According to the United States Department of Justice, financial exploitation of the elderly is one of the most frequently reported forms of elder abuse. The National Center on Elder Abuse estimates that such abuse costs older adults around $2.9 billion annually, a problem that’s only expected to increase in the coming years as the elderly population grows. By 2030, people aged 65 and older will constitute 20% of the total U.S. population with those aged 85 and older ranking as one of the fastest growing populations in the country.
What Is Elder Financial Abuse?
The federal Elder Justice Act, enacted in 2010, defines financial exploitation of the elderly as, "the fraudulent or otherwise illegal, unauthorized, or improper act . . . that uses the resources of an elder for monetary or personal benefit, profit, or gain, or that results in depriving an elder the rightful access to, or use of, benefits, resources, belongings, or assets."
Given their advanced age and increased dependence on others coupled with the fact that older adults tend to have more financial assets, the elderly are particularly vulnerable to financial exploitation. This is especially the case where an elderly individual suffers from dementia or some other mental incapacity that weakens their ability to make sound financial decisions.
Who Engages in Elder Financial Abuse?
Elder financial abuse can take many forms, including scams by telemarketers or other con artists, forgery, identity theft, or the use of undue influence to pressure an older adult to transfer his or her assets. Close to 90% of elder financial abuse takes place in domestic settings instead of long-term care facilities and is normally caused by family members. This can be done through promises of lifelong care or through the use of a power of attorney authorizing the perpetrator to access an elder's financial assets. Signs of elder financial abuse include:
- Diminished health or mental capacity of the elder
- Growing interest in the individual's assets, including his or her financial accounts and real property
- Unusual bank account activity
- Financial transactions that the elder has difficulty explaining
- New “best friends”
- History of substance abuse, gambling, or financial problems in the family
- Disputes regarding future inheritance
- Efforts to make the victim amend his or her estate planning documents, including any powers of attorney, wills or trusts
Laws Protecting Against Elder Financial Abuse
At the federal level, the Elder Justice Act provides for greater coordination among federal and state agencies dealing with elder abuse cases and expands reporting requirements. In addition, although it has yet to become federal law, the Elder Abuse Victims Act would provide greater federal support for the investigation and prosecution of elder abuse cases.
Most laws protecting against elder financial abuse exist at the state level.
It’s important to note that elder financial abuse can exist even where the victim has mental capacity. Most states recognize that undue influence or coercion can negate consent, even where an older individual is of sound mind.
What to Do if You Suspect Elder Financial Abuse
If you suspect that elder financial abuse or exploitation has occurred, contact your local Adult Protective Services office. The Elder Justice Initiative of the U.S. Department of Justice also contains support resources by state. In addition, if the victim has an attorney, particularly an estate planning attorney, that attorney should be advised of any suspected financial abuse, especially where an individual is being pressured to revise his or her estate planning documents.