Nearly 60% of instances of mistreatment involve monetary exploitation; what's an adviser to do?
The tabloid newspapers and bloggers like nothing more than a messy fight involving a wealthy family.
The 2009 trial of Anthony Marshall, the son of Brooke Astor, heiress to much of the Astor family fortune, was daily fodder for New York newspapers. So were the attempts by the daughter of Liliane Bettencourt, heiress of the huge L'Oreal fortune, to petition a court for guardianship of her mother. Ms. Bettencourt, later diagnosed with Alzheimer's disease, was intent on making her photographer sole heir of her $1.4 billion estate.
The highly publicized fights are the most obvious examples of a growing epidemic of elder abuse in the United States, said Cameron DeGuerre, an attorney with Peck Bloom LLC. Ms. DeGuerre, who focuses on trust and probate litigation, gave advisers at the National Association of Personal Financial Advisors conference in Chicago an overview of the problem.
Every year, somewhere between 500,000 and 5 million elders are abused, neglected or exploited by others. The estimated range of such crimes is wide, said Ms. DeGuerre, because the abuse is hard to define and because in many cases, it goes unreported.
“Elders can be afraid to report abuse, for a variety of reasons,” she said. “In many cases, they may depend on the abuser and fear reprisals from them. They may be afraid of being placed in a nursing home or dread the stigma of domestic violence.”
Indeed, in 78% of elder-abuse cases, the abuser is either a spouse, a child or another relative of the individual, according to 2010 statistics from the Illinois Department on Aging. Mickey Rooney, for example, said he had food and water withheld from him by his stepson, who allegedly stole over $400,000 from the actor.
Financial exploitation is the most-often-reported type of abuse (58%) and is often linked to emotional abuse. In many cases, the abuse is committed by a family member who has been given the power of attorney or been appointed guardian for the individual.
“If a family member takes offense at not being appointed guardian or being given power of attorney, beware,” Ms. DeGuerre said.
For financial advisers who may suspect a client is losing their capacity to make decisions for themselves, they should communicate their concerns to family members and/or friends of the individual, as well as legal representatives, Ms. DeGuerre said. If they suspect abuse is occurring, the situation can be doubly frustrating, as action on their part could result in their dismissal by a family member or guardian.
With the 77 million baby boomers now entering retirement age, the situation is likely to get a lot worse.
