Money management

Recently a friend who’s down on her luck proposed that she should move in with me as a roommate. I was tempted: an extra plug of money — even though it would be far less than what it would cost her to rent an apartment here in lovely (increasingly expensive) uptown Phoenix — plus some help with the utility bills would be nice. And at times one would enjoy the company and another pair of hands to help with the upkeep.

And at about the same time, a reader wrote to discuss a new development in his aged mother’s welfare: a “friend” from the past has resurfaced, essentially broke and homeless, and has talked her into renting a room for about a third the going rate.

For us Aged, a rental arrangement along these lines presents some advantages. If you own the property, a little rent amounts to some spending money. If instead you’re paying a mortgage on it, the effect is the same because the rent defrays the cost of the mortgage payment, leaving something in your checking account to pay for food and glad rags. Less obvious: if you carry what the person pays you on your books as “rent,” it turns your home into a rental property and everything you do to improve or repair it is tax-deductible as a business expense.

It works. When SDXB lived with me, he paid half the mortgage and half the utilities. For the IRS’s purposes, I described the income as “rent,” and that substantially defrayed the cost of the new carpeting, the paint, the new kitchen counters, the new toilet, the new swamp cooler, and various bits and pieces of maintenance. It worked out quite well. And since the mortgage alone consumed half of my entire take-home pay, that “rent” made it possible for me to live in the house at all.

Though my friend is neither male nor a love interest, the possibility of having her share space seemed, in passing, interesting enough. I enjoy this person quite a lot. And it has, after all, been long enough since SDXB’s exit for me to forget why roommates make me crazy…

Presented with this proposal, my son put his foot down. He was having exactly none of it, and he announced in no uncertain terms that no roommate was moving in.

Now…you could observe that I’m a grown woman and can decide for myself who I will and will not live with. And there’s something to that. But I wouldn’t have asked him about this if I hadn’t had some misgivings.

And as a  practical matter, my son being at the height of his vigor still has all has marbles. As I skateboard toward senility, there’s some question as to whether every one of mine really is intact. He has shown himself to be eminently responsible with money and all-around smart about life, the universe and all that.

So, I tend to take his advice, he clearly having a better grip on his marbles than I have on mine.

Really, once you’re in your 70s, you find that you’re more easily persuaded – “railroaded” may be le mot juste – than you were just a few years earlier. You’re less skeptical of other people’s motives and less inclined to believe the worst of others. So it’s easy to take advantage of you. And people know it. People who don’t necessarily mean you well know it.

This isn’t the first time someone has proposed to move in with me. About two days before I was scheduled for the first of the six surgeries that occupied a full year, my neighbor across the street sold her house. By the time the deal closed, she still had noplace to go: she hadn’t bothered (or couldn’t afford) to find an apartment or arrange lodging with family members.

So she shows up at my door and suggests that she should room with me temporarily, until such time as she can find a permanent place.

At this point, I’m pretty bat-brained with stress. I say…uhmmm…okayyy, I guess that would be OK. And before I know it, she’s marching around my house saying “my chair will go here and my TV will go there and my refrigerator will go in the garage”! And I’m thinking…holeeee shee-ut!

When my son got wind of this, he mounted his white charger and galloped across the road. He showed up at her door and said, “You are not moving in with my mother.”

Thank you, God…and son. He thereby extricated me from what was obviously about to become a very messy situation.

Financial exploitation of the elderly is a serious problem in America, partly because families splinter and scatter all over the country. An older person really needs someone who sincerely wants to watch over his or her interests to keep an eye on all aspects of the person’s life, including finances. But when families disperse, there often isn’t any such person left.

Victimization of this nature has become so common that physician’s assistants are trained to recognize it and lawyers are advised that cases of elder financial exploitation can form a part of a successful practice.

The state of Florida (home of the world’s most spectacular con artists) has inscribed financial elder abuse into its statutes:

(1)  “Exploitation of an elderly person or disabled adult” means:

(a) Knowingly obtaining or using, or endeavoring to obtain or use, an elderly person’s or disabled adult’s funds, assets, or property with the intent to temporarily or permanently deprive the elderly person or disabled adult of the use, benefit, or possession of the funds, assets, or property, or to benefit someone other than the elderly person or disabled adult, by a person who:

1. Stands in a position of trust and confidence with the elderly person or disabled adult; or

2. Has a business relationship with the elderly person or disabled adult;

(b) Obtaining or using, endeavoring to obtain or use, or conspiring with another to obtain or use an elderly person’s or disabled adult’s funds, assets, or property with the intent to temporarily or permanently deprive the elderly person or disabled adult of the use, benefit, or possession of the funds, assets, or property, or to benefit someone other than the elderly person or disabled adult, by a person who knows or reasonably should know that the elderly person or disabled adult lacks the capacity to consent;

(c) Breach of a fiduciary duty to an elderly person or disabled adult by the person’s guardian, trustee who is an individual, or agent under a power of attorney which results in an unauthorized appropriation, sale, or transfer of property. An unauthorized appropriation under this paragraph occurs when the elderly person or disabled adult does not receive the reasonably equivalent financial value in goods or services, or when the fiduciary violates any of these duties:

1. For agents appointed under chapter 709:

a. Committing fraud in obtaining their appointments;

b. Abusing their powers;

c. Wasting, embezzling, or intentionally mismanaging the assets of the principal or beneficiary; or

d. Acting contrary to the principal’s sole benefit or best interest; or

2. For guardians and trustees who are individuals and who are appointed under chapter 736 or chapter 744:

a. Committing fraud in obtaining their appointments;

b. Abusing their powers; or

c. Wasting, embezzling, or intentionally mismanaging the assets of the ward or beneficiary of the trust;

(d) Misappropriating, misusing, or transferring without authorization money belonging to an elderly person or disabled adult from an account in which the elderly person or disabled adult placed the funds, owned the funds, and was the sole contributor or payee of the funds before the misappropriation, misuse, or unauthorized transfer. This paragraph only applies to the following types of accounts:

1. Personal accounts;

2. Joint accounts created with the intent that only the elderly person or disabled adult enjoys all rights, interests, and claims to moneys deposited into such account; or

3. Convenience accounts created in accordance with s. 655.80; or

(e) Intentionally or negligently failing to effectively use an elderly person’s or disabled adult’s income and assets for the necessities required for that person’s support and maintenance, by a caregiver or a person who stands in a position of trust and confidence with the elderly person or disabled adult.

(2) Any inter vivos [gift from a living person, as opposed to a legacy] transfer of money or property valued in excess of $10,000 at the time of the transfer, whether in a single transaction or multiple transactions, by a person age 65 or older to a nonrelative whom the transferor knew for fewer than 2 years before the first transfer and for which the transferor did not receive the reasonably equivalent financial value in goods or services creates a permissive presumption that the transfer was the result of exploitation.

As you can see, this is a pretty broad definition. Just about anyone who has any kind of access to an elder person, whether officially as a cosigner on an account or whether as a matter of trust or family relationship, is in a position to wangle any of these abuses.

What can be done?

If you’re already older but still have full possession of your marbles:

• Designate someone that you trust to keep an eye on your finances and on your personal activities and relationships.
• Designate someone else that you can trust to “second” or oversee that person’s activities where your finances and lifestyle are concerned.
• Provide a power of attorney for that person.
• Put your wishes – especially should you become incapacitated – in writing, give copies to more than one person, and file a copy with your lawyer or accountant.
• Make it possible for the trusted person to view your bank, brokerage, and credit-card statements; arrange to have statements sent to this trustee, or give him or her the password to view statements online.
• Arrange for a financial manager to oversee major investment accounts, with responsibility to you, not to your relatives or supposed friends.

It’s important to be aware that just because someone is your child does not make that person trustworthy. The sister of a dear friend assumed the care of their mother, who was at the time sliding into Alzheimer’s. As soon as she got her talons into the woman, she cut off all communication with her siblings. The woman’s estate was worth about $6 million. By the time my friend and her brother realized what was going on, the sister had drained the estate of at least $3 million, diddling away the money on houses for herself and her adult child, on cars, and on luxury items. The lawsuit is under way as we speak – but no one will ever be able to recover the money that was stolen from the mother’s estate.

If you have a parent or loved one who needs help or who may need help:

• Keep an eye on his or her living conditions and note any abrupt changes. If the person is suddenly living high off the hog or suddenly living like an anchorite, consider that a warning sign and look more deeply into the situation.
• Watch for the absence of valuables, such as electronic devices, jewelry, or furniture. Any unexplained disappearance of such possessions is a loud and clear warning sign.
• Regard any new roommates, caregivers, or “best friends” with skepticism. Be sure they do not have access to funds or property. This is a case in which silence is golden: watch, don’t talk.
• Observe whether such a person accompanies him or her to the bank, knows their Social Security number, or knows PIN numbers for debit cards.
• Watch for signs that bills aren’t being paid, such as past-due notices, bill collection harassment, eviction notices, cancellation of utilities, or the like.
• Review bank statements regularly. If statements stop coming in the mail, find out why and where they’re going.
• Question any unexplained financial transfers or disbursals.
• Examine cleared checks to confirm that the signatures have not been forged.

If, as in my friend’s case, the victimized elder is mentally in no state to recognize exploitation or to ask for help, you may find yourself with a difficult problem. It’s not easy to challenge a caretaker’s authority, especially if the perp has been smart enough to engineer withdrawals and property exchanges in such a way as to make it appear they’re somehow in the victim’s interest.

Here’s what you can do:

• Hire a lawyer. Some lawyers specialize in elder abuse cases.
• Contact the person’s doctor or other health-care providers.
• Notify other family members who are not exploiting the person.
• Notify law enforcement officials.
• Contact your state’s Adult Protective Services.

If you have evidence that someone you care for is being financially exploited — even if the apparent exploiter is a family member — take action. Do not delay. My friend and her brother are out $3 million of the money their father left to them — that’s $1.5 million apiece — because they hesitated to rock the boat. Even if the sister is convicted of a crime, they will never get that money back. And the mother will have that much less to support her safely and comfortably until she dies of Alzheimer’s.

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