HOW TO PROTECT YOUR ELDERLY PARENTS FROM FINANCIAL EXPLOITATION

As parents age and their physical and mental capacities diminish, it's natural for their adult children to step in and help them. Often, a specific child will take over the bulk of the responsibilities, such as taking the parent to doctor’s appointments or helping out around the house. As the parent begins to depend on the child more and more, it makes sense to appoint the child as a trusted decision-maker or even to give them a larger inheritance to compensate them for their time. At the same time, other family members may feel cheated. In this article, we'll discuss the signs that your elderly parent is being manipulated by their caretaker, and what you can do about it.

WHO IS SUSCEPTIBLE TO FINANCIAL EXPLOITATION?

With more people living into their eighties and nineties, elder abuse is a serious and increasing problem in our society. Elder abuse can take several forms, such as physical, emotional, verbal, and financial. Up to one-half of all elder abuse in the United States is financial exploitation, which is what we will focus on in this article. 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 document.

Research shows 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 help with daily tasks, including home maintenance, bathing, 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 living alone with few friends or family members visiting

• 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

Often, people who use undue influence to financially exploit an elderly person start with good intentions. They just want to help their mom or dad. But, as time goes on, whether because of resentment, 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 manipulates the elderly person, financial exploitation can occur at the hands of anyone that person trusts. Sometimes a neighbor, fellow church-goer, housekeeper, or even professional adviser takes advantage of the situation for personal gain.

WARNING SIGNS OF ELDER ABUSE

Below are some warning signs that a caretaker has crossed the line into financial exploitation:

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

• Unusual charges on the elderly person’s credit card, debit card, or bank account

• Unexplained account transfers to another institution or person

• Changes to estate planning documents, such as a power of attorney, will, or trust, giving the caretaker more money and/or power than in previous documents

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

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

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

• The elderly person's bills going unpaid or the elderly person expressing concern about not having enough money to pay bills, when this was never the case before

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

WHAT YOU CAN DO IF YOU SUSPECT ELDER ABUSE IS HAPPENING

If the abuse is of a physical nature, it's a good idea to get the police involved. If the abuse is of a financial nature, there are legal routes you can take to protect your parent or grandparent. An experienced probate litigation or elder law attorney will be able to help.

If you are trying to prove that a will or trust was changed because of undue influence, you must prove that someone (we'll call them 'the villain) forced the elderly victim to change their estate plan. Specifically, in such an extreme way that the villain took the victim's free will away, and their wishes are no longer reflected in their estate plan. You will also need to show that the victim was in a physical and/or mental state that allowed for manipulation. An experienced probate litigation attorney can help you obtain the necessary evidence you will need to prove your case.

HOW TO PREVENT FINANCIAL EXPLOITATION

To prevent financial exploitation from happening, it's a good idea to get some estate planning documents together. An experienced estate planning attorney can help you create a will, trust, advanced directives, and power of attorney that explicitly list what you want to happen with your finances if you become unable to take care of them on your own. By planning ahead, you avoid the need for such extreme measures like a guardianship.

Although the estimated annual cost of elder financial abuse is billions of dollars, it regularly goes unreported. Oftentimes, the abuser is a family member or trusted caregiver, and the elderly person is either unaware of the abuse or is too embarrassed or afraid to report it. By being aware of the warning signs and helping to create a support system around the elderly person, you greatly reduce the risks.

We can help you take the steps necessary to protect yourself as you age and to protect your vulnerable loved ones. Call us at 614-389-9711 so we can discuss the appropriate steps to take.

To learn more about estate planning, read our Consumer's Guide to Estate Planning in Ohio here.

Sources

Bennett Blum, M.D., Elder Financial Abuse and Financial Exploitation, Forensic and Geriatric Psychology, http://www.bennettblummd.com/elder_abuse_financial.html (last visited Apr. 27, 2022).

Michael J. Tueth, M.D., Exposing Financial Exploitation of Impaired Elderly Persons, 8 Am. J. Geriatric Psychiatry 104 (2000), https://www.ajgponline.org/article/S1064-7481(12)61467-5/fulltext.

Martin Hagan, Financial Exploitation of the Elderly through Undue Influence: How to Spot It and What to Do about It, Martin Hagan’s Estate Planning Resource Center, https://haganlaw.net/?page_id=95 (last visited Apr. 27, 2022).

Marguerita Cheng, Elder Financial Exploitation: Warning Signs, Prevention and Reporting, US News and World Report (May 27, 2021, 2:09 PM), https://money.usnews.com/money/blogs/the-smarter-mutual-fund-investor/articles/elder-financial-exploitation-warning-signs-prevention-and-reporting.