October 7, 2010

Preventing Financial Exploitation

In the current economic climate, there seem to be more and more predators on the elderly. Unfortunately, many of those predators are those we tend to trust the most – family members, caregivers and people who are there to help.

Financial exploitation is, generally defined, taking advantage of someone who is a “vulnerable adult” by someone who is “in a position of trust and confidence.” These terms, despite having specific legal meanings, are applied in a common sense fashion. That is, a “vulnerable adult” is one who is unable to manage their own affairs without some help. A person in a “position of trust and confidence” is someone like an agent under a power of attorney, a joint account owner, or simply just someone who has inserted himself into the vulnerable adult’s life.

Quite often, the financial exploitation begins in a fairly innocuous fashion. For example, a daughter asks her elderly father for a loan to cover short-term expenses for a month while daughter looks for work. Many, if not most, parents would not have any problem with the request. The problem begins when daughter makes that same request every month for a year and never takes any steps to secure employment. Daughter then suggests to her father that she move in and take care of him and suggests that it would be much easier to care for him if she were a co-signor on the banks and brokerage accounts. The situation then can spiral out of control, with daughter using dad’s money to purchase things dad “needs” – a new car, new electronics, a bigger house – all conveniently owned in daughter’s name. What quite often begins as genuine concern for dad’s well-being transitions into daughter’s belief that she is “entitled” to dad’s money.

Not every situation where an elderly person is helping someone amounts to financial exploitation. So, how does one recognize financial exploitation?

Is mom-dad-neighbor showing signs of needing help? The first indication that a problem may arise is when the elderly individual starts to need help with getting around or with his or her finances.

Is someone new living in the elderly person’s home with them? Access is everything for financial exploitation to occur. A live-in caretaker, whether that person is hired or a family member, has nearly unlimited access to the elderly individual.

Is the caretaker showing up with new items? There seems to be a recurring theme that the exploiter buys a new vehicle, claiming that they “need” it to take dad to the doctor.

Is the elderly individual unaware of the problem? When asked, does the elderly person claim that the exploiter “needs the help”? If so, that is a good sign that exploitation is occurring.

If you see a family member or friend being exploited, there is help available. If it is your parent and you fear he is being exploited, talk to him about it. Request to look at the bank account statements. If there are other family members, contact them. They may not be aware of the situation at all. You can also call Adult Protective Services and request that they look into the problem. Finally, you can talk to a lawyer who understands these matters.

Mark E. House is a partner in the firm Becker & House, PLLC and focuses his practice on trust and estate litigation matters, including financial exploitation and can be reached at 480/240-4020.