As parents age and their physical and mental capacities diminish, it is natural for their adult children recognizing the parents’ decreasing ability to care for themselves, to step in and help them. Often, a specific child will take over 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 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 a manipulative caretaker is not exploiting the elderly parent.
Who Is Susceptible to Financial Exploitation?
With more people living into their eighties and nineties, elder abuse is a serious and increasingly common problem in our society. Elder abuse can take several forms, including physical, sexual, emotional, and verbal abuse or caretaker neglect or exploitation. Up to one-half of all elder abuse in the United States is financial exploitation, which is the aspect this article focuses on. 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 incredibly 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
Often, people who use undue influence to exploit an elderly person financially do not begin helping them with the intent of using the older person’s trust to manipulate or exploit them; nevertheless, as time goes on, whether because of resentment or entitlement, or another reason, the helper begins to feel justified in helping themselves to the elderly person’s money and property.
Although it is most often a family member who financially exploits the elder person through undue influence, financial exploitation can also occur at the hands of any person whom the older person trusts, such as a neighbor, a fellow member of a religious organization, a housekeeper, or a professional adviser.
Exploitation Warning Signs
Below are some warning signs that a dutiful caretaker has crossed the line into elder abuse:
●The 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 isolates 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 Prevent Financial Exploitation
Although the estimated annual cost of elder financial abuse is billions of dollars, it regularly goes unreported because the abuser is often a family member or trusted caregiver. The elderly person is either unaware of the abuse or too embarrassed or afraid to report it. Yet by being aware of the warning signs and helping to create a community network around the elderly person, as well as taking 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, you can significantly reduce the risks. We can help you take the steps necessary to protect yourself as you age or to protect your vulnerable loved ones.
At Cheever Law, APC, we don’t just draft documents; we ensure you make informed and empowered decisions about life and death for yourself and the people you love, which starts at a valuable and educational Family Wealth Planning Session. The Life & Legacy Planning Session will allow you to get more financially organized than you’ve ever been before and make all the best choices for the people you love. If you have already completed your estate plan, we will review that plan at your Life & Legacy Planning Session (aka Family Wealth Planning Session) to ensure that it will work the way you intend and address any holes or gaps that may be present if circumstances have changed since you executed your plan.