Stories in the news this month have really highlighted the need we have in this country to truly care for our elderly family members and friends, protecting them from exploitation.

Brooke Astor’s son, Anthony Marshall was sentenced this month to as many as three years in prison for swindling millions of dollars from his mother, who suffered from Alzheimer’s disease. And, a Long Island woman was convicted just recently of stealing the home of a 93-year-old retired barber.

MetLife’s Mature Market Institute estimates that financial scams cost the elderly about $2.6 billion a year. Only one in 25 cases of financial abuse is ever reported.

Many people are quick to point to reverse mortgage lenders as the greedy, moustache-twirling villains of financial abuse. Reverse mortgages are loans against the equity in your home that you do not have to pay back until you voluntarily move or sell your home or until you die.

They are ripe for abuse because aggressive ad pitches often involve coercion and deception promising “free money” and failing to disclose fees and terms of the loan, similar to problems raised during the flood of subprime mortgage rate loans into the market that created the housing boom and subsequent collapse.

However, financial abuse can often come from closer to home. Lisa Nerenberg, an elder abuse consultant recently told the Los Angeles Times that the chief perpetrators of financial elder abuse are family members. MetLife puts the percentage of substantiated cases of financial abuse involving an adult child around 60 percent.

As a senior citizen, you can help protect your assets by assigning them into trusts and by choosing a trust-worthy individual to have power of attorney or to serve as a fiduciary. Others can help prevent financial elder abuse by simply opening up a dialogue with their loved ones about finances and keeping an eye out for scams.

James D. Perry

Many grandparents come to me saying they would love to give their grandkids a substantial gift for their college funds and future nest eggs, but they don’t know quite how to do it, and they have fears that their grandchildren will be saddled with the taxes.

The first step is to determine how much you can comfortably give away.

Make an honest assessment of your financial health and your long-term goals. You don’t want to compromise your needs or your retirement by spreading your finances too thin.

Next, know the facts about giving.

In January of this year, the law changed to allow individuals to give up to $13,000, per year, per beneficiary tax-free. This $13,000 is excluded from the giver’s lifetime monetary giving allowance. And, the sooner you put that money to work, the better.

Nearly 85 percent of monetary gifts from grandparents to grandchildren will go towards their college education. Prepaid tuition savings vehicles – like 529s – can help in those efforts. The downside, though, is that capital gains from these accounts not used to pay for education will be subject to taxes and penalties.

Grandparents also have the option of opening a Uniform Gifts to Minors Act account. The first $850 contributed to this account is tax-free. The account is automatically put in the hands of their grandchild upon the state’s age of majority.

However, any money removed from a UGMA account will be taxed as capital gains, and the funds may count against him or her when it comes time to calculate financial aid eligibility for college.

To figure out what kind of plan would work best for you, speak to your financial planner or estate-planning lawyer.

Tis the season for gift giving, so don’t be afraid to share the wealth!

James D. Perry