Older Adult Financial Abuse and Exploitation

According to the U.S. Department of Justice, financial exploitation of older adults is one of the most reported forms of elder abuse.

The National Council on Aging (NCOA) estimates that such abuse costs older adults around $2.6 billion to $36.5 billion annually. This problem is expected to increase in the coming years as the older population grows.

By 2030, people 65 years of age and older will constitute 21% of the total U.S. population. Senior citizens aged 85 and older rank as one of the fastest-growing populations in the country, growing from 4 million in 2000 to 21 million by 2050.

What Is Older Adult Financial Abuse?

The federal Elder Justice Act, enacted in 2010, defines the financial exploitation of elderly people 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."

Older dependent adults are particularly vulnerable to financial exploitation and appropriation due to:

• Memory impairment and decision-making issues that come with age
• Increased dependence on caregivers and family members in positions of trust
• Tendency to have more financial and real estate assets

This is especially the case where an older individual suffers from dementia or some other mental incapacity that weakens their ability to make sound financial decisions.

Who Engages in Elder Financial Abuse?

Older adult financial abuse can take many forms, including:

• Scams by telemarketers or other con artists
• Forgery
• Identity theft
• Use of undue influence to pressure an older adult to transfer their assets
• Breach of a fiduciary relationship
• Use of power of attorney or conservator appointment that leads to the misappropriation of an older adult's financial assets
• Unauthorized use of an older adult's Social Security

Most elder financial exploitation occurs in domestic settings instead of long-term care facilities or nursing homes. It is normally caused by family members, which is called "elder family financial exploitation" (EFFE).

Common signs of elder financial abuse include:

• Diminished health or mental capacity of the older person
• A growing interest in the individual's assets, including their financial accounts and real property
• Unusual bank account or credit card activity
• A blocked transaction by the older adult's financial institution that the elder has difficulty explaining
• A new and unexpected “best friend"
• History of substance abuse, gambling, or financial problems in the family
• Disputes regarding future inheritance
• Efforts to make the victim amend their estate planning documents, including any powers of attorney, wills, or trusts

Note: If you or your loved one doesn't have estate planning documents already, you can create DIY documents for power of attorney, living wills, or living trusts. You can also DIY your last will and testament. If your loved one has already created or amended these documents and you suspect financial abuse, you should consult an attorney to understand your options.

Federal 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 older adult abuse cases and abuse laws. It also expands reporting requirements for health care and financial services providers.

In addition, although it has yet to become federal law, the Elder Abuse Victims Act (EAVA) would provide greater federal support for investigating and prosecuting older adult abuse cases.

State Laws Protecting Against Elder Financial Abuse

Most laws protecting against older adult financial abuse exist at the state level. For example, California law prohibits anyone from taking or assisting in taking the real or personal property of seniors for wrongful purposes or with the intent to defraud.

California law also provides for treble damages, or the tripling of a damage award, in some instances of elder financial abuse. Other states have similar statutes protecting against older person's financial abuse.

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 Older Adult Financial Abuse

Contact your local Adult Protective Services (APS) agency or long-term care ombudsman if you suspect that older adult financial abuse or exploitation has occurred. The Elder Justice Initiative of the U.S. Department of Justice also contains support resources by state. It can be helpful to have an elder law attorney on your side to help the process go smoothly.

In addition, if the victim has an attorney, particularly an estate planning attorney, that attorney should be advised of any suspected financial abuse. This is especially true when an individual is being pressured to revise their estate planning documents.

For additional general information on older adult abuse, see FindLaw's Elder Abuse Overview.