Family, Friends and Finances
As you spend time with family members during this holiday season, you may want to consider: might they be easy prey to scammers and swindlers? If the answer is “yes” or even “maybe” or “I’m not sure,” please take a moment to consider these important points:
When someone needs long term care, a change in their abilities can happen quickly. Someone who for years has always written their own checks may, overnight, be unable to pay their own bills or coordinate the preparation of taxes. Anticipate this likely scenario.
For seniors who have been especially private about finances, this can be a difficult and delicate topic to bring up, but one way to approach it is to encourage them to introduce you to their attorney, their bank manager, their tax preparer. Realize that changes in mobility or cognition may make this difficult or impossible in the future.
With regard to long term care insurance, you should weigh carefully the decision to assign policy benefits to any entity. While doing so may be convenient, when policy benefits are paid directly to a provider such as a home care agency, it becomes easier to “slide a bit”—i.e., fail to stay on top of their billing practices. Many families have learned that home care billing errors are commonplace—and not necessarily nefarious. However, monthly monitoring can ensure preservation of long term care insurance benefits, and if something fishy is going on, you’ll know. The more often statements are audited, the more likely you’ll be able to alert authorities and take remedial action sooner, instead of when you realize tens of thousands of dollars (or more) are gone.
Establish and cultivate strong relationships with key financial people. A bank branch manager can be extremely helpful; ask them now what steps they’ve seen other families take when a long term care need is at hand.
Online banking can make it easier to regularly monitor finances. Make sure only the most trusted of relatives and others are cosigners on large bank accounts, safe deposit boxes that contain valuables, or named in important documents such as a power of attorney.
Do not assume anything. Unfortunately, simply because someone is ethically or even legally bound to do the right thing doesn’t mean they won’t commit financial abuse in billing, that money won’t be skimmed, or even that accounts won’t be plundered. Access, monitoring and communication are key. The title of a November 13 opinion article in The Oregonian hints at a compelling story: "Just when you thought, at 104, that you'd seen everything." It's a cautionary tale for all; take a look:Petronella is a 104-year-old who asked one of her son’s best friends—an attorney and CPA by profession—to set up a trust to handle her financial affairs, and to serve as trustee. Then, many months later, on November 4 of this year, her son filed a complaint against the trustee at Multnomah County Circuit Court, accusing the trustee of having “systematically looted her accounts, surreptitiously syphoning off nearly everything she had set aside for her care and support.” The complaint alleges the trustee “… took at least $334,711.92 for his own personal benefit.”
When his mother’s residential facility notified him that several months’ bills hadn’t been paid, the son investigated, and discovered “a pattern of withdrawals that looked very odd for investments— $10,000, $20,000 or $30,000 was being removed on a monthly basis.”
The article mentioned the 104-year-old had long term care insurance, noting that she had annual expenses of “just under $11,000.” The complaint alleges that since the inception of the trust, the trustee “…took $334,711.92 for himself (and) paid only $38,900 for Petronella’s care.”
The trustee has been unresponsive—and missing—since he was first asked about the irregularities.
One of the little-mentioned advantages of long term care insurance is that the benefits wait for the insured at an insurance company. The benefits are not a lump sum easily accessible to anyone named on the account, or, in the case of a trust, a trustee. This can protect elderly people unable to manage their own finances.
It doesn’t help any of us to be paranoid, but it does make sense to be vigilant.
After all, as one family in Oregon has learned, you may trust your friends, but verifying is paramount.
Here's a link to the article in The Oregonian: https://www.oregonlive.com/opinion/2021/11/just-when-you-thought-at-104-...