Much fraud against elderly is preventable


All of us, and I mean absolutely all of us, are the potential victims of criminal activity, including fraud. That does not mean we should be neurotic about it, but we certainly should be vigilant.

Many of us are more vulnerable than others, and thus more attractive targets. That would include the young and many of the old, especially those with diminished mental capacity, often labeled with the Latin term of dementia.

So it was not a complete surprise for me to read in the Oct. 29 Atlanta paper (page B2) a short report on how a 55-year-old man from Kennesaw had been sentenced to 10 years in prison for helping himself to $355,000 of his 85-year-old father-in-law’s money, over two years, after the father-in-law had been moved into assisted living because of dementia. The father-in-law was left with $67 in his account and ended up having to leave the assisted living home to live with relatives.

What seems to have happened there is that the father-in-law gave a power of attorney to his daughter, married to the man who is now going to prison, and in some way or other (not described in the report) her husband ended up stealing the money. By the time the daughter’s brother took a look at their father’s account he was of course stunned to find only $67.

This is a teaching moment not only about the vulnerability of older citizens, but also about how children often fail their parents by not taking a more active role in their aging parents’ lives.

One important point I need to bring out at the outset is this: when old folks are victimized out of their money, the ultimate victims are often the children who would inherit that money if it had not been stolen. It is unintelligent, as well as heartless, to let one’s old parents struggle alone. It could also be argued that it is in some way not smart for old parents to leave their estate to children who won’t help them in their final years.

It is interesting to reflect on the Kennesaw man’s case. Where did the $355,000 go? When and how was it taken? Was any of it paid back? How was the theft discovered? (Was it when the assisted living monthly charge stopped being paid for lack of funds?)

One thing is clear: if the daughter had kept proper accounting records and circulated quarterly financial reports among her siblings (possibly with the help of an accountant, at least initially, if she lacked the requisite knowledge), that could not have happened. If she could not come up with this idea first, her siblings should have pressured her to do that.

The idea of keeping financial records is not original. Income tax returns are required to be prepared every year, and that gives rise to a bunch of year-end reports from the institutions that hold people’s accounts. (One interesting aside is that embezzlers are required to report the amounts they embezzle as income on their own income tax returns.) Siblings who are interested in their old parents’ welfare and who help manage their parents’ affairs should share the information among themselves. The current term describing the sharing of information is transparency, the opposite of hiding.

We all know that older people get invited to free seminars, often accompanied by a free meal, from financial planners and even lawyers who market their services that way. The idea is to attract customers and promote the business.

All these advisers are very prompt to recommend that people write a will. But have you ever thought about who benefits from a will? It’s not the person who’s going to die. It’s those who are left, and especially those who are the beneficiaries of the will.

Looking at the expense of writing a will with proper legal assistance, many older folks fail to write one, and some of them may even use neighbors with a secretarial background and good computer equipment, or pre-printed office forms or forms from internet services. My thinking is that if the children will benefit from their old parents’ will, why don’t the children offer to pay for the will to be written competently? Aren’t they the ones who will benefit in the end?

It’s not a sign of greed for children to show an interest in protecting their parents from fraud. Conditions vary from one family to another, but by and large adult children should make an effort to help their aging parents.

Not only could adult children help their aging parents obtain proper legal services, including estate planning (which will benefit them a lot more than it will the parents), they could offer to relieve their parents of the burden of preparing the parents’ income tax returns and keeping track of the transactions involved. The children could do the work themselves or hire (and possibly pay for) someone qualified to do it.

When approached directly by an older person, lawyers encounter an ethical problem. Conversations between a lawyer and a client are confidential. Thus a lawyer is not free to contact an elderly client’s children without having information sufficient to contact them and, of course, his client’s permission to do so. Permission is not always forthcoming from fraud victims, as they often experience feelings of shame and even personal guilt from the incident.

I have personally come to the conclusion that it would be wise for lawyers dealing with elderly clients to make sure they obtain sufficient information to be able to contact the client’s adult children as well as their client’s permission to do it. That could go a long way toward preventing fraud.

The last lawyer in the world anybody would want to get in contact with, either as a victim or a criminal defendant, is a prosecutor. By then the harm has been done, and what happens next, as when some elderly person’s son-in-law is sent to prison for 10 years, won’t foster family harmony.

Much fraud against the elderly is preventable, but we have to work at it.

[Claude Y. Paquin, a Fayette county resident and former president of the Fayette County Bar Association, is a retired lawyer and actuary.]