Silver Planet™ Help Your Parents Age in Place.

Physical abuse is a pattern of coercive control, or an act or threatened act of violence. Often, the victim is not only physically harmed but is also rendered dependent, helpless, and fearful. Emotional and psychological abuse frequently attends the physical violence.

Abusers often leave telltale signs of physical and emotional maltreatment:

Financial exploitation is the second most common form of elder abuse. Exploitation is theft, pure and simple. Theft by strangers includes lottery scams, telemarketing and sweepstakes fraud, identity theft, and other con games. But theft by those who aren’t strangers is more subtle, hidden, and insidious.

The most common form of elder abuse is neglect. Your state’s criminal statutes likely prohibit a pattern of conduct that deprives someone of some necessity for physical or mental health. We all need food, water, shelter, appropriate heating or cooling, and medical services to maintain health. Caregivers who consistently fail to deliver these things are abusers.

Telltale signs of neglect

Last year, I was privileged to attend a training course on elder abuse with some of Colorado Springs’ finest. Under a grant from the U.S. Department of Justice, Office on Violence Against Women, 50 or so police officers, detectives, and I spent two days of intense immersion into the social crisis of elder abuse. The statistics were grim; the videos horrific. We left with an increased awareness and recognition of the tactics that abusers use to victimize those over 60 years of age. My next several blogs will convey some of what I learned.

This final posting on reverse mortgages is more of an editorial. One last drawback to them is the aggressive and often misleading advertising targeting seniors. The promotional copy is often designed to tap into our most primitive emotions—fear and greed—to get you to sign on.

I received one such pitch in the mail a few weeks ago. The mortgage lender was hoping that I would pass on the “newsletter” to my elder law clients. I won’t. What follows are some of its claims and my parenthetical thoughts.

By far the biggest downside of reverse mortgages is the high cost imposed on the senior. Front-load fees, closing costs, and mortgage insurance may eat up 7% to 10% of the home’s value. Recent federal law has eased this burden somewhat, capping origination fees at 2% for the first $200,000 and 1% on any amount over that, with a total cap of $6,000.

Seniors have been tempted, this year more than ever, to access cash through this government-insured program. The obvious appeal is cash flow into a checking or savings account, rather than out. Proceeds from a reverse mortgage are used to pay off an existing mortgage more than 85% of the time. Any amount that exceeds the previous conventional mortgage balance is just money in your pocket. For those seniors who have seen their IRA balances plummet 30% to 40% in the last year, this cash seems like a godsend.

Federally insured reverse mortgages, also called home equity conversion mortgages, have been available since 1990. Aggressive marketing, the deflation of the housing bubble, and last year’s stock market crash have all contributed to a surge of interest. Applications are expected to exceed 120,000 for 2009.

In some cases, the decision about whether or not to purchase long-term care insurance is easy to make. If your assets are below $250,000, or your current cash flow could not sustain the monthly premiums, consider forgoing coverage. On the flip side, if your assets are above $1.5 million, you might consider self-insuring.

If you have decided that purchasing a long-term care policy is right for you, here are some suggestions:

Buyers of long-term care insurance are often motivated by the expanded choice of care facilities that insurance provides. No longer are they limited to nursing homes and assisted living campuses that accept Medicaid. Don’t assume, however, that those facilities are somehow substandard or less than desirable. Do your homework and visit the homes in your area before you conclude anything.