As parents age and their physical and mental capacities diminish, it is natural for their adult children recognizing the parents’ decreasing ability to care for themselves, to step in and help them. Often, a specific child will take over most responsibilities, such as taking the parent to doctor’s appointments or the attorney’s office.
As the parent increasingly begins to depend on the child, it may make sense to appoint the child as a trusted decision maker and give them a larger inheritance to compensate them for their time. At the same time, other family members must take extreme care to ensure that a manipulative caretaker does not financially exploit the elderly parent. As an Austin Estate Planning Attorney, I can help you create a plan that decreases the chances of financial exploitation.
With more people living into their eighties and nineties, elder abuse is a serious and increasingly common problem in our society. Elder abuse can take several forms, such as physical, sexual, emotional, and verbal abuse or caretaker neglect or exploitation. One-half of all elder abuse in the United States is financial exploitation (this article’s focus). Financial exploitation includes outright theft of money or property, illegal property transfers, identity theft, and misusing a position of trust, such as through a power of attorney.
Research has shown that the following characteristics indicate that an older adult is more likely to be financially exploited through undue influence.
Often, people who use undue influence to exploit an older adult financially do not begin helping them with the intent of using the older adult’s trust to manipulate or control them. Nevertheless, as time goes on, whether because of resentment or entitlement, or another reason, the helper begins to feel justified in helping themselves to the older adult’s money and property.
Although it is most often a family member who financially exploits the older person through undue influence, financial exploitation can also occur at the hands of any person whom the more senior person trusts, such as a neighbor, a fellow member of a religious organization, a housekeeper, or a professional adviser.
Below are some warning signs that a dutiful caretaker has crossed the line into elder abuse:
Although the estimated annual cost of elder financial abuse is billions of dollars, it regularly goes unreported because the abuser is often a family member or trusted caregiver. Also, the older person may not report it because they are either unaware of the abuse or too embarrassed or afraid to say it. Yet by being aware of the warning signs and helping to create a community network around the older person, as well as taking careful and appropriate steps to plan for their decreasing ability to manage their finances, such as setting up automatic bill pay or creating a power of attorney or trust, you can significantly reduce the risks. We can help you take the steps necessary to protect yourself as you age or to protect your vulnerable loved ones. Contact us so we can discuss the appropriate steps to take.
 Bennett Blum, M.D., Elder Financial Abuse and Financial Exploitation, Forensic and Geriatric Psychology, http://www.bennettblummd.com/elder_abuse_financial.html.
 Michael J. Tueth, M.D., Exposing Financial Exploitation of Impaired Elderly Persons, 8 Am. J. Geriatric Psychiatry 104 (2000), https://www.ajgponline.org/article/S1064-7481(12)61467-5/fulltext.
 Martin Hagan, Financial Exploitation of the Elderly through Undue Influence: How to Spot It and What to Do about It, Martin Hagan’s Estate Planning Resource Center, https://haganlaw.net/?page_id=95.
 Marguerita Cheng, Elder Financial Exploitation: Warning Signs, Prevention and Reporting, U.S.News and World Report (May 27, 2021, 2:09 PM), https://money.usnews.com/money/blogs/the-smarter-mutual-fund-investor/articles/elder-financial-exploitation-warning-signs-prevention-and-reporting.
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