Economic Woes Threaten The Elderly
With the current economic downfall, the elderly face an increased threat of losing their assets to unscrupulous family members. Elder financial abuse cases will most likely rise as adult children, facing job loss, foreclosure and repossession, take advantage of their parents through the use of financial powers of attorney. The following scenario can occur in any city and state, including my workplace in Riverside, California:
Mom is in her eighties, widowed and lives alone in her home that she has owned free and clear for many years. Her son has just been laid off from his job, and his wife’s hours were cut in half. They were already in debt, behind in credit card payments and recently received notice that they are seriously past due on car payments and repossession may occur.
Frantic, this couple discusses their options and concludes that they will soon lose their home and transportation unless something is done. They see no way out.
The couple now looks at mom’s situation. They know that mom’s home, even with the real estate market crisis, has $300,000 equity. She has $40,000 in savings and her social security and small pension are enough to pay all of her modest monthly bills. They now see a way out of their financial collapse and devise a scheme to have mom sign a financial power of attorney.
Son speaks to mom about the need for her to sign a power of attorney so that son can protect her assets if anything happens to her. He scares her into believing that people may be out to get her, and signing a power of attorney will make sure that no one can manipulate or unduly influence her.
The couple chooses a time when mom, already suffering from the beginning stages of Alzheimer’s disease, is most vulnerable. Son knows that mom takes a long nap during the early afternoon, and arranges for a notary public to meet at mom’s home during this time. Son awakens mom and, while she is still groggy, has her sign the power of attorney which names son as the agent. Before nightfall, mom has already forgotten the incident.
The next morning, the couple takes the power of attorney, goes to mom’s bank, and withdraws $10,000 – just enough to bring their home out of foreclosure, bring their credit cards and car payments current, and have a little bit of money to take a three day Vegas trip.
Unfortunately, once the couple has tasted this free money, it’s hard to stop. Son now wants to buy a boat and wife wants a new car. The couple hasn’t been too motivated to seek new employment because all of their bills are now being paid and they have extra spending cash. Soon, they have depleted mom’s savings account.
They now turn to mom’s house and, using the power of attorney, take out a $100,000 loan. They figure they’ll use $50,000 to make nice down payments on a new boat and car, and use the other $50,000 to make the mortgage payments on mom’s house. You can see where this will soon lead.
If this scam is uncovered early enough, an elder law attorney can assist to stop the financial bleeding and create safeguards to prevent any further loss to mom’s estate. Particularly in these tough economic times, it is crucial to keep a sharp eye out to look for signs of financial abuse being perpetrated through the use of powers of attorney.
If you or a loved one has been the victim of such financial abuse, or need help in any other area of elder or senior law issues, then pick up the phone and call. We’re here to help. The initial telephone consultation is always free.
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