Financial abuse of the elderly is becoming more and more common. An expert tells us how to spot and prevent elder financial abuse so we can take precautions to protect our elderly loved ones and, perhaps later, ourselves.

by Andrea Norris-McKnight

No one wants to see their elderly parents suffer physical or financial abuse, but elder abuse is a significant problem. To help us understand and find ways to prevent and discover elderly financial abuse, we contacted Michael Hackard. Mr. Hackard has been in the legal field for over 40 years and heads Hackard Law, an estate, trust and probate law firm in Sacramento, CA.

Q: With so much elder financial abuse going unreported, how can you tell if your loved one is being abused but hasn’t told you about it?

Michael Hackard: An elder’s close friends and family members share a common desire to protect the elder from harm. Protection from and prevention of elder financial abuse starts with an understanding of the elder’s vulnerability to harm by the undue influence of others.

An elder’s vulnerability is not solely due to incapacity. Elders can be vulnerable because of illness, disability, injury, age, education, impaired mental abilities, emotional distress, isolation, dependency, alcoholism, or substance abuse.

Elders are generally abused by those with some type of apparent authority. These can include family members, fiduciaries, caretakers, friends, neighbors, or service providers.

Signs of abuse may be evident in credit card statements, bank statements, unpaid bills, frequent bank trips, ATM cash withdrawals, and service scams. While elders value their privacy, some degree of transparency with those close to them is helpful and sometimes necessary to prevent abuse. Such transparency should include sharing, if possible, with more than one family member or trusted other.

A family member solely handling an elder’s financial affairs without some transparency can create a situation ripe for abuse.

Other signs of abuse include an elder’s embarrassment and non-communication with family members. An abuser often threatens an elder with the necessity of secrecy. This is often coupled with a heavy-handed warning that if information is disclosed, the elder will lose their house, freedom, or person upon whom they’ve becoming totally dependent.

Q: If you suspect a family member of being an abuser, what’s the proper way to address the situation?

Michael Hackard: While there is no perfect way to address suspected abuse by one particular family member, there are a number of inquiries that can be made. Start with the elder. What does the elder say about what is happening? There will often be statements like “My son has all my money” or “My daughter had me sign a bunch of papers and I don’t know what they mean.” This is often an area of great frustration because there is usually no formal finding of elder incompetency, and the elder is presumed to have capacity without such a finding. The presumption of capacity, in some ways, limits the rights of others to challenge the wrongdoing of others against the elder. An elder with capacity is presumed to be capable of making their own financial decisions.

Agencies like Adult Protective Services (APS) can be called to do their own investigation of abuse. Such investigations may be cursory in nature, with a short phone call or visit with the elder. Many elder financial abuse cases include a long history of APS calls with little or no intervention.

Interested family members confronting abuse should meet separately with the elder and the abuser. Since the elder has often become reliant on the abuser, successful intervention may be very difficult. Some success can occur if the elder revokes a current power of attorney granted to the wrongdoer and grants a new durable power of attorney over the elder’s affairs to a responsible family member. (A durable power of attorney is one that does not end when the elder becomes incompetent.)

Elders, when competent, are presumed to be able to challenge elder financial abuse civilly. This is often an empty right because the nature of the abuse includes intimidation and fear. Others who may challenge the abuse include agents under an elder’s power of attorney, a guardian-ad-litem, sometimes a trustee, and a conservator or guardian if one has been appointed.

Q: What can be done to protect elderly parents who are losing their cognitive abilities?

Michael Hackard: A trusted family member may accompany an elder to doctor’s appointments. That said, family physicians may lack the particular training or understanding of cognitive decline that physicians specializing in behavioral health or neuropsychiatric issues regularly address. Those caring for and protecting elderly parents may benefit from having their parents have specific cognitive testing to determine the degree of impairment.

Family physicians will often note in medical records that the patient is “alert and oriented to person, place, and time.” Such notes often lack the support of specific cognitive testing. A person can lose a great deal of cognitive capacity and still retain basic orientation to person, place, and time and remain superficially neurologically intact. Neuropsychiatric experts indicate that these basic orientation parameters are not reliable indicators of executive functioning, which refers to higher-level mental functions that are required to make complex decisions (i.e., major financial decisions), conceptualize situations abstractly, plan future events effectively, and detect the intentions of others. These executive functions are usually the first to be impaired by conditions that negatively impact cognition, and impairment in executive functioning often goes undetected by healthcare providers who do not specifically test for it.

Assuming that the elder parent is competent, it is important that the elder have a durable power of attorney that identifies an agent who can act on the elder’s behalf when the elder is not competent or not present. Successor trustees may also be appointed to manage an elder’s assets that are in trusts.

Q: Caregivers are in a unique position to notice abuse or be abusers themselves. How can you ensure your loved one’s caregivers have their best interests in mind?

Michael Hackard: Continuing family vigilance and transparency are the best defenses against caretaker abuse. It is very difficult to ascertain whether the caregivers have the best interests of the elder in mind. Regular visits by family members that include private and uninterrupted time away from the caregiver are important and can provide some safeguards against an abuser.

Q: What financial statements most likely show evidence of undiscovered financial abuse?

Michael Hackard: ATMs are a common method of abuse. If an elder’s grocery bill is normally $75 per week and it substantially increases when a caregiver arrives, there may be elder financial abuse. Cash withdrawals at grocery stores may be another marker of abuse. Grocery purchases by a caregiver coupled with a cash withdrawal are commonly seen.

Checking and savings accounts that have unexplained withdrawals may show evidence of abuse. Income sources can often be diverted (social security, interest, pensions, and annuities) to other accounts, and the reduction of monthly deposits will be evident.

Q: What legal remedies are available if your elderly loved one has been financially abused?

Michael Hackard: Remedies vary depending on whether the elder is living or deceased. A living elder with competence may bring a state-defined elder financial abuse action against a wrongdoer and those who assisted the wrongdoer. If the elder chooses, such an action may also be brought by an agent vested with the elder’s power of attorney, a guardian-ad-litem appointed solely for the litigation or a guardian or conservator if such a fiduciary is appointed. Remedies may include damages for losses, attorney’s fees, and reversals or rescissions of real and personal property transfers.

A personal representative of the estate or trust may bring available remedies on behalf of a decedent’s estate or trust. Family members or “interested persons” may also qualify as plaintiffs. Remedies, again, are damages for losses, attorney’s fees, and reversals or rescissions of real and personal property transfers. Some states include disinheritance remedies, so the wrongdoer is also prohibited from receiving anything from the elder’s estate or trust.

• How an Elder Law Attorney Can Help Elders and Caregivers
• Helping Elderly Parents Organize Must-Have Financial Paperwork
• How To Find an Elder Law Attorney You Can Trust
• Protecting Elderly Parents From Scams

Reviewed November 2024