older adults, including family members, caregivers and unscrupulous service professionals.
Even though elder fraud is a burgeoning target for criminals, efforts to combat it are disjointed. Most fraud protection or follow-up is on the local or state level, dispersed across agencies engaged in social services, criminal justice and consumer protection. Resources have not kept pace with the volume and complexity of criminal activity.
Frequently asked questions about finances for older Americans, from the Consumer Financial Protection Bureau
To locate local resources for older adults, go to www.eldercare.gov or call 800-677-1116
Moving on, sorting out, Lisa Lewitzke shares useful tips from the experience of her parents moving out of their house.
Plans to consider, Alexis Brown offers advice on arranging family finances.
The National Conference of State Legislatures forecasts elder financial abuse to be one of the top issues of 2017. The American Bankers Association lists 39 states in 2015 with statutes already addressing such crimes.
On the federal level, agencies involved in the issue include the Securities and Exchange Commission, the Consumer Financial Protection Bureau, the Department of Health and Human Services, the Federal Trade Commission, the Department of Treasury, the Postal Inspection Service and the Department of Justice.
The Government Accountability Office, a nonpartisan investigative arm of Congress, has urged “for a more coordinated and deliberate approach governmentwide,” noting that states lack the expertise, collaboration and data to fight financial crimes against older citizens.
Like most personal financial crimes, though, these can be prevented through common sense and vigilance. It’s another reason retirees need to arrange their finances, communicate their wishes and deputize trustworthy support so they can enjoy the fruits of their labors rather than obsess over them. Specifically:
- Arrange – Organize information on all your financial assets. Include contact information for each account. Review designations for beneficiaries.
- Communicate – Determine how you want your investments and estate managed. Formalize it in a will, but also make your wishes known to your offspring and advisors so they can support you.
- Deputize – Not only are more heads better one, but trying to do everything yourself can cause stress when you should be relaxing more. Allowing view-only access to financial accounts will let others help you monitor monthly statements for suspicious activity. Consider having more than one individual watching out for you. Provide for your eventual decline by setting up powers of attorney for your assets and health care.
The day after the call from the nursing facility, I visited my relative. Somehow, his wallet got lodged in his wheelchair. He agreed to give me his Medicare card – which displays his Social Security number – for safe keeping.
Since my own encounter with identity theft, I have recommended freezing my relative’s credit through the three credit bureaus.
With a freeze, the credit bureaus tell a lender not to do business with anyone who claims to be the person whose account is frozen. You have to pay for the freeze (for Wisconsin residents, $10 to each of the three bureaus). You also have to pay to suspend the freeze – if you subsequently apply for credit yourself – and then to resume the freeze again afterward.
My relative has no plans to borrow money. The siblings who share power of attorney on his behalf agreed that freezing his credit is worthwhile.
The bottom line is our reassurance that he is in a good place. People who care about him – family members and caregivers – have got his back so that concerns about his finances aren’t keeping him awake at night. By having a plan and keeping in touch – with him and one another, we all sleep better.
Joel Dresang is vice president-communications at Landaas & Company.
(initially posted Jan. 20, 2017)