Often times in our post acute care community we hear about the financial troubles of our elderly patients. We decided to share some information regarding the ongoing financial plight of America’s elderly.
The amount of debt held by seniors over the age of 55 increases every year. According to latest US Census Bureau report, 44.4% of households led by people older than 65 are in debt. The top reasons for this debt include, but are not limited to, home mortgages, student loans, and credit cards. Home mortgage debt became a bigger issue after the housing market crash in 2008. In 1992, only 24% of homeowners over the age of 62 had mortgage debt, but by 2010, 45% of homeowners of 55 had mortgage debt. Student loans has also become a rising issue since parents and grandparents decide to cosign student loans in order to support their family members while they go to college. Borrowers 60 and older remain the fastest-growing age group for student loans, which tripled since 2005.
Having to pay off debt puts a financial burden on an elderly household because this takes away from their limited available income that is supposed to be used for other living expenses.
Dying with Debt
There are legal regulations as to who is allowed first claim to retrieve money from your estate after you pass away. First, the top priority goes to funeral expenses, administrative expenses, and federal taxes. Second, then the estate may pay off expenses from the last illness and state taxes. Lastly are unsecured creditors, like credit card companies.
Generally speaking, a family member would be only become responsible for your debt if they co-signed a loan with you. Except in certain situations, like joint property or joint debt, creditors will not burden surviving family members when estate money does not cover the debt amount. However, most married couples have joint accounts and joint debt. In these situations, a surviving spouse will be held legally responsible for the debt accrued by their deceased spouse. This will often cause problems for surviving spouses who financially cannot afford to pay off old debt as well as sustain their everyday needs.
Financial Abuse as a Hit to Income
According to a study executed by Duke University, 8.75 million people in the United States of America above age 71 have mild cognitive impairment or dementia. With these diseases, it leaves those who are suffering from memory loss susceptible to financial abuse. Financial abuse can occur in multiple ways. Because of their confusion about handling their own financial affairs, elderly people are often preyed upon by individuals trying to take away their money. 7.3 million people, have been victims of financial swindles. Elderly people are also likely to be financially abused from their family members. According to some cases, 20% of seniors are suffering abuse either in the form of physical abuse, self-neglect or financial abuse. It is also estimated that the bulk of this abuse occurs at the hands of family caregivers who will most likely steal or manipulate the money from the loved they are caring for.
Practitioners who assist seniors with their finances should be aware of the following signs in order to prevent elder financial abuse from happening:
- Reluctance to share any financial information
- The person being cared for is confused or frightened
- There is durable power of attorney or guardianship
Real People. Remarkable Care. South Coast Post Acute.