With Michael Hackard, Trust Litigation, Personal Injury, Wrongful Death, and Estate Planning attorney, and author of The Wolf at the Door: Undue Influence and Elder Financial Abuse
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Florida Nursing Home Tragedy
Steve kicks off the segment by talking about the tragedy that hit his South Florida community after Hurricane Irma, where widespread power outages led to the deaths of eight residents at a nursing home as temperatures soared. He adds that one-in-ten seniors, or about five million people in the U.S., are victims of elder abuse and neglect every year, according to the National Adult Protective Services Association.
To talk about elder abuse and what can be done to prevent it, Steve speaks with Michael Hackard, author of The Wolf at the Door: Undue Influence and Elder Financial Abuse.
The Extent Of Elder Financial Abuse
Steve starts the conversation by asking Michael about the extent of elder financial exploitation. Michael notes that it is far reaching and happens with regularity because elders are vulnerable, more so today than for earlier generations of seniors.
He blames some of this on longer life spans that result in more cognitive or physical handicaps such as Alzheimer’s, which afflicts 5.1 million people in the U.S., making patients ripe for abuse.
How To Identify Elder Financial Abuse
Next, Steve wants to know how to identify and stop elder financial abuse. Michael acknowledges that recognizing elder abuse is not easy. He recommends watching your parents’ credit cards and checking accounts for unusual activity or name changes because those are the first lines of abuse when property is stolen.
Steve also wants to know how one can catch signs of physical abuse, particularly for those living in retirement or nursing homes. Michael says this is a little tricky because when someone is admitted to a nursing home, they give a medical power of attorney or its equivalent, which could help potentially abusive staff control who gets to meet and interact with the senior.
Various Abuse Situations
Michael says surviving stepparents are often targets of abuse in mixed families. On the flip side, stepparents often unduly influence their spouses to change trusts and wills shortly before the spouse dies, so all assets go to the surviving stepparent’s children—and that is a definite red flag.
Trusts Are Not Bulletproof
Michael adds that it’s tough to bulletproof trusts because most of them are revocable until one dies. And in cases where half of the trust is irrevocable at the first death of a spouse and the second half is revocable, the irrevocable trust often doesn’t get funded, and you don’t know that until later.
Steve’s also baffled that people set up trusts but don’t retitle their assets to the trust, which beats the whole purpose of having a trust.
Children With Substance Abuse Issues
In his book, The Wolf at the Door, Undue Influence and Elder Financial Abuse, Michael Hackard also talks about elders living with children with substance abuse issues. In such cases, the elder is vulnerable to blackmail from an adult child pressuring them to change the trust, share bank accounts, or will the house over. The elder parent may succumb out of fear that the child will leave the home and place that parent in a nursing home. Steve points out that elders are indeed susceptible to financial abuse by someone who has some sort of leverage over them, such as caring for them at home. Michael agrees and likens it to a form of extortion.
State Laws Are Mixed
In wrapping up, Michael says that states have different rules on elder care and prevention and mentions Florida and California as states that have stepped up their protections for seniors but notes that some states do not have an adequate level of protection. Moreover, with the expected retirement of baby boomers over the coming years, Michael Hackard, author of The Wolf at the Door, Undue Influence and Elder Financial Abuse, believes states need to get more refined and more sophisticated about preventing elder abuse.
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Steve Pomeranz: A few months ago, a terrible tragedy occurred in a nursing home in our South Florida community. When Hurricane Irma swept over us causing power outages during a time of high temperatures, eight residents died because the nursing home was without power for several days. Cognitive impairment and the need for help with daily activities of daily living make victims more vulnerable to abuse, physical and financial.
One in ten seniors, five million people, are victims of elder abuse and neglect every year according to National Adult Protective Services Association. With me today is Michael Hackard; he’s an attorney focusing on trusts and estates, and he’s just written the book entitled The Wolf at the Door: Undue Influence and Elder Financial Abuse, and we want to find out how to identify it and what to do if the abuse is suspected. Welcome to the show, Michael.
Michael Hackard: Thank you very much. I’m glad to be on your show.
Steve Pomeranz: So let’s start with financial exploitation, elder financial exploitation, how far reaching is it?
Michael Hackard: It’s very far-reaching, in fact, probably you as well most of your listeners have either seen this up close in a family or heard about it with a neighbor or maybe a member of an association, church, or synagogue. But it happens with regularity, and, of course, a good part of it is because, as you indicated in your opening, people are vulnerable. We’re all living longer. These are problems that in the past maybe our parents or grandparents didn’t deal with as much. But we all live a lot longer now and so there’s a lot more Alzheimer’s; 5.1 million people have Alzheimer’s in the country. Anyway, those are the things that just make people ripe for abuse.
Steve Pomeranz: We’ve had our own experiences here in my investment advisory and financial planning practice where a client was actually being manipulated by two women. It was a male client; he was kind of losing it, and we noticed this pattern that he was exhibiting. And we had to call the Department of Elderly Affairs which basically took care of it. They brought in the police; they separated them, and they were able to stop it.
So, I guess the question is how do we identify if we have a parent that’s in a nursing home or that has in-home help? I mean my stepfather when he was getting some in-home help they stole from him as well. So how do we recognize this, and then what do we really do about it?
Michael Hackard: Well, and it is hard to recognize at times, so a couple different things to look at. One is it would be good to watch your parents’ credit cards as well as their checking accounts because those are kind of the first lines of abuse you can also see that property has been stolen either by a caretaker or even family members that are taking advantage of an elder. But I’ve seen…so, of course, we’re in this practice, but so many situations. I think we had a 94-year-old who was supposed to pay her caretaker once a month and the caretaker had her paying the same amount every day because the 94-year-old had absolutely no idea that she had paid her.
Steve Pomeranz: Someone’s got to be there to mind the store, that’s for sure.
Michael Hackard: They’ve got to mind the store. And, of course, you see it, or in your kind of a situation it could be a caretaker or a child showing up with an elder asking that all the accounts be changed or something like that going on, sometimes that makes sense, other times it doesn’t.
Steve Pomeranz: For those that are living in retirement homes or nursing homes, we can watch for signs of some kind of physical abuse. Again, that must be hard because you don’t know really what’s self-inflicted and what may be inflicted by the employees there. What have you seen and what can we do about that?
Michael Hackard: Well, that is a tough one because once someone is in a nursing home, they probably have given something called a medical power of attorney or its equivalent in whatever state, as well as durable powers of attorney. So, there are a lot of issues there and there are a lot of stresses over who gets to see the elder once they’re in the nursing home because an abuser might, and I’ve seen this, an abuser will try to prevent other people from coming to see the elder. For the most part, by that time the elder’s financial affairs are in someone else’s hands either by way of a trust or power of attorney.
Steve Pomeranz: Well, you’re a trust and estate lawyer, so you see things, you try to structure financial assets to protect from these things, but then you also see them and you deal with family members. You can see the dynamics there, tell us a little bit about some of the situations that have happened in your practice.
Michael Hackard: Okay, well, I’ll talk about common situations that happen in elderly financial abuse. Well, one of them is—this is not to pick on stepmothers, I’m going to start with that—but there are seven times as many stepmothers as there are stepfathers, simply a matter of demographics and age, so you oftentimes see real stresses coming in, separate families that are mixed families in that way. And particularly, I see this one all the time…I think I must see it at least once a month…where say a surviving—and it happens with stepfathers too—but let’s say it’s a surviving stepfather or stepmother who decides to shortly before his or her spouse dies—and they can be unduly influenced—decides to change all the trust or will so that all the money at the second death goes to the surviving stepparent’s children. That one happens a lot.
Steve Pomeranz: Yeah, I mean it may be set up as a life estate where the surviving step-spouse or stepmother or father would get…the money would be separated in a trust, and they would get a monthly income or something like that, but the trust assets, the corpus, stays separate. So, if you see some attempt to change that so all of the assets would go…that would be a red flag, right?
Michael Hackard: That’s a red flag. One of the other things that people ask is, well, they’ll say, but I want my trust to be bulletproof so that no one can take advantage of this either before death or after death. And I tell people it’s pretty tough to bulletproof these things because for the most part trusts are revocable until one dies. And in those cases, in trusts where say half of the trust is irrevocable at the first death of a spouse and the second half is revocable, you see a lot where the irrevocable trust doesn’t get funded, and you don’t know that until later.
Steve Pomeranz: Yeah, well even a lot of people will set up their trust but they won’t retitle their assets in the name of the trust, which baffles me, really. You spent this money, got an attorney, done all this work, this thinking, and then for some reason, there may be some psychological denial thing going on there. I’m not exactly sure or trained to know, mind you, [LAUGH] but there’s something going on.
I’m speaking with Michael Hackard and his book is The Wolf at the Door: Undue Influence and Elder Financial Abuse. Some other elements of undue influence or things that you’ve seen, whether you’ve had clients that ended up in nursing homes and had a problem or with children down the road, give us some anecdotes from your practice.
Michael Hackard: Okay, another common event is I call it being addicted or a child with substance abuse. So, the elder is along in years, might well have dementia and, as you know, dementia is under-diagnosed but might have dementia and has this child with substance abuse or alcoholism living with him or her. So as time goes along and the elder is vulnerable to claims from the substance abuser to change the trust or give the house or change the accounts over or the child will leave. Well, so at that point, you have an elder who’s afraid that they’re going to go to the nursing home if this child that’s been living with them doesn’t get it, so that one I see a lot.
Steve Pomeranz: Let me stop you here for a second. So this is really a question of leverage, in some way, if someone has leverage that they can use to bend the facts, bend the money in their direction, and so on, is that what that’s saying or am I missing something?
Michael Hackard: No, you’re not missing it, you have it exactly right, it is leverage. So in its own way, it accounts, I mean, in its own way, it’s extortion. If you don’t do this mom or dad, you’re in trouble. And then mostly going along with that isolation of that elder where the other kids have a hard time getting into the house or the phones are cut off, again, happens with frequency.
Steve Pomeranz: Yeah, in this case, that I was referring to before where we had to call the authorities, there were these two women and they were taking him around everywhere and they wanted to come up when he came in for his quarterly review. They wanted to come up, they were constantly asking for money. Of course, he was saying fine, he was actually the one asking for the money, but they were there all the time and we didn’t who know they were. And the red flags and the hairs on the backs of our neck just started to rise, and we ended up doing something about it and they actually found some elder abuse there, wow.
Michael Hackard: That’s a great story, a great story for Florida. California has gotten better on it, but not all the states have gone for the kind of protections that should be in place. And the protections that even are in place have got to get more refined, more sophisticated over the coming years because of the population of the baby boomers.
Steve Pomeranz: So you’ve got to be careful out there because the statistics indicate one in ten seniors is a victim of elder abuse, but basically a lot of that is under-reported as well. People don’t realize what has happened or the family doesn’t realize what has happened until it’s too late and they don’t report it. Final words?
Michael Hackard: Well, final words are thank you that I’m on. I loved doing the book, I hope that the book can help some people prevent elder abuse or if it’s already occurred, find a remedy to try to correct it.
Steve Pomeranz: The book is The Wolf at the Door: Undue Influence and Elder Financial Abuse. I put in “the wolf at the door” and I put in “elder abuse” as Google search items and the book came right up, so it was very good. Don’t forget, to hear this interview again and to get a summary of the vital lessons learned here today go to our website stevepomeranz.com.
And while you’re there sign up for our weekly update where we’ll send you the show every week right into your inbox and you’ll get to hear the whole show if you like or parts of it that pique your interest. Michael Hackard, thank you so much for joining me today.
Michael Hackard: Thank you very much.