Larry was 84-years old when he passed away last year. His wife of 62 years died in 2018. His only child, David, lived overseas and he had no other living family. Larry was fiercely independent and was reluctant to ask for assistance with anything despite being an elder. Concerned for his well-being and knowing that he would never consider moving into an assisted living community, a neighbor suggested to Larry that he find a housekeeper who could help with cleaning and preparing meals. He also suggested that Larry hire a landscaping company to assist with the yard work which was clearly becoming more than Larry could handle. Reluctantly, Larry got the name of a young couple from a friend at church who could assist with house cleaning, meal preparation, and yard work.
Larry quickly became very comfortable with this couple and trusted them completely. Larry’s depression from the loss of his wife seemed to improve. David became increasingly concerned about this couple and the amount of trust that his father placed in them. Larry assured David everything was fine and they would never take advantage of him. Larry was insulted by the suggestion this couple, or anyone for that matter, could take advantage of him. Unable to convince his dad that something just did not feel right, David contacted New Mexico Adult Protective Services to check on Larry.
After an investigation, it was quickly discovered this couple, in only 4 months, had convinced Larry to purchase a new car for them and make a $100,000 down payment on a new home. It was also discovered Larry was paying this couple exorbitant hourly rates for the work they were doing, he provided them with a credit card, and he changed the beneficiary of his life insurance policy by removing David and inserting this couple. When confronted, Larry assured Adult Protective Services and David he did all of this because he wanted to help them out. They were a hard-working couple with 3 young children. In total, there was an excess of $200,000 of questionable gifts, wages, and credit card expenditures. After the investigation, the couple stopped doing any work for Larry and refused to answer his calls. Larry was devastated, extremely embarrassed, and angry at himself for allowing this to happen. He trusted them and thought they genuinely cared about him.
This is a very sad, but not uncommon, story. Shortly after the Adult Protective Services investigation, Larry was diagnosed with dementia, and David, after moving back to New Mexico, was appointed as Larry’s guardian and conservator. David then had complete control over his father’s finances. Unfortunately, unscrupulous people always seem to find a way to take advantage of the elderly and the vulnerable. Larry was the perfect victim: he lived alone; his son lived overseas; he had very few friends; he was lonely, depressed, and suffered from dementia. Had it not been for Larry’s son, this abuse would likely have never been discovered.
We never expect this to happen to our loved ones, and absolutely never expect it to happen to ourselves. But the reality is elder financial abuse is extremely common and the techniques to steal seem to be becoming more and more clever and deceitful. Unfortunately, when confronted with situations like this, we get upset with ourselves and ask what could have been done to prevent it from happening. Although it is nearly impossible to prevent all abuse of this type, one method is a trust. In the story above, as part of his estate plan, Larry could have established a trust and transferred all of his financial accounts and his home into the trust. If he named David, or perhaps a trust company or trust department, as trustee, this couple would have quickly learned someone other than Larry was in control of the assets. They would never have received the “gifts” and they would have likely moved on quickly to their next victim.
No one wants to admit they are not as sharp as they once were. But if we are blessed with a long life, chances are pretty good we will likely lose some of our mental acuity and will become more and more vulnerable to the unscrupulous. Proper estate planning is one tool to help prevent the story above from happening to our loved ones.
If you are wondering if a trust is right for you or want to protect your assets, please call our office at (505)872-0505 to schedule an appointment or contact an estate planning attorney.