The guilty verdicts on Brooke Astor's son, handed down yesterday by a Manhattan jury, highlight a sad fact about financial elder abuse: All too often, it's the children who are at fault.
“We see a lot of cases where the kids help themselves with the intention of paying the money back," says Bernard Krooks, an elder law and estate attorney in New York City. "It becomes a bad habit.” In other situations a nearby child, who is the caregiving relative by default, feels justified taking money from a parent’s accounts. But “you don’t have an entitlement to dip into Mom’s bank account just because you’re taking care of her,” Krooks says.
How to prevent it
Ideally, adult children should include their elderly parent in a family meeting to determine who will look after him or her physically and financially. Family members can write up an agreement outlining how much the caregiver should receive for that service from the parent’s accounts. While that set-up involves some complications--including FICA withholding and payment of income tax--it helps reduce stress among siblings, Krooks says. And because a salary is not a gift, the arrangement also reduces the likelihood that Medicaid would later deny the parent benefits for drawing down assets.
Paul Greenwood, a deputy district attorney in San Diego and head of the office’s elder abuse prosecution unit, advises caution in assigning power of attorney to a relative. “Even the person who you think is the nice relative can turn on you in desperation,” he says. Greenwood recommends appointing a bonded, licensed professional such as an estate attorney with expertise in elder law, a financial planner, or a bank officer.
The National Association of Geriatric Care Managers (www.caremanager.org) says 30 to 40 percent of its members do that kind of work. For less than half of what an attorney would charge, they can pay bills, monitor repairs on a property, deal with insurance claims, and so on.
For no extra cost, the power-of-attorney document can be drawn up with limits, such as assigning a relative or friend to monitor the relative with power of attorney, mandating a periodic written report of finanicial transactions, or assigning joint powers of attorney, which requires two signatures on every check.
For more on this subject, click here, and check out our featured article on financial elder abuse in the November Consumer Reports Money Adviser.–Tobie Stanger