Recently, my grandmother received a phone call from a stranger claiming to be me. He invented a story, telling her that my brother and I were in jail for drunk driving and asked her to wire bail money (discreetly of course) so that our mother would not find out. The caller knew our names, birthdays and other information sufficient to establish a basic rapport. He utilized a blocked phone number. Fortunately my grandmother remained true to form and was inclined to leave her grandchildren in jail rather than financially contribute to their bad behavior. My personal anecdote highlights a growing concern; financial exploitation of the elderly is a serious social problem that requires long-term solutions in the form of increased public education as well as better legal and societal safeguards. In addition, common estate planning tools can do much to reduce risk factors for serious financial abuse of the elderly by their caregivers and fiduciaries. With proper education and careful implementation the durable power of attorney and the revocable trust can provide security for an elderly client while still preserving as much independence as possible during advancing age and incapacity.
Americans are not getting any younger. In 1900, persons aged 65 and older made up 4% of the total U.S. population. By 2011 that number jumped to 13.3%. From the year 2000 to 2011 the U.S. population under the age of 65 increased by 9.4% whereas the population over 65 increased 18%. This trend is not slowing down; the U.S. Department of Health and Human Services projects that by 2040 21.4% of the U.S. population will be over the age of 65. A person in the United States who reaches 65 today can look forward to an average of 20.4 additional years.
While Americans enjoy increasingly longer lives; this miracle of modern medicine is mirrored by an ugly reflection in the form of financial exploitation. Americans over the age of 65 lose an estimated $2.9 billion to financial abuse annually. It is not surprising that the elderly are considered choice targets for financial abuse given that persons over the age of 50 control over 70 percent of the wealth in the United States. Individual increases in susceptibility due to loss of physical and/or mental capacity, loss of friends and family, social isolation, and dependence on family or commercial care providers further exacerbates the vulnerability of the elderly as a class.
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