Tax Tip of the Week | Predators - Elder Abuse

We all know one or more elders that have been preyed on in one fashion or another.  It happens all the time.  Some attorneys even specialize in defending their elderly clientele against these predators, who come in all shapes and sizes.  Sometimes, a predator is a stranger who becomes embedded in the senior’s life in the form of “a new caregiver, a friend, a romantic interest or even as a financial adviser.”  Telemarketers and sales people also often take advantage of the elderly.  The potential list of predators goes on and on. 
               
Elder abuse only stops when someone takes action to help.  The elderly should be advised to counsel with family members and attorneys.   
               
Senior clients may also be advised to provide their accountants with written consent and contact information for a family member and/or a “predesignated adult” to contact in case the accountant suspects any foul play. 
               
Many resources are available for reporting senior abuse.  One option is the National Center on Elder Abuse (https://eldercare.acl.gov/Public/Index.aspx).
               
Some of the information and ideas above were taken from a CPA Voice article written by Randy Werner.  She is a loss prevention executive with CAMICO working on their loss prevention hotline.
 
                                                       -Mark Bradstreet
 
CPAs should recognize the signs of elder abuse

The elderly population in the U.S. (those 65 and older) is projected to grow to 80 million by the year 2050, and the incidence of elder abuse, including the hard-to-detect financial and material exploitation perpetrated against elders, is also expected to grow.  Financial neglect, financial exploitation and health care fraud are among the more egregious abuse in this category of elder abuse.

As trusted financial advisers, many CPAs have an intimate knowledge of their clients’ finances, business matters and family dynamics.  CPAs are often able to prevent problems, detect them and render assistance when such concerns are suspected.

Furthermore, in the State of Ohio, CPAs are mandatory reporters of elder abuse under Ohio Revised Code Section 5101.63.  Therefore, it is important to know the warning signs of elder financial abuse and what you can do to act on behalf of your clients when necessary.

Signs of exploitation

Elder abuse demographics indicate that most victims are female, most perpetrators are male, often an adult child, and that spouses and other family members are often abusive.  CAMICO policyholders have reported abuse of both male and female victims.

One of the more common and prominent warning signs is isolation.  A common scenario is one where the abuser controls the elder’s social life, telling callers or visitors that the elder does not want to talk with them, or providing an excuse that prevents the elder from speaking with callers or visitors.  Later the abuser feigns disappointment and empathy when telling the elder that no one has called or visited, and the abuser is the only one that cares about the elder.

Another common tactic is to tell the elder that when others ask questions, their intent is to identify grounds for placing the elder in a nursing facility.  This tactic often intimidates the elder into avoiding contact with others, including those trying to help.  Signs of intimidation or threats include unusually submissive behavior, fear of the caregiver, withdrawn behavior or anxiety about personal finances and other issues.

While less common, some elder abuse is perpetrated by strangers who insinuate themselves into the senior’s life as a new caregiver, a friend, a romantic interest, or even as a financial “adviser.”  Often, seniors who feel isolated in retirement are vulnerable to this approach.

Elders who have few contacts with the outside world may also be vulnerable to telemarketers and devious salespeople.  Such sales “professionals” are frequently able to persuade elders to purchase inappropriate products and risky investments that promise unrealistic returns.  Another common scheme is to convince seniors to purchase variable annuities with high commissions to the seller and high surrender charges causing the elder’s funds to be illiquid and unavailable.

Other signs and symptoms of exploitation include, but are not limited to:

Lifestyle/care

• The sudden appearance of previously uninvolved relatives claiming their rights to an elder’s affairs and possessions.
• Unpaid bills, missed appointments, or substandard care being provided despite the availability of adequate financial resources.
• Unnecessary services or goods (e.g., large appliances, expensive jewelry).
• Not providing needed medical aids such as glasses, walkers, dentures, hearing aids or medications.
• Pharmacy or grocery receipts for purchases inconsistent with the client's prescriptions or lifestyle (e.g., alcohol for a nondrinker).
• Significant changes in spending patterns.
• Dramatic changes in attitude such as agitation, violence, or rocking back and forth.

Banking/credit 

• Unexplained disappearance of funds or valuable possessions.
• Sudden changes in a bank account or banking practices, including unexplained withdrawals of large sums of money by someone accompanying the elder.
• Adding authorized signers on bank and other financial accounts.
• Use of the senior's ATM card by someone else, especially when the senior is unable to leave home.
• Credit card statements reflecting increased or unusual activity.
• Increase in the number and amount of credit card accounts.
• Checks used out of numerical sequence.
• Addresses for bank or credit card statements changed to an address other than the elder's.

 
Legal/property

• Changes to a power of attorney from a long-time friend or family member to a someone else.
• Abrupt or unexpected changes in beneficiaries or provisions in a will, trust or other legal or financial documents.
• Unexplained sudden transfer of assets.
• Changes in title to property.
• Mortgage refinanced, accompanied by an unexpected cash-out.
• Discovery of an elder's signature being forged for financial transactions or for title to possessions.

 
How can CPAs help?
 
Elder abuse will continue unless someone takes action to help. CPAs should encourage their clients to explain their dispositive and gift-planning desires to all family members, particularly when there has been a second marriage.
 
Emphasize that planning now will help avoid ambiguity about their future desires. Encourage clients to consider arranging a living will or other type of medical directive, such as an Advance Health Care Directive, to make their health care desires known in the event someone must intercede on their behalf.
 
CPAs should encourage their older clients to consider consulting with family members and legal counsel regarding the options for assigning financial guardians or power of attorney and the timing of doing so. If the client has assigned power of attorney to someone, ask the client for the person's name and contact information in the event illness or disability necessitates contacting that person. CPAs should consider suggesting that their more senior clients provide them with contact information and written consent to contact a predesignated responsible adult or family member in the event the CPA suspects elder abuse. Revisit this consent regularly before elder abuse is suspected.
 
There are many resources for reporting and dealing with elder abuse. One resource, the National Center on Elder Abuse, a program of the U.S. Administration on Aging (https:// eldercare.acl.gov/Public/lndex.aspx), maintains and provides access to a database of contact information for county Adult Protective Services agencies and hotlines at: https://ncea.acl.gov/ ("Suspect Abuse" tab).
 
Financial exploitation is a crime, and the laws on reporting suspected elder abuse vary by state. CPAs should remain informed, and if they are concerned that a senior client is being abused, they should seek legal help on how to proceed.

Thank you for all of your questions, comments and suggestions for future topics. As always, they are much appreciated. We may be reached in our Dayton office at 937-436-3133 or in our Xenia office at 937-372-3504. Or, visit our website.
 
Credit Given to:  Randy Werner with CPA Voice published in the November/December issue.

Thank you for all of your questions, comments and suggestions for future topics. As always, they are much appreciated. We also welcome and appreciate anyone who wishes to write a Tax Tip of the Week for our consideration. We may be reached in our Dayton office at 937-436-3133 or in our Xenia office at 937-372-3504. Or, visit our website.

This Week’s Author, Mark Bradstreet

-until next week.