Elder Financial Abuse
California’s elderly population will have doubled by 2025 to 6.4 million, a larger growth rate than any other state. With this growth comes a surge in elder financial abuse — defined as a theft, embezzlement, forgery, or fraud against a person aged 65 years or older. As many as 1 in 10 seniors report some form of elder abuse, and research suggests that the crime is widely under-reported.
Vulnerable Family Members at Risk
Most commonly, elder financial abusers take advantage of their trusted relationships with seniors for financial gain. Close to 60% of elder financial abuse is perpetrated by family members, followed by friends and neighbors and home health care aides.
These unscrupulous individuals exert undue influence to convince seniors to gain access to financial information and bank accounts. They may:
Influence the elder to convey real estate to the abuser
Trick the elder into signing a Durable Power of Attorney for Finances that appoints the abuser as the attorney-in-fact
Entice the elder to amend trust and estate documents that appoint the abuser as a trustee, executor, or beneficiary
Loot bank accounts via ATMs and checkbooks
Steal and later sell the elder’s personal property
Overcharge for caregiving or other personal services
However, a perpetrator needn’t enjoy a close position of trust in order to financially exploit elders. Predatory retail practices committed by mundane businesses ranging from automobile dealers to beauty salons can fall well within the statutory descriptions of elder financial abuse.
And elders are easy targets of a multitude of scams, cons, and other tricks: email and telephone scams, sweetheart cons, fraudulent contests and sweepstakes, dishonest home contractors … the list goes on.
Professional Fiduciary Misconduct
Professional fiduciaries are either court-appointed or hired privately to represent clients in financial matters. They can act as conservators, guardians, representative payees, trustees, or agents under a durable power of attorney, and as such must be licensed under California law after demonstrating that they satisfy various education, experience, and background verification requirements. They pledge to adhere to ethics rules and codes of conduct.
The heightened level of scrutiny associated with the licensing process is designed to ensure that professional fiduciaries are a trustworthy lot – but the sad reality is that occasionally, fiduciaries become predators and exploit the elders they’re charged to protect. Like other flavors of elder financial abuse, misconduct by a professional fiduciary can include theft from bank accounts, theft of personal possessions, inducing clients to sell assets to the fiduciary below their fair market values, and diverting monthly retirement or disability income.
The Devastating Impact on Victims
Elder financial abuse can be so devastating that the crime can actually shorten the life span of the victim. This shouldn’t be surprising when one considers that an elder who loses his or her savings often can no longer afford adequate medical care and drugs, suitable housing, and necessary personal items. For those who suffer from pre-existing serious physical or neurological ailments, the emotional turmoil triggered by this type of crime can, by itself, be severe enough to jeopardize the elder’s life.
In addition, most victims never recover financially because their fixed incomes are not sufficient for them to rebuild their savings. To put it bluntly, without restitution or other recovery, financial ruin caused by elder financial abuse often means a death sentence for victims.
We can help
Aho & Associates is uniquely qualified and experienced in conducting forensic accounting and fraud investigations for potential elder financial abuse. We understand the special challenges of investigating the financial exploitation of vulnerable elders and we possess the expertise to address the emotion and trauma that typically accompany this crime.
When elder financial abuse is suspected, we typically find that the problem is a result of care management issues, behavioral problems, and family turmoil. We take a holistic approach by working closely with care managers, attorneys, doctors and counselors, law enforcement, and financial advisers to uncover financial abuse and ensure the elder is protected from mistreatment and neglect.