Protecting the elderly from financial abuse.

• Author: Rolfe, Ralph E.

IN 2007, ROUGHLY ONE IN EIGHT INDIviduals in the United States was age 65 or older (Department of Health and Human Services, Administration on Aging, A Profile of Older Americans: 2009, at 4). During the past decade, a new term, "senior fraud," has come to the forefront in the media. It is also sometimes referred to as senior abuse. The abuse can take many forms: physical, emotional, or financial. While not specifically related to the issue of taxation, this is an area that can affect CPAs' practices as they work with an aging client base. The purpose of this column is to explore the warning signs of senior fraud and to offer suggestions for identifying those signs and resources for guidance in handling such situations.

Warning Signs

Some signs that tax advisers should watch for with their older clients include:

* Revisions of power of attorney documents. While a change in the responsible party does not necessarily indicate a problem, be sure the rationale for making the change is appropriate. This is particularly important in the United States today; the National Institute on Aging estimates that as many as 5.1 million Americans have Alzheimer's disease, and as the population ages the number of people afflicted doubles for every five-year interval beyond age 65 (Department of Health and Human Services, National Institute on Aging, 2008 Progress Report on Alzheimer's Disease 5 (December 2009)).

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Changes in beneficiary designations on insurance contracts or other accounts, including IRAs and/or retirement plans. The principal reasons for making changes in these documents typically stem from significant events, such as a death, marriage, or birth. Once again, the adviser needs to be alert to these changes and, if possible, review them with the client to ensure the client is making the changes for the right reasons.

changes in bank or brokerage account titles to include others as joint owners or as signatories on the accounts.

* Increased ATM use for cash withdrawals. This is a much more difficult issue to handle unless the adviser is periodically reviewing the client's various bank and brokerage statements. Sometimes the client's bank may catch unusual withdrawals and bring them to the client's or the adviser's attention. Reviewing the client's accounts and periodic statements is a billable service that will help protect older clients.

Unexpected refinancing of a home mortgage or a change in ownership of real estate held...