With Michael Hackard, Attorney at Hackard Law, Author of The Wolf at The Door: Undue Influence and Elder Financial Abuse
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There was a time when most baby boomers thought they’d never get old. But now that they’re aging, they are becoming more aware of their own mortality. Issues that generated little interest from them just 20 years ago are now starting to grab attention, such as elder financial abuse.
To shed light on this major silent epidemic, Steve speaks with Michael Hackard about his new book, The Wolf At The Door: Undue Influence and Elder Financial Abuse, which gives us insights into the extent of elder abuse and tools to protect ourselves and our families.
Elder Financial Abuse
In The Wolf at the Door, Hackard notes that one in ten seniors, nearly five million people, are victims of elder abuse every year in a silent epidemic of crime tied to the aging of America. The U.S. now has about 40 million people aged 65 and above, or about 13% of the population. By 2029, seniors will make up 20% of the population, and Hackard believes elder financial abuse is only set to go up unless we raise awareness about this problem. In addition, rising life expectancy—along with cognitive and physical impairments—will render more elders susceptible to financial abuse in the years to come.
Michael Hackard reports that 90% of all senior abuse comes from family members and caregivers. Within a family, abusers are often dependent children who are not working, have substance abuse issues, live with a parent, or are financially dependent on that parent.
Cross The Line Into Abuse
While having a sibling stay with a parent can be a good thing for the parent and for other siblings, problems start to creep in when the other siblings start getting isolated from the parent and the abusing child develops a feeling of ownership of the parent or of being entitled to the parent’s assets. That’s when abuse starts to go over the line.
In The Wolf at the Door, Hackard writes that the solution to elder financial abuse is to have full transparency between siblings and to share responsibility, so there’s a system of checks and balances.
Signs Of Elder Financial Abuse And Counter Measures
Telltale signs of elder financial abuse include unpaid bills, excessive spending, bank account transfers, vanishing household assets, or secrecy with estate documents. For example, a $400 grocery bill could mean somebody’s taking out an additional $300 in cash over and above basic weekly groceries.
The way to counter this is to demand transparency and to involve an experienced attorney when you start seeing signs or suspect that something’s not right. Another option is to call Adult Protective Services, which is available throughout the country (but often gets mixed reviews). So make sure APS goes beyond lip-service and truly delivers.
Watching Over Trustees
In this era of trusts and estates, it’s also important to watch over trustees. From his own law practice, Michael Hackard cites an example of a securities firm that was withdrawing annual fees at twice the amount of that being distributed to beneficiaries, which led to his getting hired to fight the case. So be wary of secrecy in trustees. Don’t blindly trust them, look for overbilling, keep a close eye, demand transparency, and generally watch for red flags.
If you or someone you know is a victim of elder financial abuse, get a copy of Michael Hackard’s book, The Wolf At The Door: Undue Influence and Elder Financial Abuse to prevent this unfortunate situation. All proceeds from the sale of the book go to the Alzheimer’s Foundation, which helps people with Alzheimer’s and their families and shines a light on elder abuse so it can be addressed in public policies.
With elder financial abuse set to increase in the years ahead, any one of us could fall victim, so it’s best to collectively educate ourselves, spread the word, and raise awareness of this vicious silent epidemic.
Disclosure: The opinions expressed are those of the interviewee and not necessarily United Capital. Interviewee is not a representative of United Capital. Investing involves risk and investors should carefully consider their own investment objectives and never rely on any single chart, graph or marketing piece to make decisions. Content provided is intended for informational purposes only, is not a recommendation to buy or sell any securities, and should not be considered tax, legal, investment advice. Please contact your tax, legal, financial professional with questions about your specific needs and circumstances. The information contained herein was obtained from sources believed to be reliable, however their accuracy and completeness cannot be guaranteed. All data are driven from publicly available information and has not been independently verified by United Capital.
Steve Pomeranz: There was a time when most baby boomers thought we would never get old. We baby boomers share a collective memory: Beatlemania, rock ‘n’ roll, TV shows like the Howdy Doody Show, which I’m sure most of you have never heard of; the Mickey Mouse Club, which was wonderful; the Twilight Zone, which scared us; and even the lighthearted Happy Days.
Now we’re aging, and we’re seeing that a large percentage of our parents, members of the greatest generation, are now gone, and we’re now more aware of our own mortality. So issues that would have generated little interest from us just 20 years ago are now starting to grab our attention. We’re looking at trusts; we’re looking at our estates and learning more about financial elder abuse, so we can prepare for what inevitably will come. Our generation is not one to stand for the status quo either, so we figure out ways of helping ourselves. We innovate ways of helping ourselves and our parents and our children, and this is becoming more meaningful for us year by year.
One individual who has worked and written about this field is attorney Michael Hackard, whose new book, The Wolf at The Door: Undue Influence and Elder Financial Abuse, gives us insight into this world and the tools to protect ourselves and our family. Welcome to the show, Michael.
Michael Hackard: Thank you for having me.
Steve Pomeranz: You write that one in 10 seniors, five million people, are victims of elder abuse and neglect every year. Really, you say it’s a silent epidemic of crime. Give us a sense of the situation.
Michael Hackard: Well, it truly is a silent epidemic. A lot of it has to do with the aging of America.
There are about 40 million people now that are age 65 and above. I think that’s about 13% of the population. By 2029, we’re said to be 20% of the population, so you just see this higher incidence of abuse. One in nine seniors, in fact, is reported being abused, neglected, or exploited in the last 12 months in whatever fashion, so it’s a big problem.
Steve Pomeranz: Yeah, and that’s only the ones that are reported. How much of this actually goes unreported?
Michael Hackard: Well, the interesting thing, it’s said that only one in 44 cases is actually reported. That’s an astounding number.
Steve Pomeranz: Yeah. All right, so this is something that is kind of quiet that’s going on, that gets some press once in a while. We’re trying to bring it out into the light here as well. Where does this abuse generally come from? Is it institutions, is it family members? How does that break down?
Michael Hackard: Well, unfortunately, it’s about 90% family members and caregivers, with family members being the majority of it. Now, in identifying family members that do this, I throw in a few caveats, but in my experience, and I think the general experience is that when it’s a family member, it’s usually a dependent child who’s not working, maybe has substance abuse, and for a matter of months or even years, is living with a parent, and fully financially dependent on that parent, and of course, ultimately, the parent becomes dependent on that child, and very vulnerable.
Steve Pomeranz: Yeah. Yeah, I’ve seen that in my own practice, but there’s a good side to that as well, because if other siblings are busy running their lives, maybe they live in different parts of the country, it’s comforting to know that you’ve got a sibling that’s in the house, taking care of things. Where does it go over the line?
Michael Hackard: Well, it goes over the line when the other siblings start getting isolated from their parent, and almost that the abusing child, in that case, has a feeling like of ownership, ownership of the parent, of the access to the parent, isolates the parent, and ultimately, a feeling of ownership and somehow deserving or being entitled to the parent’s assets. That’s when it goes over the line.
Steve Pomeranz: Wow.
Michael Hackard: Way to rebut it is to have full transparency between the siblings, of where one agrees to do one thing, and one another, however it is it’s split up, so that somehow, even if they’re across the country, there’s some participation.
Steve Pomeranz: Checks and balances, I would-
Michael Hackard: That’s a good way to say it.
Steve Pomeranz: Yeah. Tell me a little bit about your background. You’re an attorney dealing in estates and trusts, so how did you come into this area of the practice?
Michael Hackard: Well, when I started as a lawyer over 40 years ago, I was in an estate and trust, well, then it was basically an estate and wills law firm.
Steve Pomeranz: Okay.
Michael Hackard: None of the senior members wanted to litigate, and I did. I thought it was fun. I still do. So, back in those days, I started to do will contest. I was successful at it and enjoyed it. Got away from it for a long time, and now, in my 40 some years of practice, about five years ago, I think I just started to step up, seeing that what was happening, and with baby boomers, and with people that I knew, and their parents, and thought, well, it’s time to get back in.
Steve Pomeranz: Mm-hmm (affirmative).
Michael Hackard: Now, getting back in, it’s really a changed world, because whether you’re in Florida or New York or California, the use of trust, irrevocable trust and revocable trust, or living trust, is widespread, and 40 years ago, it wasn’t that way at all. Of course, now, elder financial abuse is widespread in our … We live longer, and we have different diseases when we live longer, so things have changed.
Steve Pomeranz: Yeah. Yeah, so what was once something that would end a person’s life has now turned into a chronic illness that’s manageable, and people are living a lot longer, but then there are issues of cognitive impairment, and physical impairment, and things that now come in that we all are familiar with as we live longer.
If I’m a sibling, and just for the moment, forget this idea that I’ve got another sibling living in the house, what are some of the signs that I should look for, because I’m kind of busy with my own world, and I’m assuming I’m hiring a professional, and they’re telling me everything is fine. What are some of the telltale signs I need to look for?
Michael Hackard: Well, telltale signs that include liabilities and unpaid bills.
Steve Pomeranz: Okay.
Michael Hackard: That means somebody’s taking some money. Sometimes you’ll see transfers of social security or VA accounts. Sometimes, that’s absolutely necessary and important, but other times, it’s just a way to obstruct any kind of transparency into the senior’s life. And suspicious withdrawals. Vanishing assets. You go in the house, and, “Hey, where’s the silver set,” or “Where is this or that?” Those are some of the things that become obvious, and secrecy with regard to estate documents. Sometimes a child … I’ve seen it many times, where a child says, “Oh, don’t worry about it, brother and sister. It’s all under control. I’ve got it under control.” Well, if it’s under control, let’s share those documents, and know what’s going on.
Steve Pomeranz: Yeah. Yeah, with my stepfather, years ago, we had a caretaker, and we found that there were calls to the Bahamas on his phone, and I think it was Haiti at the time, and obviously, he was not making those kinds of calls, so that was a quick sign for us, an easy one to say, “Hey, it’s obvious who made these calls,” and we were able to get rid of her. But, I guess, even just little things like that, you need to watch out for. When do you get an attorney involved? At what point do you, when I guess you see some kind of crime being committed, do you call the police? What are your first steps there?
Michael Hackard: Well, I think it does make sense to get an experienced attorney, someone knowledgeable in the area, when you start seeing those signs, when you suspect things that are going on, and I can think of things over the years, such as people that are going to the local Safeway or other store, and are supposed to just be buying food, and you see $400 for a grocery bill, which is, what’s happening is the caretaker or somebody’s taking out an additional $300 in cash. Or you see suspicious bank accounts, those kind of things. I think you do bring in lawyers, experienced lawyers.
The other thing is, many times people call adult protective services. We have them throughout the country, and I think they’re very important, but you do get mixed reviews on them.
Steve Pomeranz: We had a situation in our own practice where we did call them, and they were terrific, I have to say. They solved the problem. They brought in the police. They took care of the people that were taking advantage of this client of ours, and they got him situated in a good assisted living facility. I was very, very happy with that. Just a personal note.
Michael Hackard: Yeah, and that’s terrific, and there are a lot of success stories. I admire them for what they do. I do have a caveat that it’s not the magic bullet, per se, because sometimes they’ll just go out and visit the elder, and speak to him or her alone, and say, “Is everything okay,” and the elder says, “Okay.”
Steve Pomeranz: Yeah.
Michael Hackard: And they’re gone.
Steve Pomeranz: That’s right. In this case, the elder was saying, “I’m fine. I don’t have a problem. I know these people. I like these people,” but we could tell that he was being abused.
I want to talk briefly, we don’t have much time, but setting up trust means that there’s trustees that can take over in times of parental, let’s say, decline. How do you watch the trustees? What rules do they have? They have rules to follow. Who’s minding the store there? What’s one of your experiences with that?
Michael Hackard: Well, yeah, once they become the trustee, they do have, throughout the states, some duty to account to the maker of the trust, as well as to beneficiaries that are bested, say.
Steve Pomeranz: Mm-hmm (affirmative).
Michael Hackard: We get into trustee fights all the time. I mean, I have lots of examples, but there’s one going on right now that’s a securities firm, essentially, and their annual fees, what they’re taking out of this trust, are twice the amount of what’s being distributed to beneficiaries.
Steve Pomeranz: Mm-hmm (affirmative).
Michael Hackard: I mean, this wasn’t really set up to benefit the securities firm.
Steve Pomeranz: Right.
Michael Hackard: So, when you see secrecy in trustees, you see overbilling, sometimes horrendous overbilling, you know? Half a million dollars in fees to a trustee? Ridiculous.
Steve Pomeranz: That’s ridiculous. Mm-hmm (affirmative).
Michael Hackard: But, you got a problem, and somebody can step in.
Steve Pomeranz: Yeah, gotcha. The book is The Wolf At The Door: Undue Influence and Elder Financial Abuse. All proceeds from the sale of this go to the Alzheimer’s Foundation, right?
Michael Hackard: That’s right-
Steve Pomeranz: That’s great.
Michael Hackard: … And it’s a good spot to go. They do great work in terms of helping people with Alzheimer’s and families, and helping bring issues so that they can be addressed in public policies.
Steve Pomeranz: I’ve read the book. It’s a good book. It’s a necessary book if you find yourself approaching that situation, or in that situation. Once again, The Wolf at The Door: Undue Influence and Elder Financial Abuse. My guest is attorney Michael Hackard.
To hear this segment again, and to hear all of our segments on our show, do not forget to go to our website, which is StevePomeranz.com. Don’t forget that we podcast. We use all forms of social media for you to get to us, and if you sign up at our website, we’ll send you a weekly update of every segment that we do, where you can listen to the segment individually, read a summary about it, or read the transcripts. It’s all there for you to enjoy this information that we provide to you. Michael Hackard, thank you so much for joining us.
Michael Hackard: Thank you, Steve.
