With the aging population, financial elder abuse is a significant and growing problem that affects millions of older adults each year.

Elder financial abuse involves the illegal or improper use of an elder’s funds, property, or assets. It is a crime that can be perpetrated by strangers, caregivers, and sadly, even family members.

The methods of elderly financial exploitation vary. Scammers might employ phone scams, email phishing, or fraudulent investment schemes. They play on fear or urgency, convincing the elderly to part with their money. Caregivers or relatives might misuse their trust or authority, manipulating their loved ones into giving them access to bank accounts or valuable possessions.

Every member of our team knows someone who has been impacted by acts (or attempts) of financial exploitation, including the following scenarios:

• Family Member Exploitation. One of our clients was recently diagnosed with Alzheimer’s disease. After the diagnosis, her son took her across the country to his home, raising suspicions about his intentions. It appeared he was trying to gain control over her finances. We alerted her daughter, who was listed as a trusted contact. She hired a lawyer, and the case went to court. Ultimately, the daughter was granted conservatorship over her mother and her finances, ensuring that they were protected. Unfortunately, the client has not since heard from her son.
• Scam by Impersonation. A relative was deceived by someone impersonating a PayPal representative. The scammer gained access to her account information and manipulated her into paying a large sum of money, which to date has not been recovered. This case highlights the importance of being vigilant about potential scams and educating older adults on how to recognize and avoid them.
• Trust Exploited in Assisted Living. A relative in an assisted living facility lent money to an aide who promised to repay it. Although the money was eventually returned, this situation was inappropriate and could indicate a broader issue within the facility. It’s crucial to have open conversations with older relatives about such incidents to ensure that they feel comfortable reporting them.
• Romance Scam. A 25-year-old man convinced an 80-year-old woman with dementia that he was in love with her and proceeded to have a private wedding ceremony without witnesses. He spent as much of her money as he could before she passed away a few months later from pancreatic cancer and then claimed that she rewrote her will to leave everything to him, producing a handwritten will, also without witnesses or notarization. Sorting it out took eight years in court and cost the family hundreds of thousands of dollars in legal fees. Thanks to the trust structures she had created when she was sound in mind, the family was able to preserve a good portion of her wealth, but millions of dollars were lost. Without the trust structures, however, it is likely that everything would have been lost.

The consequences of elder financial abuse can be devastating. Financial losses can be substantial, often leaving victims destitute and unable to support themselves. Beyond the monetary damage, the emotional toll can be severe, leading to depression, anxiety, and a loss of trust.

Detection is challenging because the signs can be subtle. Unusual bank activity, missing belongings, or changes in wills and financial documents can be red flags. However, seniors may be too embarrassed or afraid to report the abuse, particularly if family members are involved.

Importance of Communication and Preventative Measures

It is essential to have conversations with older relatives about the risks of financial elder abuse.

Many seniors feel shame and embarrassment when taken advantage of, which can delay reporting and make it harder to recover lost assets. Cognitive decline can also make older adults more vulnerable, underscoring the importance of having a Power of Attorney in place and having assets held in trusts with successor trustees named.

Preventing elder financial abuse requires vigilance and education. Families should have open discussions about finances and the importance of safeguarding personal information. Institutions should implement stronger safeguards and regular monitoring to detect irregularities.

You can consider these proactive steps to help safeguard the dignity and financial security of our elderly loved ones:

1. Designate a Financial Power of Attorney. Choose a trusted individual to manage financial affairs if the elder becomes incapacitated.
2. Prepare Appropriate Trust Structures. There are a variety of trust structures that can protect family members and make it more difficult for scammers to access their wealth. Setting these up early allows for your family to have reliable trustees and successor trustees in place in case the need arises.
3. Appoint a Trusted Contact. Authorize a bank or financial institution to contact a trusted person about questionable activity.
4. Stay Connected. The most vulnerable elderly are those who have lost regular contact with friends and family, becoming isolated. It is much harder for scammers to succeed when family and friends are involved in the daily life of their loved ones.
5. Monitor Financial Activity. Regularly check bank statements and financial transactions for any unusual activity.
6. Educate Seniors on Scams. Inform older adults about common scams and how to avoid them.
7. Vet Caregivers. If you hire caregivers, check references or go through a reputable agency. Watch for red flags in your loved one, like impatience, unusual mood changes, secrecy, isolation or withdrawal from family and social activities, or unexplained bruises or injuries.
8. Legal Protections. Understand and utilize legal measures, such as conservatorships and guardianships, to protect vulnerable elders.
9. Authorize Trusted Family Members Only.  When establishing your account with Medical Care Alert, only add trusted family members or friends to your loved one's emergency contact list.  Only those on the contact list may have any information about the account.  We can also establish a passcode or other means of two-factor identification to keep your account securel.

As always, consult with your accountant, tax advisor or elder law attorney before implemeting any of these ideas.  This content is provided for educational and entertainment purposes only and is not intended to be financial or legal advice.