Financial exploitation of older relatives

Financial exploitation of older adults is common, substantially under-reported, and most often committed by family members or others in a trusted position.

What it looks like

Misuse of a power of attorney to benefit the agent rather than the person.

Adding a name to accounts or property titles.

Persuading someone to change their will or beneficiary designations.

Taking money for care that was not provided, or in excess of what was agreed.

Isolating the person from other family and from professionals.

Using the person's funds for the exploiter's own expenses.

Much of this occupies a grey area — an adult child living rent-free while providing care, or making purchases that arguably benefit the parent — which is what makes it difficult to address.

The warning signs

Unexplained withdrawals or transfers.

New names on accounts or deeds.

A new adviser, attorney or financial arrangement that other family members knew nothing about.

Changes to estate documents, particularly benefiting the person managing the finances.

Reduced contact between the person and other relatives, frequently explained by the person managing them as the older person's own preference.

Unpaid bills despite adequate resources.

The person appearing anxious or deferential around one particular individual.

None of these individually establishes anything. Several together warrant attention.

What to do while the person is alive

Talk to them directly, alone, without the suspected person present.

This is frequently difficult to arrange, and difficulty in arranging it is itself informative.

Contact adult protective services. Every state has an agency responsible for investigating suspected exploitation of vulnerable adults.

Reports can generally be made anonymously, and the agency has investigative powers a family member does not.

Contact the financial institution. Many now have procedures for reporting suspected exploitation, and federal guidance encourages them to act.

Where a trusted contact has been named on the account, the institution may contact them.

Consult an elder law attorney about the options, which may include seeking an accounting from an agent under a power of attorney.

An agent owes fiduciary duties and can be required to account.

Consider guardianship or conservatorship where the person lacks capacity and is being harmed.

This is a serious step that removes rights and should not be pursued lightly, and it is sometimes the only effective protection.

Report to law enforcement where a crime appears to have been committed.

What can be done after death

Where exploitation is discovered during administration.

An executor has an obligation to investigate and, where appropriate, to pursue recovery for the estate.

The potential claims include breach of fiduciary duty by an agent, undue influence over transfers or documents, conversion, and unjust enrichment.

Some states have statutes providing enhanced remedies for financial exploitation of vulnerable adults, including in some cases multiple damages and legal costs.

Some also provide that a person who wrongfully obtains property from a vulnerable adult may forfeit their inheritance.

Evidence is the difficulty. Bank records, medical records addressing capacity, the attorney's file, and testimony about the person's circumstances and relationships.

Limitation periods apply and vary, which argues for prompt advice.

Protecting against it in advance

For the person themselves, or for a family arranging matters.

Name co-agents under a power of attorney, or require periodic accounting to a third party.

Name a trusted contact on financial accounts.

Arrange that a second family member receives duplicate statements.

Use a professional fiduciary where family dynamics are difficult.

Maintain contact with more than one person, since isolation is the enabling condition for most exploitation.

And discuss the arrangements openly with the whole family, which removes the secrecy that exploitation depends on.

The difficult judgement

Worth acknowledging.

Distinguishing exploitation from a legitimate arrangement is genuinely hard, particularly where one child provides substantial care and receives support in return.

The distinguishing features are generally transparency, documentation, proportionality and the older person's own understanding of what is happening.

Where all four are present, an arrangement is probably legitimate. Where they are absent, the concern is warranted.

General information only, not legal advice. If you suspect exploitation, contact adult protective services in your area or law enforcement. Consult a qualified elder law attorney.