According to a report jointly sponsored by the National Committee for the Prevention of Elder Abuse, Virginia Tech University, and MetLife, there is a collective loss of $2.9 billion dollars each year among victims of financial elder abuse. This number is growing rapidly and the act of financial elder abuse is expected to be largely underreported. In reality, $2.9 billion may actually represent a fraction of the value that is being lost by our seniors each year.
Financial elder abuse consists of many different actions, including internet and telephone scams, insurance fraud, physical theft, and coerced, pressured, or deceptive transactions. Minn. Stat. § 609.2335 sets forth that any breach of fiduciary duty, use of property for something other than the benefit of the vulnerable adult, failure to use property for the benefit of the vulnerable adult, or depriving a vulnerable adult of financial resources is considered financial exploitation.
The report also explains that even though all senior demographics have been targeted, senior women are twice as likely to encounter the abuse as men. Victims, regardless of gender, often share an element of vulnerability created by regular isolation, cognitive challenges, and some level of need for assistance with tasks pertaining to home maintenance, health care, and finances. These vulnerabilities present an opportunity for the abuser.
Though many actions of financial elder abuse are undertaken by strangers, a large class of these crimes occurs among family members. Statistics vary by region, but various reports state that seventy-five to ninety percent of financial elder abuse is undertaken by family members, close friends, and caregivers. The role these individuals play in the life of the senior often make the abuse far more difficult to discern.
Red flags that someone who suspects financial abuse can look for include:
- Unpaid bills
- Changes in legal documents (Power of Attorney)
- Changes in spending patterns
- Changes in attorney or financial planners
- Changes in bank accounts
- Missing property
- Transfers of large sums of money
- A fear, anxiety, or unwillingness to discuss finances
- Excessive involvement in the senior’s finances by a singular party
Financial elder abuse is reaching epidemic levels just in time for the Baby Boomer generation to reach retirement age. In order to protect yourselves and the seniors in your life, please consider reviewing your existing financial/estate planning strategies. Be sure to create a clearly defined plan, and then have conversations so that all family members know about and understand your intentions. The most important thing a senior can do is to PLAN and properly PREPARE for their future dependence with a trusted community of advisors.
IF YOU EXPECT ELDER ABUSE OF ANY KIND, please contact Minnesota’s Adult Abuse Reporting Center at 1-844-880-1574. For more information, visit the National Center on Elder Abuse website at https://ncea.acl.gov/.