Tom Chancellor
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Saving Your Elderly Parents from Financial Fraud: Talk to them about their money (and those who could take it away).

9/30/2016

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​Elders are financially defrauded daily in this country. Just a tiny percentage of these crimes are
made public. In fact, the National Adult Protective Services Association (NAPSA) estimates that
only 1 in 44 cases of elder financial abuse are reported. A recent NAPSA study found that 11%
of seniors had been financially “abused, neglected or exploited” within the past year. 1

Friends, family and caregivers perpetrate much of this financial abuse. They commit 90% of it,
NAPSA estimates. Major damage may result to an elder’s finances and physical and mental
health: victims of elder financial exploitation are four times more likely to go into a nursing
home than their peers, and nearly 10% of the victims end up relying on Medicaid. 1

Frauds range from big scams to little schemes. You likely know about the common ones: the
grandparent scam (“Grandpa, I’m in jail in _____ and I need $___ to make bail”), the utility
company scam (one criminal keeps the elder busy in the yard as the other burglarizes their
home), the lottery scam (a huge prize awaits, the elder need only pay a few thousand upfront
to take care of associated taxes). Others are subtler: home health aides severely overcharging
an elder for their services, relatives or caregivers using a financial power of attorney to draw
down an elder’s bank or investment accounts.

Talking about all this may help to prevent it. Perhaps the best way to introduce the topic is by
referring to what happened to someone else – a story coming up on the news or in the paper,
an article online. AARP’s Fraud Watch Network emails a monthly newsletter highlighting
common scams; it also maintains a map showing per-state occurrences of such crimes. 2

A 2014 Allianz Life survey discovered something very encouraging. Seniors who have talked
about the issue of financial exploitation with others seem less likely to succumb to it, especially
seniors who have talked about such risks in the company of a financial professional. 2

The insurer asked more than 2,000 Americans about their awareness of financial fraud – men
and women aged 65+, and select family members and friends aged 40-64. It found that 97% of
seniors who talked about finances with a hired professional were likely to check their monthly
credit and financial statements, while only 84% of those who talked about their finances with
no one were likely to do so. It also found that 93% of seniors who communicated with a hired
professional were likely to refrain from signing a financial document they could not fully
understand; that was true for just 82% of seniors who had never addressed financial topics in
the company of professionals, friends or family. 2

Another pair of examples: 85% of elders who discussed personal finances consistently shredded
or destroyed sensitive financial paperwork while just 69% of those who refrained from such
discussion did. Thirty-seven percent of seniors who talked about their finances with a
professional were also more likely to have a co-signer for their bank accounts, as opposed to
14% of those who were handling their personal finances solo. 2

Have the conversation; have a look at Mom or Dad’s financial situation. It is only prudent to
do so. The National Center on Elder Abuse says that the average financial fraud perpetrated on
an elder siphons $30,000 out of his or her finances. Think about how devastating that is,
especially for a poorer retiree; that may equal a year’s worth of medical expenses, a majority of
an elder’s yearly income, or a double-digit percentage of his or her remaining retirement
savings. Elders rich and poor need to be warned about such crimes. 3

Tom Chancellor is a Certified Financial Planner Professional helping clients enhance their financial peace of mind. Tom spent 20 years as a marriage and family therapist and now incorporates resources from psychology, communications, and relationship studies in financial planning for people who experience life-changing events. Tom helps his clients and other financial professionals respond to life transitions such as divorce, death of a spouse, retirement, receipt of an inheritance and legal settlements. Contact Tom with questions at tom@teaktreecapital.com.
 
Securities offered through Comprehensive Asset Management and Servicing, Inc. (“CAMAS”), 2001 Hwy 46, Ste. 506, Parsippany,  NJ 07054,1-800-637-3211.  Member FINRA/SIPC. Teak Tree Capital Management, LLC,  is independent of CAMAS.
 
This material was prepared by MarketingPro, Inc., and does not necessarily represent the views of the presenting party, nor their affiliates. This information has been derived from sources believed to be accurate. Please note - investing involves risk, and past performance is no guarantee of future results. The publisher is not engaged in rendering legal, accounting or other professional services. If assistance is needed, the reader is advised to engage the services of a competent professional. This information should not be construed as investment, tax or legal advice and may not be relied on for the purpose of avoiding any Federal tax penalty. This is neither a solicitation nor recommendation to purchase or sell any investment or insurance product or service, and should not be relied upon as such. All indices are unmanaged and are not illustrative of any particular investment.

Citations.
1 - napsa-now.org/policy- advocacy/exploitation/ [4/30/15]
2 - allianzlife.com/about/news-and- events/news-releases/preventing- elder-financial- abuse [4/20/15]
3 - tinyurl.com/p4y6pa7 [4/20/15]
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