I have written before about our aging population and the effect that it will have on estate, trust, probate and inheritance litigation in the decades to come. This stems from a number of demographic trends including (1) massive numbers of Baby Boomers entering retirement age and (2) medical advances allowing people to live longer than ever before (but often with decreased physical and mental abilities).
An increasing number of older and incapacitated people will naturally result in an increasing number of elderly adults who are susceptible to, and actually subjected to, abuse and exploitation. This elder abuse can take a number of different forms, including physical, emotional, sexual and financial. While all of these are bad, my focus for purposes of this blog post is on financial elder exploitation.
There are agencies and organizations which play an educational and preventive role when it comes to elder abuse, but while doing good work they are often overworked, understaffed and underfunded. For example, Arkansas Adult Protective Services---a division of the Arkansas Department of Human Services---has a hotline number and is charged with the responsibility of investigating and intervening where there are reports of abuse, neglect, and exploitation of adults who are physically or mentally impaired and unable to protect themselves from harm.
According to the National Committee for the Prevention of Elder Abuse,
"Elder financial abuse spans a broad spectrum of conduct, including:
Taking money or property
Forging an older person's signature
Getting an older person to sign a deed, will, or power of attorney through deception, coercion, or undue influence
Using the older person's property or possessions without permission
Promising lifelong care in exchange for money or property and not following through on the promise
Confidence crimes ("cons") are the use of deception to gain victims' confidence
Scams are fraudulent or deceptive acts
Fraud is the use of deception, trickery, false pretence, or dishonest acts or statements for financial gain
Telemarketing scams. Perpetrators call victims and use deception, scare tactics, or exaggerated claims to get them to send money. They may also make charges against victims' credit cards without authorization
Who are the perpetrators?
Family members, including sons, daughters, grandchildren, or spouses. They may:
Have substance abuse, gambling, or financial problems
Stand to inherit and feel justified in taking what they believe is "almost" or "rightfully" theirs
Fear that their older family member will get sick and use up their savings, depriving the abuser of an inheritance
Have had a negative relationship with the older person and feel a sense of "entitlement"
Have negative feelings toward siblings or other family members whom they want to prevent from acquiring or inheriting the older person's assets
Predatory individuals who seek out vulnerable seniors with the intent of exploiting them. They may:
Profess to love the older person ("sweetheart scams")
Seek employment as personal care attendants, counselors, etc. to gain access
Identify vulnerable persons by driving through neighborhoods (to find persons who are alone and isolated) or contact recently widowed persons they find through newspaper death announcements
Move from community to community to avoid being apprehended (transient criminals)
Unscrupulous professionals or businesspersons, or persons posing as such. They may:
Overcharge for services or products
Use deceptive or unfair business practices
Use their positions of trust or respect to gain compliance
Who is at risk?
The following conditions or factors increase an older person's risk of being victimized:
Isolation
Loneliness
Recent losses
Physical or mental disabilities
Lack of familiarity with financial matters
Have family members who are unemployed and/or have substance abusers problems
Why are the elderly attractive targets?
Persons over the age of 50 control over 70% of the nation's wealth
Many seniors do not realize the value of their assets (particularly homes that have appreciated markedly)
The elderly are likely to have disabilities that make them dependent on others for help. These "helpers" may have access to homes and assets, and may exercise significant influence over the older person
They may have predictable patterns (e.g. because older people are likely to receive monthly checks, abusers can predict when an older people will have money on hand or need to go to the bank)
Severely impaired individuals are also less likely to take action against their abusers as a result of illness or embarrassment
Abusers may assume that frail victims will not survive long enough to follow through on legal interventions, or that they will not make convincing witnesses
Some older people are unsophisticated about financial matters
Advances in technology have made managing finances more complicated
What are the indicators?
Indicators are signs or clues that abuse has occurred. Some of the indicators listed below can be explained by other causes or factors and no single indicator can be taken as conclusive proof. Rather, one should look for patterns or clusters of indicators that suggest a problem.
Unpaid bills, eviction notices, or notices to discontinue utilities
Withdrawals from bank accounts or transfers between accounts that the older person cannot explain
Bank statements and canceled checks no longer come to the elder's home
New "best friends"
Legal documents, such as powers of attorney, which the older person didn't understand at the time he or she signed them
Unusual activity in the older person's bank accounts including large, unexplained withdrawals, frequent transfers between accounts, or ATM withdrawals
The care of the elder is not commensurate with the size of his/her estate
A caregiver expresses excessive interest in the amount of money being spent on the older person
Belongings or property are missing
Suspicious signatures on checks or other documents
Absence of documentation about financial arrangements
Implausible explanations given about the elderly person's finances by the elder or the caregiver
The elder is unaware of or does not understand financial arrangements that have been made for him or her."
In Arkansas, if the elder abuse is bad enough it can actually constitute a criminal offense and be prosecuted. For example, Ark. Code Ann. Sec. 5-28-103 prohibits the abuse or exploitation of an endangered or impaired person, and Ark. Code Ann. Sec. 5-28-101 defines certain terms in the statute which encompass many types of wrongdoing, including financial abuse and exploitation. Depending upon the amount of money or property misappropriated, the crime can constitute (1) a misdemeanor warranting a substantial fine or (2) a felony punishable by substantial prison time.
However, it seems that prosecutors are often so overwhelmed with "street crimes" involving drugs, violence, sex, theft, etc. that "white collar" crimes involving financial exploitation (which often can be more difficult to prove) are frequently not pursued as a practical matter. Accordingly, the person aggrieved---or commonly someone acting for or on their behalf (because the elderly person may be incapacitated, or unable or unwilling to take action)---may necessarily be forced to resort to a civil court rather than a criminal court. While such legal action will not result in the wrongdoer being criminally punished, depending upon the facts, circumstances and evidence they may be assessed with compensatory or potentially even punitive damages, along with attorney's fees, costs, and interest on the amounts misappropriated.
Matt House can be contacted by telephone at 501-372-6555, by e-mail at mhouse@jamesandhouse.com, by facsimile at 501-372-6333, or by regular mail at James, House & Downing, P.A., Post Office Box 3585, Little Rock, Arkansas 72203.
