Beware of Financial Abuse of Seniors in the Family | Family finances
Financial abuse, also known as economic abuse, is a growing problem in America – and the perpetrators might be closer than you think. The aging of the population is a prime target, given the wealth they have accumulated over the course of their lives and their cognitive capacities, which could deteriorate. Unfortunately, the facts about the number of cases of elder abuse, and in particular financial abuse of the elderly, are unclear. Part of this is because people are less likely to report them, whether out of denial, embarrassment, or ignorance.
But the data available is alarming: The National Council on Aging reports that one in 10 Americans aged 60 and over has experienced some form of abuse, with estimates that up to 5 million older people are abused each year. Financial abuse of the elderly is a huge problem in itself, with an equally huge range of costs reported – from a whopping $ 2.9 billion, according to a 2011 MetLife report, to $ 36.5 billion, according to a 2015 study from financial services company True Link.
And often the abuser is well known to the victim. The MetLife study reports that 34 percent of reported incidents were perpetrated by family, friends, neighbors or caregivers. The National Center on Elder Abuse reports a much higher estimate with 57.9% of senior financial abusers being family members, 16.9% being friends and neighbors and 14.9% being home help.
“You hear it more and more often,” says Beth Lynch, certified financial planner and financial consultant with the wealth management firm Fort Pitt Capital Group, based in Pittsburgh. “It’s people who are close to you, family or friends, someone you know and trust, who benefit.”
In the case of one of Lynch’s clients, the abuser was a trusted friend. The client had lost the ability to write checks and needed help managing her bank accounts. Her husband was deceased and she had no children, so she turned to her friend for help. It was only when the friend asked her to change the beneficiaries on his will that she suspected something was wrong. “It was the red flag for her,” says Lynch. “We later found out that this very trustworthy friend who was helping her was actually stealing her… and writing checks herself.”
Sometimes, however, the abuse may not be so clear. Dr Kathy McCoy, psychotherapist and author of “We Don’t Talk Anymore: Healing After Parents and Their Adult Children Become Estranged,” explains a case in which a patient’s son essentially bullied him out of his boarding school. When the single mother retired at almost 70, she received a lump sum. And her son convinced her to use the money to buy him and his wife a house, new furniture, a car and more. With very little going for her, the over-generous mother found herself forced to return to work for another decade (which she was lucky enough to be able to do).
“Kids don’t always want to be financially abusive, but it can become quite disastrous for some parents who will be talked to or who will put themselves at risk by giving too much,” McCoy said. “It becomes abusive when the adult child asks or demands money without considering the impact it might have on the parent. Some parents want to give so badly that they would give their last dollar to their child. Adult children should therefore be aware and think before asking. “
Parent-child relationships can become so complex over the years that financial problems can even lead to physical abuse. McCoy refers to research by sociologist Karl Pillemer, which found that adult children who were violent against their parents also tended to rely heavily on these parents financially, often relying on them for housing and transportation, as well as for financial assistance. Typically, already adversarial relationships can turn to physical abuse after the parent has gone through a major transition, such as retirement or the death of a spouse. The first situation could cause a parent to be less financially generous with a dependent child. The latter could lead a parent to develop a new emotional dependence on an adult child. Either change could trigger an adult child with certain predispositions to violence.
Of course, this is an extreme and unusual form of financial abuse. “Cases of children who really beat a parent are not as common as children who recklessly ask for money parents really shouldn’t lend,” McCoy said. “Adult children need to understand how finances change for many people as they approach or retire, and parents need to stop and think about what they can really afford to do to help their children.”
One way to avoid any of these problems is to develop a financial plan as soon as possible, including your wishes as you get older and if you become disabled. “It’s really important to do this while you’re sane before you actually need it,” says Lynch. “Start this planning as early as possible. “
You should also have a team in place that knows your plan and can be trusted to play a role in monitoring it. Keeping several people – whether they’re your adult children, other relatives and friends, or financial professionals – up to date with your plans is a system of checks and balances.
This is what helped Lynch’s client after her experience of financial abuse. “She couldn’t believe someone so close had betrayed her, and she was like, ‘How can I trust someone else?’” Lynch said. “The greatest thing [to restore her trust] made sure there were more than a pair of eyes on everything, each of us checking each other out. “
If you’re worried that you’re already in a problematic situation, “don’t shut up,” says Megan Ford, a financial therapist at the University of Georgia and former president of the Financial Therapy Association, a professional group for this emerging field. finances. “Try speaking with someone you trust in your life or seek outside support who can offer you professional help and advice. And if you fear for your safety, or certainly if you are in imminent danger, contact the authorities. “
For emergencies that are not life threatening, you can call the Eldercare Locator hotline at 1-800-677-1116 or the VictimConnect hotline at 1-855-4VICTIM. You can also visit the website of the Ministry of Justice Seniors Justice Initiative for resources specifically designed to help victims of elder abuse.