There are few things more heartbreaking than watching an elderly family member being taken advantage of by those who are close to them, personally and professionally. Unfortunately, elder abuse is a common occurrence, especially in the form of financial exploitation.
While there are other types of elder abuse, 62.5% of abuse is financial in nature.
With many baby-boomers heading into retirement, or already enjoying it, this has led to a growing concern for the risks that financial exploitation poses.
While statistics for Canada are scarce, a survey in Victoria and the lower mainland concluded that 41% of individuals over the age of 65 have experienced financial abuse at least once in their senior lives. However, only 6.4% reported being victimized by financial abuse, demonstrating that the nature of financial abuse, and what qualifies as an act of financial abuse, is not largely not understood.
What is senior financial abuse?
When someone uses the money, property, or personal information of a person over the age of 65, without authorization and in a way that is self-benefiting, they are perpetrating senior financial abuse, which in many cases is a crime.
Sometimes this abuse is the act of a stranger, through identity theft, or a business partner. Most often, however, financial exploitations are committed by those closest to the individual being taken advantage of, with 55% of financial abuse being committed by family, friends, neighbours, and caregivers.
Forms of Financial Abuse
There are many ways in which financial exploitation of seniors can exist. While some may be very apparent, others are less so. Below are 10 ways in which a senior, and their finances, can be taken advantage of:
- Theft
It is not uncommon for someone close to a senior to steal their possessions for financial gain. Common types of property theft include taking valuable items or family heirlooms from the senior’s home, or stealing pension cheques.
Also, with so many seniors sharing debit/credit card information or providing cash to others so that they can run errands and pay bills, it is not uncommon for individuals to remove money from a senior’s accounts without permission, purchase goods or services for themselves, or pocket cash.
- Misusing a Power of Attorney
Your Power of Attorney (POA) gives someone, of your choosing, the right to act on your behalf, with regard to financial and legal matters. If the Power of Attorney is an Enduring Power of Attorney, their right will continue, even if you lose capacity.
It is your Attorney’s responsibility to manage your affairs in a way that benefits you and your quality of life, however, this does not always happen. When your Attorney makes a decision that is not in your best interest, they are misusing their power. This may include taking money without permission or forging your name on a Power of Attorney.
- Sharing Their Home
Another common type of senior abuse occurs when someone moves in with an elderly person, under the notion of providing care, without paying a fair share of the expenses. This then adds significant living costs to the senior, taking advantage of their finances.
- Early Inheritance
Another means of separating a senior from their financial assets is unduly pressuring them into bequeathing a gift or an early inheritance.
- Withholding Care
In some cases, someone who oversees managing a senior’s diet, prescriptions, travel and/or other supports, may commit senior abuse by withholding these supports until they have received some form of payment.
- Manipulating Documents
As we get older, there are many documents, such as a Will, Power of Attorney, and title deeds that become very important, ensuring a continued quality of life for the owner. Unfortunately, there are individuals who will attempt to manipulate these documents. Attempts to do so include forging signatures of cheques and documents, altering documents to gain access to assets, and pressuring someone who lacks capacity to sign a document they do not understand.
- Non-Repayment of Loans
Often, those with affluence are willing to provide personal loans to those close to them, especially when there is a high level of trust. Unfortunately, some recipients will count on the frailness and forgetfulness of the senior to avoid having to pay back the loan. According to the previously mentioned study conducted in Victoria, 18.7% of seniors had someone refuse to repay a loan or had someone borrow money without permission.
- Predatory Marriage
When someone marries another person in hopes of accessing their assets, the marriage can be seen as being predacious. Trusts are an excellent tool for protecting assets during a marriage late in life.
- Pressuring the Senior
It is not uncommon for a financial exploiter to pressure a senior into selling property, withdrawing investments, or buying alcohol or drugs, for personal gain.
- Scams
There are several scams that are specifically targeted at exploiting seniors for financial gain. Common scams include lottery scams that require the senior to pay a fee to collect their winnings, and fake accidents, in which the perpetrator convinces the victim that a family member needs money to pay for bail or a hospital bill. Work scams, where someone offers to complete work for a reasonable fee then after starting, requests more money, are also common.
The best way to protect your assets against financial exploitation, and ensure that your wealth is spent and bequeathed the way that you see fit, is to properly align your estate with your objectives and family dynamics.
To find out more about protecting yourself from financial abuse, or to create your complimentary estate plan, contact us today.
