How families rip off grandma

By The Christian Science Monitor

No statistics measure the scope of elder financial abuse and exploitation, but professionals who work with older people say the problem is on the rise as the ranks of seniors grow. They also emphasize that it happens at all social and economic levels.

"Financial abuse and exploitation are among the fastest growing forms of elder abuse nationally as measured by different studies and reports," says Bob Blancato, national coordinator of the Elder Justice Coalition in Washington, D.C. He expects the problem to intensify, noting that about 70% of wealth in this country is controlled by people age 50 and older.

Financial exploitation takes many forms. Those include taking money or property, forging an older person's signature and getting an older person to sign a deed or will through deception or coercion.

Most cases of financial exploitation involve family members. "Usually it's someone who is dependent on Mom and Dad," says Chris Johnson, an attorney in Pasadena, Calif., who specializes in trusts and wills. "They need that big pot of money. They're unemployable, or didn't try to work, or have substance abuse problems. They end up isolating Mom and Dad. The other kids are not sure what's going on. It's easy to transfer the house to their name or take out mortgages on the house. They might use some of the money for Mom and Dad, but they use some for themselves, too."

He tells of one case where a sibling siphoned money from his parents' bank accounts to play Internet poker. "He was not very good at it and was dropping $3,000 a day," Johnson says. Ultimately he spent $250,000 on poker. "If other kids live in another state, they're not going to know. They may be suspicious -- he doesn't have a job, is driving a new car, saying he can't work because he's devoting all his time to taking care of Mom or Dad."

Increased longevity is contributing to the problem.

"Dramas are playing out in the courts as children imbued with a sense of entitlement grow increasingly impatient while awaiting their inheritance," says Joline Godfrey, president of The Independent Means, a financial education company in Santa Barbara, Calif. "If you are wealthy and tying up your children's or grandchildren's perceived 'good life,' there could be consequences."

Baby boomers' eagerness to gain access to their parents' assets can lead to exploitation, suggests Frank Congemi, a financial gerontologist in Deerfield Beach, Fla. "Maybe they haven't done a good job of saving like their parents have, and they're coveting their parents' goods," he says. "Or they may not have had what they consider the best childhood, and this is their time to get even."

Trouble often starts when an older person is isolated. "A lot of people live very distant from their parents, and they don't have day-to-day contact," says Pat Drea of Charlotte, N.C., a longtime elder-care specialist. "If somebody (who lives near their parent) is going to be a predator, they may be relatively undetected."

Problems can also develop when a retiree is not familiar with financial matters.

"A lot of seniors don't realize the value of their assets," says Drea. "They may have lived in the same place for a long time. What was once a $50,000 house may be worth $300,000 or half a million. They're totally unaware of that. It's also quite common that an unemployed child may have unrecorded loans from the parents -- $10,000 here, $20,000 there."

Sometimes the predator is an outsider. Bernard Krooks, a lawyer and member of the National Academy of Elder Law Attorneys, had a case involving a woman who lived in a Brooklyn apartment. Her children lived out of state.

"The next-door neighbor suddenly started taking an interest in her -- driving her to the doctor, picking up her medication, and taking her grocery shopping," he says. When the bank noticed a pattern of systematic withdrawal from her account -- $400 to $500 a week -- it notified the district attorney's office. An investigation revealed that the money was going to the "caregiver." The court appointed a guardian who had authority to seek return of the funds from the neighbor who stole them.

Krooks calls cases like this the tip of the iceberg. "What's going on is usually not publicized by seniors because they fear retribution," he says.

Continued: Strained family relationships

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