Money IQ: Elder Financial Exploitation

Money IQ
Elder Financial Exploitation

It is that time of the year again: Thanksgiving has come and gone, we ate too much and now it is time to get ready for the holidays. Although it can be a stressful time of the year, it is meant to be a time to celebrate with your friends and family. Unfortunately, the darker side of humanity always lurks in the corners regardless of the time of year. This column addresses the issue of Elder Financial Exploitation.

As people age (hereinafter referred to as an “elder” or “elders”), many of them begin to rely on children, grandchildren, other family members and/or caregivers (hereinafter collectively the “helpers”) for assistance with everything from transportation needs to management of finances, including payment of bills, writing checks, reading mail and so on. Unfortunately, this reliance sometimes leads to the helpers helping themselves to money, or other property, belonging to the elder without the elder’s knowledge or consent. Although in some instances, even if the elder does offer a gift of money or property the helper should not accept it because the elder is incapacitated or otherwise vulnerable. There are always exceptions, but for the most part, such acts may be considered financial exploitation.

Direct reimbursement for an expense of the elder another party pays, or payment for actual services from the helper that are rendered, is acceptable. However, “paying” oneself, or taking something from an elder without consent, because the helper thinks he or she deserves it is not acceptable—in fact, it is theft.  If the elder has dementia or Alzheimer’s, or is otherwise mentally incapacitated, he or she may never know or understand the exploitation. On the flipside, there are elders who are aware of the exploitation, but they are afraid to do anything about it because of their fragile health and dependency on the helper. Either way, it is still financial exploitation and it is a form of elder abuse. 

For example, Son does not work but he does help out Mother in driving her to doctors’ appointments and to the grocery store. Son helps her pay her bills and assists with other activities, which Mother is finding harder to do on her own physically and mentally. Mother is still capacitated but she adds Son to her bank account as a signer just in case she becomes incapacitated or cannot otherwise sign a check, but the money in the bank is still hers. Mother has sufficient income to support herself without depending on her savings, but she is also financially supporting Son who is not otherwise employed. She supports son for several reasons. Yes, Son is her only surviving child, and yes, Son does help her, but her primary driver is fear: fear of being alone; fear of being helpless. This is not an uncommon arrangement, and certainly not illegal in and of itself, but what may happen beyond this type of arrangement is where the financial exploitation occurs. 

In this example, Son slowly takes control of Mother’s finances. He has the bank stop sending paper statements to Mother because he gets them electronically but Son does not show them to Mother. Then Son decides it is up to him (because he will inherit everything anyway—won’t he?) to protect Mother’s assets from the government, nosey neighbors and other people who have no business knowing how much money Mother has, including her bank.  Part of Son’s “financial planning” includes buying silver and gold bullion, collectible coins and keeping some cash—all accomplished with Mother’s money and without her knowledge and consent.  Son may claim he never intended to take the money and that of course it belongs to his Mother. It does not matter that Son may have “good intentions” because we will never know that. What we do know is that he committed elder financial exploitation against his own Mother. Whether or not Son’s actions are criminal depends on what happens next.  

So what can be done to stop or prevent elder financial exploitation? It is an unfortunate occurrence that is not new but more attention is being paid to it. Banks, in particular, are being told they have a duty to report instances of elder financial exploitation because bank employees often have regular contact with elder clients and changes in banking habits may indicate financial exploitation. Law enforcement is starting to pay more attention. Being a signer on an account is not necessarily a viable legal excuse anymore for taking money when it is not used for the benefit of the true owner of that money.

Everyone hopes they can trust a child or other family member to look out for their interests, but, as we all know, such is not always the case. With planning, a person needing a third party to help him or her does have other resources: a bank trust department, a trust company, senior centers and government senior services, in addition to other organizations. Sometimes just making sure a neutral third party has written authority to have eyes on your finances, even if you do want your child or other family member to have access to your money to help you, may be a viable option to ensure someone else is watching out for you.  

If you have any concerns, talk with your attorney or a trusted advisor for suggestions on how to protect yourself. 

Editor’s note: Dara L. McKinney is a Trust Officer at Los Alamos National Bank. She has worked at LANB since January 2009

  • Look for Money IQ columns published regularly in the Los Alamos Daily Post.