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Defining Elder AbuseFinancial AbusePreventing Elder Abuse

Elder Financial Abuse and How to Prevent It

By Walton Law APCMarch 11, 2019September 13th, 2023No Comments

One of the most vulnerable and overlooked populations in the United States is people over the age of 65.  Loved ones are usually on the lookout for things such as physical, verbal, and psychological abuse of the elderly.  However, too often, financial abuse is overlooked.  To make matters worse, the perpetrators of financial abuse are frequently the family, friends, and caregivers of the elderly.

What is Financial Abuse?

The Elder Abuse and Elder Financial Exploitation Statutes define elder financial abuse as:

Fraudulent or otherwise illegal, unauthorized, or improper act or process of an individual, including a caregiver or fiduciary, that uses the resources of an endangered or an impaired person or long-term care facility resident for monetary or personal benefit, profit, or gain or that results in depriving the person or resident of rightful access to or use of benefits, resources, belongings, or assets.”

Many elderly people designate a fiduciary.  By definition, a fiduciary has a legal responsibility to:

  • Make decisions that benefit the person for which the decisions are made.
  • Act in good faith and with fairness.

Examples of fiduciaries include:

  • A trustee;
  • A guardian;
  • A conservator (protector of assets);
  • An executor;
  • An agent under the financial power of attorney or health care power of attorney; and/or
  • A representative payee (someone who accepts benefits on the behalf of an impaired person and responsible for the management of benefits such as Social Security payments).

So, what does elderly financial abuse look like in the real world?

Quick Fact: The perpetrator of financial elderly abuse is usually someone close to the victim such as:

  • Family members;
  • Caretakers;
  • Neighbors;
  • Friends and acquaintances; and/or
  • Health care providers.

Common Financial Abuse Schemes

Unfortunately, there are many types of schemes used against elderly people.

Institutional Financial Schemes

  • Predatory Lenders – Lenders sometimes target elderly individuals to take out reverse mortgages even when it is harmful.
  • Investments – Institutions and people looking for investors often target elderly people. This is commonly done by a family member as well.
  • Stolen Identity – Many elderly people are not current on technology, processes, and abilities of people with respect to identity theft. They may not regularly check their credit reports and credit card statements.

Scam Artists

  • Home Repair – This usually starts with a phone call or a knock on the door. Sometimes the “contractor” will say they noticed some things that need repair and they will insist on money up front.  Then, they leave without completing the work.
  • Law Enforcement – A scammer calls and says the elderly person owes a fine. Another common technique is to call and say their grandchild has been arrested and they need bail money.
  • E-mail – This is common to all age groups, but elderly people are especially susceptible. They get an e-mail that looks like it is from the state or federal government, which says they must provide identifiers (social security number, credit card information, date of birth, etc.).  This leads to identity theft.

Those Closest to the Victim

The people that are supposed to care for and protect the elderly often hurt them the most.  Examples are:

  • Bank Fraud – A friend or relative takes the elderly person’s checks and/or bank cards and withdraws money for themselves.
  • Threats – A caregiver tells the elder they will hurt them or a loved one if they do not pay.
  • Neglect – Someone close to the elder threatens to withhold food, medication, or refuses to help with hygiene unless there is payment.

The people that are charged with the responsibility of caring for the elderly are too often at the center of abuse.

While it can be unsettling that you or a loved one are left exposed to the whims of a fiduciary, actions can be taken to mitigate or prevent elderly financial abuse.

Did you know?

According to the True Link Report on Elder Financial Abuse 2015, it is estimated that over $36 billion are fraudulently taken from the elderly every year. 

Financial Abuse Prevention and Mitigation

Elderly financial abuse is a scary topic, but there are things which can be done to prevent it.  Planning is essential.  A revocable living trust could greatly benefit an elder seeking to protect their assets while they are alive.  This type of trust is unique because:

  • It allows the settlor (the owner of the assets) to place assets in a trust to be managed.
  • This type of trust can be changed or completely revoked if needed.
  • Probate court can be completely avoided which means the estate will not be diminished by fees and court costs.

According to the American Bankers Association, other ways to prevent elderly financial abuse include:

  • Shredding all bank receipts, cards, and voided checks before throwing them away.
  • Never pay taxes up front for supposed lottery winnings.
  • Pay with checks and credit cards to create a paper trail.
  • Do not be afraid to say “no” and resist financial pressure.
  • Deeply consider who will oversee finances. Do not simply choose the oldest child or grandchild.  Consider the person.
  • Do not give up the home. Many times, the first instinct when trying to protect this asset is to sign it over to a relative.
  • Avoid joint bank accounts. This greatly reduces the amount of control over the money within the accounts.

If You or a Loved One Are a Victim of Elderly Financial Abuse

Most importantly, if there is physical harm or immediate danger, call 911.

It is important to identify who has your immediate well-being at heart.  If you have identified that person, talk to them.  Other people to look to for counsel include:

  • A clergy member;
  • An attorney;
  • Your doctor;
  • An officer at your bank;
  • Adult protective services; and/or
  • Your state’s Ombudsman office.

If you or a loved one have been the victim of elder financial abuse, you need the help of a skilled and licensed attorney.  Christopher C. Walton is an award-winning elder abuse attorney who serves the San Diego and Temecula Valley Regions.  Contact Chris today at (866) 338-7079 or click here for a free consultation.

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