By Cynthia Furlong Reynolds

““Our mother’s financial situation is a nightmare,” says Betsy Jones, one of Elizabeth’s four daughters. “Dad always took care of the finances, and Mom never worried about anything. But I have. I’ve spent too many sleepless nights worrying about the way my sister is misusing Mom’s funds and jeopardizing Mom’s future wellbeing.”

Like others who reported stories of the financial abuse of elderly family members, she asked for anonymity.

Last year, Betsy and two sisters discovered that their youngest sister, Joan, was using their 93-year-old mother’s savings as her personal bank account, siphoning off what might be more than $230,000—at their best estimation. And then they learned that Joan had convinced their mother, who has mild dementia, to sign a new will that removed Betsy’s power of attorney and made Joan sole medical and legal power of attorney, as well as sole heir.

The three sisters begged Joan to tell them what was happening—“We said we’d help her with whatever she was dealing with”—but Joan refused. After many discussions and a closed-case from Adult Protective Services, the sisters felt they had only one option: report Joan’s financial misdeeds to the police and show financial proof. After four months, they have just been informed that the investigation could take up to two years.

“Meanwhile, Joan has sold Mom’s condo and has $400,000 more to embezzle,” Betsy says. “The three of us are powerless. We’re not worried about any inheritance. We’re worried Mom won’t have enough money to live on.”

As the Jones family is learning, financial abuse can be difficult to detect, report, and investigate.

The Great Wealth Transfer has begun. According to Forbes Magazine, America’s Silent Generation—parents of Baby Boomers—has, or will, pass down more than $15 trillion in assets during this decade. And Baby Boomers—the generation born between 1944 and 1964—are expected to bequeath more than $68 trillion to their heirs in the coming years.

Financial abuse occurs “when a family member or caregiver illegally or improperly uses

an elder’s money or belongings for their own personal gain,” explains Linda Kaare, who was a

pioneer in the field of senior law when she launched her practice in 1992.

Although many cases go unreported, the National Council on Aging suggests that the financial exploitation of the elderly may amount to a staggering $36.5 billion annually. And that may just be the tip of the iceberg. Baby Boomers hold half of the nation’s $140 trillion in wealth, divided among equities, real estate, private businesses, and other assets—“and Baby Boomers are not always aware of what could happen to their assets in the future,” points out Jonathan Imber, president of Imber Wealth in Ann Arbor.

Even minor memory loss and a sense of vulnerability can make seniors targets for financial exploitation. According to the Alzheimer’s Association, nearly seven million Americans suffer from at least moderate cognitive issues, and more than eleven million Americans are caregiving seniors. Meanwhile, Baby Boomers are living longer than any previous generation. The costs of their care in post-retirement years can be staggering. Meanwhile, their children and grandchildren may be facing challenges their parents never did: crippling student debt and the high homebuying costs, among others.

“This is the best of times and the worst of times in terms of personal finances,” Imber says.

Unfortunately, with great wealth come great opportunities for financial exploitation. Forbes Advisor reports that one in ten Americans over the age of sixty has experienced abuse—and that includes financial abuse. The numbers are even higher for Black Baby Boomers (23% versus 8.4% for others).

The names change, the details change, but the bottom line is jeopardizing the future of people when they are most vulnerable.

“The worst part of all this is the betrayal. You trust your relatives to do what is right when it comes to the physical and financial care of your parents. So, when you discover that a family member has been exploiting them, it’s not only shocking and painful, it’s also embarrassing,” Anne Smith says.

Anne’s mother-in-law allowed one son’s ex-wife to move into her Colorado home for companionship and caregiving. “Lynn was struggling financially, and Marion told us, ’How can I say no when she’s the mother of my grandchildren?’” Anne explains. She and her husband Steve live in Michigan and were working full time, so that seemed like a good solution for everyone. “Now Steve’s mother would have company, care, and transportation—or so we thought,” Anne says.

Unbeknownst to them, Lynn fell victim to scammers—twice. She convinced Marion to send $25,000 to a man claiming to be rescuing animals in Malaysia and $35,000 to a man claiming to be a Nigerian minister operating a children’s mission. Both promised these would be short-term loans, paid back with interest. Marion’s bank officials didn’t question the large sums.

The rest is history. No refunds, no interest, and no further contact with either the Malaysian vet or Nigerian minister.

Months later, when Marion’s roof was damaged by hail, Steve flew to Colorado to discover why she didn’t have funds to fix it. He learned not only about the scams, but also discovered $11,000 in checks Lynn had forged. “We’re not exactly sure how much else Lynn took—between $75,000 and $100,000,” Anne says. “Meanwhile, there had been no caregiving for Marion. Lynn was too concerned with her own affairs.”

Steve called the police. Lynn was arrested and prosecuted for the forged checks. The judge gave her a suspended sentence, put her on probation, and ordered her to pay Marion back. But no one hires a bookkeeper with a criminal record, so that didn’t happen.

***

“The financial exploitation of seniors has happened throughout history, but I’ve seen the number of instances grow exponentially,” Kaare says. “There’s so much misinformation going around about Medicare, wills, trusts, guardianship, and power of attorney. This is a critical time for seniors to make their wishes known—and for assessing what they have, what they’ll need for the future, and what they want to leave to others.”

Even when they do, they can set themselves up for trouble. Take the case of industrialist Henry Brown, 85, who amassed a “very sizeable fortune” before retiring. The cancer survivor suffers from mild dementia and has 24/7 in-home care. His three daughters, who share POA, are entangled in costly court cases to determine their father’s fate.

“My sister Shirley has never made wise financial decisions,” Emily says. “Despite very generous annual checks from Dad, she wants her inheritance now. She’s been trying to convince Dad that he has no quality of life, urging him to go off all his medications and go into hospice. When that doesn’t work, she fires caregivers, trying to get someone who will listen to her rather than to me. My father was a very smart businessman, but he failed to choose his POA well, and we’re all paying the cost.”

The choice of the person who will have power of attorney is absolutely critical—”even more important than the will, because that person determines how an individual lives,” Kaare says. She suggests that her clients take “a close, honest look at who is best suited to advocate for you if you become incapacitated.” She recommends that a lawyer speak one-on-one with the client, asking who has the necessary skills to handle the client’s finances in the future, who pays their bills on time, who is willing to undertake the responsibilities, and who is completely honest.

“No one should just sign papers with lawyers and financial planners and believe all is well,” Imber says. “Everyone should keep an eye on the markets and report any changes in their lives (marriages, the death of a spouse or children, medical concerns, changes in the life of their POA), which can affect their future. Meet regularly with your financial planner to review portfolios and financial goals. We look at age projections and the ways the markets are trading, to make sure their present and future anticipated needs are addressed.

“We can safeguard a client’s finances and future plan, but,” Imber adds, “financial

planners can’t tell them who to pick for their power of attorney or medical power of attorney.”

***

“The people being exploited often trust their chosen family members completely,” Kaare says, “so, getting them to realize that someone is taking advantage can be heartbreaking. And even more of a challenge is finding proof of exploitation—accessing financial records, bank statements, and financial data—if you’re not the POA.”

The Consumer Financial Protection Bureau (CFPB) studies reveal that grown children are the most common abusers, but caregivers, nursing homes, and assisted living facilities can be culpable. The American Association of Retired Persons (AARP) warns seniors to beware of new friends who seem possessive and controlling. Both outsiders—or family members—may steal checkbooks or credit cards, as the Smiths learned. As in the Jones case, a senior might be tricked into signing forms that transfer ownership of investments, bank accounts, and/or property. Countless online scams also rob unsuspecting, well-intentioned, and lonely people.

However, National Center on Elder Abuse suggests that only one in 24 cases of elder abuse are reported to authorities. The NCEA recommends that if you suspect abuse—even if your suspicions are unconfirmed by financial records, report it immediately.

How?

“Call the police,” Sergeant Mark Pulford of the Ann Arbor Police Department says bluntly. “You’ll need to contact the police in the jurisdiction where the person lives. And when you do, have corroborating evidence—financial statements, bank statements, anything that will prove your case.” He estimates that police investigations can last from a few months to two years.

Kaare also recommends that family members or close friends concerned about exploitation contact the state’s Long-Term Care Ombudsman (AgeWays, 586-980-9303) and Adult Protective Services (Michigan hotline: 855-444-3911)). The Justice Department’s Office of Victims of Crimes also has an elder fraud hotline (833-372-8311).

Families can be torn apart as heirs argue about housing, healthcare options, and inheritances.

“Our family will never be the same again,” Betsy Jones says. “We always loved and trusted each other. We never dreamed we’d have to go to the police in order to protect our mother from one of her daughters.”

Anne Smith adds, “There’s a lesson for all of us in these stories. As adults, we should take the time and care to work with professionals who can ensure that our futures will be well protected and secure. As the children of aging adults, we need to keep close tabs on their finances and their personal welfare, despite our busy lives.

“I strongly recommend that families talk about their money often and in detail. Everyone should express their wishes, needs, and future plans often and openly, so there are no secrets or future disasters. If Steve and I had done that, we could have avoided serious consequences.”