Close Close

Financial Planning > Charitable Giving

For elderly fraud victims, biggest toll is emotional

Your article was successfully shared with the contacts you provided.

Elder fraud and abuse has more of an emotional impact on victims than financial, according to a just-released survey by the American Institute of Certified Public Accountants.

Nearly half (47 percent) of CPA planners polled in AICPA’s PFP Trends Survey said they had seen an increase in elder fraud or abuse in the past five years, with CPAs stating that being defrauded was vastly more likely to have a substantial emotional impact (37 percent) than a substantial financial impact (5 percent).

The survey of 266 CPAs was conducted from May 5 to 27.

The most common types of fraud seen by CPA planners over the past five years involved phone or Internet scams (79 percent). Behaviors tagged by planners as “abuse” include the “inability to say no” to family (72 percent) and supporting non-disabled adult children (57 percent).

“For elderly individuals, being a victim of financial fraud or abuse can be emotionally devastating. The impact is compounded when the perpetrator is a member of their own family or a friend,” said Ted Sarenski, CPA/PFS, and a member of the AICPA’s PFP Conference Planning Committee, in a statement. “One of the unique challenges for CPA financial planners working with elderly clients is balancing their desire to help their family members financially with the need to ensure that they have the means to continue to meet their own expenses.”

Jean-Luc Bourdon, CPA/PFS, and a member of the AICPA’s PFP Executive Committee, noted in the statement that “it’s crucial that CPA financial planners coordinate with other professionals employed by their elderly clients” as it relates to decisions regarding estate planning, long-term care or housing.

Bourdon and Sarenski advise that for clients displaying competency issues or for those who “just can’t say no to relatives” to put their assets in a revocable living trust and assign a co-trustee. “Ensure that all checks — or checks over a certain dollar amount — require two signatures. This can reduce any chance of an elderly client giving to unscrupulous people,” they said.

The report also encourages advisors to “identify the members of the client’s support team” and include “professionals, designees — such as those designated to make medical decisions — and loved ones.”

The report also encourages planners to establish a financial plan and review the plan every six months “to make sure there are enough assets to match the plan, or if any adjustments need to be made due to changes in care or needs.”


© 2023 ALM Global, LLC, All Rights Reserved. Request academic re-use from All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.