We have all heard the horror stories of seniors losing everything because they have relied on, and have been duped by, people who are in trusted positions. This week’s perspective looks at the warning signs that something may not be “right”.

Background: The amount of wealth that is soon to be passed from one generation to the next is significant. The concern is whether the testamentary wishes of those who own this wealth are being met. According to Vancouver’s Rennie Intelligence Division, $355 billion of free equity in homes is currently owned in Greater Vancouver, which will be passed to the next generation in the foreseeable future. To this amount should be added all other assets other than single family homes. This significant wealth can become a target, and the unwary elder person could become the victim of elder financial abuse, especially with “trusted” persons who may have nefarious intentions.

The situation: a trusted person (child, caregiver, advisor, family member, tradesperson, phishing scammer) becomes closer to the elderly person, who often needs some form of assistance with the conduct of his/her daily life. That trusted person, in time, then begins to ask to “help” and take care of the elderly person with his/her personal financial matters.

The issue: the results of any of these changing financial situations, as described below, going awry could lead to a financial loss and ultimately may not meet the testamentary wishes of the elderly person (and some of the elderly person’s assets may go to someone who they had unfortunately trusted with their finances)

The signs: the family should beware of the clues that they may need to further investigate regarding the potential for elder financial abuse. Some of the ways this trusted person could gain

access to the elderly person’s assets include:

– adding joint tenancy on residences, investment and bank accounts;
– providing power of attorney or signing rights over assets;
– signing over assets or control of assets to others;
– co-signing on loans, often for family members.

 Some suggested defensive approaches for the elderly and the family:

– Understand the assets owned by the elderly person and the ownership structure.
– Document what his/her testamentary wishes are intended to be (usually in a will).
– Before signing over assets, adding a joint tenant or providing co-signing authority, seek qualified (legal) advice.
– Ensure that, if any of these arrangements are intended to be used for assets, the intent of ownership structure, including beneficial ownership and who will receive beneficial ownership upon death, is thoroughly documented.
– If needed, seek a trusted representative such as a professional trust company.

Learn, think, apply!