The reported circumstances of a debilitated elderly widow (Auntie Em) in our midst is sadly, all too common in this age where longevity patterns prevail in the population.

Elderly people are vulnerable to pressure or subject to emotional neglect, humiliation, coercion, ostracisation, theft of assets, and abuse not just from family members, but, from unethical care givers, itinerant maintenance workers and others.

Circumventing trust is pretty easy for anyone intent on putting their own needs first, particularly, if the elderly individual is infirm, lacking in mental capacity, and bedridden. Except for any financial assets, these elders are regarded as throwaway commodities, of little value to anyone.

Samaritan individuals have stepped forward to express their concern, while providing substantive assistance.

These tremendously empathetic efforts, on the surface, will not change the prevailing decision - if newspaper reports are accurate - that this dignified lady has been, or will be sent back to her home with the same family and the same complete lack of compassion.

Why and how could this type of situation happen?

No estate planning means no control. Let's extrapolate briefly with a couple of composite cases culled from many years of experience amongst professionals providing financial planning.

Composite Case A: Uncle Z (in his seventies) loses his dear spouse. He is lonely, not well, and no longer able to maintain the old homestead. His daughter and spouse make an oral proposition. They will move in and in lieu of paying rent, will provide care for him (and the home) for the rest of his life. What a win-win situation for everyone since he would probably leave the house to them, anyway.

Uncle Z then conveys a joint interest in his home (debt-free) to his daughter, along with putting her name on his bank accounts. His health worsens; the situation deteriorates rapidly. He begins to be emotionally cut off from outside communication (including reaching his lawyer) while his financial resources are now controlled by his family members.

His world shrinks to the size of his bedroom. Meanwhile, daughter decides to build an investment property, using her interest in the homestead as collateral.

The mortgage payments are high; the spouse has job difficulties. They rapidly draw down Uncle Z's cash. There is less of everything in the daily budget, and nothing to care for this kindly relative. Ultimately, the spouse is threatening divorce (requesting 50 percent of all assets), and the entire family is in crisis.

Composite Case B: Granny in the garage. At age 85, she has a simple elegant life: outings with her friends, bridge, and an occasional trip. Her pension and studio apartment rent are enough to live on, carefully. After an expensive divorce, her only child remarries.

"Let's put the house in our joint names!" Before she can say, "how wonderful that the family is together," son announces that he is renovating the property. The main house is rented for a tidy sum; she is relegated to the studio apartment. Son and new wife head overseas to new location, new careers.

The pain is devastating. Ashamed and humiliated now struggling to make ends meet, she cuts off ties with her friends and slides downward into depression.

Who are the winners in the current elder case?

There is only one - the beneficiary (relative caregiver) of the estate, but there are plenty of losers!

1. Government for having to assume complete costs for this dear lady's intensive care.

2. We, the taxpayers, who will ultimately foot the bill for another family gone wrong.

3. The whistleblower who may be castigated for airing family laundry.

4. The elderly lady is the saddest loser - she may lose her family, her place in society, control of her life, and possibly her home.

Working out just as if it was planned, the beneficiary is in possession of the home, no longer responsible for the elder's care. It is a waiting game and time is on her side. Regardless of the negative publicity, the goal will be achieved, owning an asset, and rid of additional responsibilities.

Prevention: The following suggestions will generate resistance, but it is worth noting that in countries such as Australia, any large changes in personal financial structures, i.e. conveyances, purchasing a home, investing a lump sum, changes in wills that tilt the beneficiary balance, etc. mandate a visit to an Australian qualified financial advisor.

• Encourage among professionals (it's hard to mandate) to make basic estate planning a prerequisite to elder family sharing arrangements.

• Establish an oversight independent trustee to review current asset titling and property conveyance changes when elderly are involved.

• Consider attaching liens to the property if negligence charges are forthcoming to avoid inadvertent rewards and opportunity to profit from the situation.

Remedies for current cases

• Conveyances engineered by relatives to the elderly person's detriment should be declared null and void, including property, bank accounts, rights to pensions, life insurance, etc.

• The elderly individual needs to execute a new will, removing abusive individuals from any legacy entitlement.

• If the elderly person is able to return to the home, Government should consider acting as the reverse mortgage provider to provide funding for care - similar to Medicaid provisions in the United States.

• If the elderly person cannot return to the residence, the property becomes an income generating asset. It could be renovated, rented, or sold. If joint tenancy is an issue, the Courts may be able to intervene to set aside the gift in the best interest of the elderly owner.

• Proceeds from the sale of residence can be handled variously: managed by an independent investment manager (with trust attorney oversight) appointed by the courts, or the lump sum converted into an immediate annuity for her remaining life with the residual designated (if the individual requests) as deemed appropriate for the estate.

• A commercial reverse mortgage might also fit the bill, as long as the payments were not controlled by the family, but currently, these are not offered.

As is often the way, seniors tend to resist making any decisions in estate planning. It is emotionally very difficult to put aside reticence and pride to consult with an independent professional who can sort through all their issues and provide objective advice.

Every family planning case is different, but except in very extenuating circumstances, I generally advise elderly clients not to give up control of assets to their children during their lifetime.

It is a controversial recommendation, not always well received. While some families have received great emotional rewards in sharing of their assets in their elder years, for others, giving up control has meant losing control - of one's environment and dignity.

Government Power for the People. It is hoped that our government (which has instituted many types of complex legal structures for international business) and agencies funded by same can put their figurative heads together soon to implement a solution that benefits our elderly.

Meanwhile, esteemed lobbyists for elderly social justice such as Claudette Fleming, Age Concern; Marian Sherratt, Bermuda Council on Ageing (BCA), and social agencies and humanitarian health care professionals will lobby on. They are to be applauded.

Martha Harris Myron CPA CFP® is an internationally qualified (dual citizen US and Bermuda) Wealth Manager at Argus Financial Limited. She specializes in investment advisory services and comprehensive financial planning solutions for private clients, successful business owners and their families. DirectLine: 294 5709 Confidential email can be directed to marthamyron@northrock.bm

The article expresses the opinion of the author alone. Under no circumstances is the content of this article to be taken as specific individual investment advice, nor as a recommendation to buy/ sell any investment product. The Editor of the Royal Gazette has final right of approval over headlines, content, and length/brevity of article.