Advanced Planning May Reduce the Risk of Elder Exploitation

It is a scenario Florida elder law attorneys have seen too many times. A potential client comes to the office to discuss her mother’s situation. Mom has been suffering from dementia for almost a year, but it is rapidly getting worse. When the client went to pay some of her mother’s bills, she noticed that her account balances seemed far too low, given her Social Security checks, pension funds, and investments. Upon further inquiry, she discovered numerous transactions for groceries, bar tabs, online purchases, and even large transfers to an outside bank account. Unfortunately, these are all indicators that yet another older adult has been the victim of financial exploitation.

Some estimate that over $36 billion is lost to elder financial abuse every year in the United States. Sadly, loved ones often do not find out about the exploitation until it is too late. The scenario can become simple enough. One common example is the hired caregiver who lives with an older adult, often a widow or widower, and becomes a trusted companion. Over time, bank accounts include new payable on death designations, and accounts are opened in both the senior’s name and the caregiver’s. Perhaps the caregiver even retains an unscrupulous attorney to come visit the older adult and prepare powers of attorney and a new will.

Many people will undoubtedly read this and exclaim: That would never happen to me. I know better.

Many cases of exploitation are by family members and close friends

While no one wants to believe they could be victims of financial abuse, the numbers are powerful evidence that exploitation can happen to anyone. Even more troubling, somewhere between $6 and $12 billion each year is lost to abuses caused by family members – adult children and grandchildren being the most common culprits. Therefore, many times exploitation is not obvious, but rather insidious and very subtle. It may begin with a small amount of money being borrowed and not repaid. In time, it may escalate to one adult child isolating a senior from siblings to gain control over assets.

Exploitation is often discovered after the senior has lost mental capacity

Years may pass without the older adult even being aware of what is happening. Loved ones often find out about the exploitation when the senior becomes incapacitated, hospitalized, or begins suffering from diminished capacity due to Alzheimer’s disease or other forms of mental impairment. Upon attempting to take over responsibility for bills, medical care, and other necessities, the loved ones may begin to face real obstacles. For instance, they discover that the senior’s physician will not communicate with them, because someone else is listed as the power of attorney. Or the bank will not allow them access, because it is held jointly with someone else. Soon, they find that the accounts are drained, the mortgage is going unpaid, and medical expenses are mounting.

Getting back the money is usually impossible, because it has long since been spent. Even if the offender is caught, nothing can replace the damage done. Litigation is extremely costly and often just cannot recover enough to help. But there are steps one can take to avoid these nightmares.

Early planning is the solution

Plan early. Do not wait until you are facing long-term care or until you are no longer capable of legal decision-making. Family members should sit down and have the difficult conversations about final expenses, long-term care, and who should make decisions if the senior cannot. Powers of attorney should be drafted when a person is young and healthy and there is no question about mental competence. That way, when someone does attempt to change accounts, make unauthorized purchases, or access assets without authority, trusted loved ones will be armed with the necessary tools to take action swiftly.

There are many ways that powers of attorney and other planning documents can be crafted to offer comprehensive protections against exploitation. While no plan is completely foolproof, discussing your plans with an experienced elder law attorney earlier, rather than later, is your best defense. The Millhorn Elder Law Planning Group offers a wide range of planning and resources for seniors in The Villages and throughout Florida. Contact us today.