Minnesotan seniors are often at risk of financial exploitation by unscrupulous individuals or businesses that are just trying to take their money. Too often, these seniors' heirs don't even find out about the rip-off until the senior has died and they must engage in probate litigation in an attempt to receive the inheritance their loved one wanted them to have.
Minnesota's Department of Commerce is trying to crack down on this kind of financial exploitation. With tax time approaching, the agency recently sent out a letter to the state's licensed CPAs, urging them to look for signs of fraud and abuse when they look through seniors' financial records.
About 70 percent of the nation's wealth is in the control of seniors, many of whom are emotionally or mentally vulnerable, making them attractive targets for scam artists. One out of every five citizens over the age of 65 has already been the victim of a financial scam, according to a 2010 survey. Experts estimate that more than 80 percent of these rip-offs go unreported.
The Department of Commerce asked accountants to look for signs of financial abuse, including missing or incomplete documentation, significant changes in income, loans, unusual financial investments and unreasonable fees. Accountants who found signs of abuse were urged to tell the seniors to contact the Department of Commerce.
One way that people can protect their elderly loved ones from this type of fraud is through a guardianship. This legal move is designed to take legal responsibility of a person who has been diagnosed as mentally or physically disabled. These arrangements establish one person as the guardian and the other as the ward. The guardian assumes the responsibility of medical and other care for the ward, but must also report updates on the ward's condition to the court. The court strictly limits the guardian's powers so that the guardian can only do those things wards can't do for themselves.
When done correctly, a guardianship can make sure a vulnerable adult has appropriate care. But, in extreme cases, unscrupulous individuals can sometimes use the guardianship process itself to exploit the vulnerable and enrich themselves. These cases make for very difficult probate litigation after the elderly person has died. It's a good idea to keep a sharp eye out for signs of financial exploitation before it comes to that.
Source: Echo Press, "Tax professionals urged to spot financial abuse of seniors," March 24, 2013