President’s Corner – Inheritance Theft

In last month’s column, I discussed beneficiaries fighting over their deceased loved one’s money. As disturbing as that is, what is even worse is siphoning away Grandma’s money while she’s still alive. This is commonly referred to as “inheritance theft” or “inheritance hijacking.” This is a form of elder financial abuse.

We are all potential victims as we age and become weaker physically and mentally. I don’t need help with my finances today, but most likely will need to trust a friend, family member, or caregiver. Often, these trusted people have the best opportunity to steal inheritances. The objective of an inheritance hijacker is to gain the trust of the victim and then deliberately secure access to the victim’s assets.

The “requests” from the “trusted” individual to the elderly relative run the gamut: A short-term loan to pay off debts (which never get paid off), paying the grandchildren’s college tuition (the colleges almost always happen to be expensive private schools), or “investing” in the next big technological advance (the probability of that happening is equal to the likelihood the Chicago Cubs win the World Series.)

Sometimes, the money siphoning is more insidious. I personally know of an individual who let her parents live with her and proceeded to charge them rent. Not reimbursements of medical expenses (that happened, too), but actual rent to live in her house. In another situation, an elder appointed their new “friend” as a joint owner on his Credit Union accounts. The friend then came into the branch for weekly withdrawals. Credit Union staff reported the activity to the county’s adult protective services.

The hijackers have the same justification for their actions. Their elderly relative is prepaying their inheritance they would have subsequently received, or owes the hijacker for taking care of them, although the term “taking care” may be no more than a weekly three-minute phone call.

The obvious problem with this is that the elder is on a fixed income; thus, any less money they have cuts into their lifestyle that they worked so hard years earlier to achieve. The fraudsters use guilt and subtle psychological coercion to separate the targeted elder from their money.

Certainly, there are family and non-family caregivers who become advocates and trusted advisors for elders. I recommend elders who are concerned about this be aware that it can happen to them, even in the best of families. I would also recommend finding a competent attorney and having at least two trusted people oversee the assets. We all have to stay educated and alert to ensure our loved one’s quality of life.

David M. Green
President/CEO
(925) 335-3802