Estate PlanninG

Preventing Financial Exploitation of the Elderly

With more people living into their eighties and nineties, elder abuse is becoming increasingly common. Have you seen the 2020 Netflix movie I Care a Lot about the manipulative legal guardian who drains the savings of her elderly wards? Unfortunately, there are people in the real world who similarly try to take advantage of the system.

Elder abuse is the mistreatment or harming of an older person. The types of abuse can vary from physical, emotional, sexual, or financial. Financial exploitation and extortion are the most common. Abuse can happen for many reasons, including a lack of support services, community resources, and/or ageism.

About one-half of all elder abuse in the US is financial exploitation.

Who Is Vulnerable to Financial Exploitation?

Financial exploitation includes outright theft of money or property, illegal transfers of property, identity theft, and misusing a position of trust, such as through a power of attorney.

Research has shown that the following characteristics indicate that an elderly person is more likely to be financially exploited through undue influence:

  • Physical limitations that require them to depend on others to perform daily living activities such as home and yard maintenance, personal health and hygiene, preparing meals, paying bills, and transportation

  • Mental limitations resulting from medication side effects, dementia, or injury

  • Having recently experienced the death of a close loved one, such as a spouse or sibling

  • Social isolation that results from few family or friends who visit or living alone with little or no access to community activities or healthcare services

  • Experiencing anxiety or depression caused or worsened by loss or isolation

  • Being generally naive and extremely trusting

  • Having little to no knowledge about their financial situation or little to no experience handling finances, for example, if their recently deceased spouse handled all the finances

People who use undue influence to financially exploit an elderly person don’t usually begin helping them with the intent to manipulate or exploit. But as time goes on, whether because of resentment or entitlement, the helper begins to feel justified in helping themselves to the elderly person’s money and property.

Most often, a family member is the one doing the exploiting. But financial exploitation can also occur at the hands of any person the elderly trusts, like a neighbor, fellow church-goer, housekeeper, or professional advisor.

The Warning Signs of Exploitation

As parents age and their physical and mental capacities diminish, it’s natural for their adult children to step in and help. Often, a specific child will take over the bulk of the responsibilities such as taking the parent to doctor’s appointments or the attorney’s office. As the parent begins to depend on the child more and more, it may make sense to appoint the child as a trusted decision-maker, and even to give them a larger inheritance to compensate them for their time. At the same time, other family members must take extreme care to ensure that the elderly parent is not being exploited by a manipulative caretaker.

Below are some warning signs that a dutiful caretaker has crossed the line into elder abuse:

  • Disappearance of the elderly person’s cash or valuable possessions

  • Unusual charges on the elderly person’s credit or debit cards or unusual withdrawals from their bank accounts

  • Unexplained transfer of accounts to another institution or person

  • Changes to legal documents, such as a power of attorney, will, or trust by the elderly person naming the caretaker to trusted positions or granting an inheritance or a larger inheritance, particularly when such a change goes against the elderly person’s previously expressed wishes

  • Placing the caretaker’s name on accounts as a joint owner or payable-on-death beneficiary

  • Signatures other than the elderly person’s signature, or forged signatures, appearing on checks or credit card or loan applications

  • The caretaker socially isolating the elderly person by limiting their access to communication (phone, mail, or email) or social visits or disallowing privacy on the phone or with visitors

  • The elderly person’s bills going unpaid or the elderly person expressing concern about not having enough money to pay bills when there is sufficient income or other financial resources available

  • Unexplained changes in the elderly person’s demeanor or interests

How to Fight Against Exploitation

The estimated annual cost of elder financial abuse is billions of dollars. However, it regularly goes unreported because the abuser is often a family member or trusted caregiver, and the elderly person is either unaware or too afraid to advocate for themselves.

Some steps for preventing abuse:

  • Learn to recognize the classic signs of abuse.

  • Check in on your elderly family members to make sure they feel connected and are being taken care of. Help create a community network around them

  • Take careful and appropriate steps to plan for their decreasing ability to manage their finances, such as setting up automatic bill pay or creating a power of attorney or trust

  • Stay up-to-date on the latest scams, such as Social Security scams or COVID-19 scams.

Everyone deserves to be treated with dignity and respect as they age. It will take a willingness and collective effort to recognize abuse and exploitation, and speak up when they see it happening.

We can help you take the steps necessary to protect yourself as you age or to protect your vulnerable loved ones. Contact us so we can discuss the appropriate steps to take: Call Santaella Legal Group, serving San Ramon, Danville, Dublin, Pleasanton & the Tri-Valley area at (925) 831-4840.

Read more:

Elder Abuse: What Is It, How to Recognize It, And How To Fight Against It

Are Your Seniors Being Financially Exploited?

Elder Law Resources

When Can Someone Be Declared Legally Incompetent?