Financial Elder Abuse and You
My mother is a surviving victim of financial elder abuse. After a lifetime of frugality and careful investing, she and my father had amassed over $2 million in a shared trust account. Today, all of their money is gone and they are approximately $450,000 in debt. How can this be possible?
In 2003, Mom and Dad sold some property and deposited over $2 million into a trust. Promptly thereafter, my brother started a business and convinced Dad to “invest.” Bro began to buy expensive cars. He bought a fancy house $860,000 house on a hill and, the following year, spent $732,000 fixing it up. (I know this because Dad kept all the receipts.)
The family believed the business was going well. For a while it was. However, as the “CEO” of the business, my brother paid himself exorbitant amounts of money, in addition to a base salary. Later, he separated from his wife and expected the small company to also finance his apartment, car insurance, etc. The company, now in financial distress, couldn’t keep up. Rather than adjust his spending habits, bro relied on his father to pick up the tab for his business, personal, and legal bills.
At this point, Dad was 82, suffering from Parkinson’s and (we learned later) the beginnings of dementia. Ever the patriarch, my father couldn’t admit that he needed help. His only son grew more aggressive, calling at odd hours to demand money. I suspect Dad got tired of dealing with the drama and would write a check simply to get some peace. Once the liquid assets were gone, Dad took out cash advances on credit cards.
It wasn’t until after my brother’s unexpected death in October that the financial abuse came to light. His company had borrowed $1.7 million. Baby brother himself had borrowed over $300,000, not including the $732,000 he spent on his house. (This post would be too long to include all else I have discovered.)
Mom never knew what was going on with her money behind her back.
Frustratingly, banks, lawyers, even Adult Protective Services (APS) claim that Dad had every right to give away all “his money.” The financial adviser who watched all this unfold says the same. I continue to insist that it wasn’t just “his money” and “his decision. It was THEIR money and should have been THEIR decision how to spend it.
Why couldn’t the financial adviser have notified Mom about some of the withdrawals? Why couldn’t the financial adviser, who is legally mandated in California to report suspected financial elder abuse, had called APS? If Mom had been the one calling to withdraw $20-50,000 at a time from their shared account, I’ll bet the financial adviser would have asked Dad for his approval. But, I will never know for sure.
Thankfully, Mom (90 with global aphasia after a stroke), and Dad (84 with Parkinson’s and dementia) have long-term care (LTC) insurance which pays for their in-home care. For now, they are both safe, healthy, and, (thanks to some short term memory loss), happy.
I wish baby brother were here to help clean up the financial disaster he left behind. Instead, my sister and I must manage their finances as best we can while working full-time. We dread the possible future of either paying for our parents’ care once the LTC benefits run out or, worse – putting Mom or Dad in a state-run nursing home.
Either option is something our parents worked heard to avoid. Financial elder abuse comes in all shapes and sizes. No matter how you slice it, my mom was a victim. Be sure your parents are safe. I’ll be writing lots more about this topic in the future.