Financial exploitation of the elderly by family members and caregivers is one of the most heartbreaking and intractable problems I’m called upon to solve. Quite naturally, most parents trust their children and want to help them. But when elderly parents compromise their own security on the assumption that their adult children will be willing and able to make good on their promises, they are taking on unacceptable risk.

Most of my clients are no longer earning significant income. Rather, they are relying on their accumulated savings, property and retirement income for subsistence. They are likely to have significant health problems — we all know how burdensome the cost of prescription medication can be, and many seniors need assistance with transportation, housekeeping, meal preparation and other chores they used to perform themselves but for which they now must hire assistance. In other words, the cost of living for senior citizens is going up and they are facing increasing expenses. It is very unwise to make loans or gifts of money or property that should be retained for one’s own independent subsistence.

In this context, here are a couple of true-life scenarios — actual cases of which I have personal knowledge — upon which you can go to school:

l 70ish out-of-state widow signed a $200,000 check (proceeds from the sale of her home) over to her daughter and son-in-law so they could purchase a home in Kansas for the whole family. The daughter pocketed most of the money, bought the home with a mortgage, and now the mother’s home is in foreclosure because the children couldn’t make the payments.

• 83-year-old widow appointed her granddaughter as her agent under a Durable Power of Attorney. The granddaughter wrote checks for gifts for herself and her children — furniture, computers, exercise videos, etc. — until the grandmother’s $40,000 was all used up.
• Elderly couple bought another home so that one of their nephews could make the payments and gradually become a home-owner himself — except he was unable to pay the mortgage, and he moved a couple of his ne’er-do-well friends into the house who also felt no obligation to pay rent. The couple is faced with evicting their nephew and his friends and paying to have the property cleaned up so it can be sold, so they can get out from under the mortgage.
• 75-year-old widower’s son used a Power of Attorney to withdraw all of his father’s tax-deferred retirement savings — more than $100,000 — and spent it to shore up his failing business. Not only is the money gone, the retiree is making payments to the IRS for the income taxes that became due when the savings was withdrawn.

Although it is shocking, similar occurrences happen every day. And the worst part is that the legal remedies we have against the bad actors are slow, expensive and unsatisfying. If your son took all your retirement savings and spent it on “lifestyle” — vacations, restaurant meals and liquor, jewelry and the like — or business expenses, the money is gone, and it becomes very difficult to squeeze money out of deadbeats. Many times, the children claim these transfers of wealth were “gifts.” Even if you and I know these children are liars and thieves, it will be time-consuming and expensive to prove it. Will you have the money to hire a lawyer to pursue them? Will you have the mental fortitude to undertake the pursuit?

Don’t run any risks with your financial independence. Many of us have reliable, trustworthy children, and we want to help those we love. Those who love you, however, would not want you to assume the risk of becoming needy and dependent.