What Is Financial Abuse and How to Identify It?
At disinherited.com we frequently encounter estates depleted by financial abuse. Elders are by no means the only victims of this abuse. Less commonly we see the financial abuse of children or disabled adults who are the beneficiaries of trust funds, usually by a trustee in a conflict of interest.
With our aging population however, the potential for elder financial abuse is increasing greatly. This should be no surprise given that the elderly, often savers rather than spenders, apparently control over 70% of the nation’s wealth.
Canadians are becoming increasingly aware of the financial abuse of elders. It seems many of us know first or second hand of cases where someone has improperly benefited from the estate of an elderly person.
Many seniors do not realize their wealth, especially long term home owners whose homes have greatly appreciated in value. Too often they do not recognize their own vulnerability to financial abuse.
Elderly persons with disabilities are especially vulnerable if living alone and in need of care. A would be abuser, masquerading as a caregiver, can easily gain access to their home, their person and their financial assets. They may well have all the freedom of a “fox in a henhouse” to rearrange the victim’s affairs for their own benefit.
The Perpetrators of Financial Abuse
The perpetrators of financial abuse largely fall into three general categories:
∙ Predators looking to financially benefit from an elder (eg. Escorts “specializing in seniors”);
∙ Unscrupulous business professionals looking to sell unnecessary services to an elder. (Does Uncle Harry really want or need that marble mausoleum all for himself?);
∙ Family members with a huge sense of entitlement. (The majority of abusers).
Abusers seem to have a sixth sense at picking out vulnerable victims and there are indeed predators who deliberately seek out vulnerable seniors with the intent of exploiting them. Like paedophiles who profess their love of children, such predators will profess love for the elderly and seek employment as personal care attendants to gain household access. (For a good example see Mikita v Lick at www.disinherited.com ). Especially vulnerable to these predators are recent widowers, lost without their spouse, who are sitting ducks when a little sex is thrown in.
Family members however, appear to make up the largest group of financial abusers. Whether children, grandchildren or spouses, these folks often have a huge sense of entitlement . They often feel justified in taking what they believe is, or should be, rightfully theirs. Particularly if they have addiction or financial problems , they will rationalize their actions. Left unsupervised, they may well deplete the deceased’s estate before death. Once the horse is out of the barn, there is often little that can be done to recoup these losses.
The financial abuse of elders is seemingly an ideal crime – there can be a huge potential for gain and little downside. There is little, if any, chance of successful prosecution so this is a relatively risk free crime.
Achieving Control of the Elder’s Affairs
In terms of achieving a position of influence over the elder’s assets, it is crucial to gain the elder’s trust. With one foot in the door, it is truly amazing how quickly a predator can become the elder’s new best friend and trusted adviser – to the exclusion of long term family and friends.
Isolating the victim is key to gaining control of their financial affairs. An abuser who becomes the victim’s window on the outside world, has great influence over the victim’s affairs. Long term family or friends will be restricted or denied contact with the elder. Meanwhile the abuser will tell the elder that no one cares or they would have been in touch.
A successful abuser will soon succeed in alienating the elder’s support network. This will involve the increasing separation of the elder from family, friends and professionals and the introduction of new friends by the abuser. The abuser typically invents seemingly rational pretexts to justify these changes.
This isolation or control of access to the victim is most often telltale of abuse. Family or friends should be very suspicious if this occurs.
Not unlike other victims of crime who develop Stockholm Syndrome, an elderly person dependent on the abuser will begin to identify and sympathize with the abuser, seeing the world from their perspective. They will perceive as “bad guys” those who try to curtail the power of the abuser.
Victims will often react strongly against intervention attempts by concerned relatives or friends. Often with the urging of the trusted abuser, their new best friend, they perceive the third party as wrongly interfering in their affairs.
Who is most at risk?
Seniors who are socially and physically isolated are the most vulnerable to abuse. By the very nature of their disability, those in need of care are more likely to be isolated physically, socially and emotionally.
Even aside from any issues with dementia, seniors suffer from significant depression and loneliness, especially once widowed. With loved ones often living far away, they are easy prey for any unscrupulous individual who pays attention to them. They are vulnerable to exploitation by phone canvassers, door to door salesmen or ne’er do well children who are suddenly willing to move back home to take care of them.
Many parents are unfortunately naive about their children. For example, a common scenario is the transfer of a major asset into joint tenancy with one of several children. Presumably the parent believes they are effecting the transfer to avoid probate fees and that this one child will share the asset with his or her siblings. Unfortunately this posthumous sharing rarely takes place.
No one ever admits to conducting financial abuse. When an abuser is confronted with the abuse, the typical response is to obfuscate and indignantly and vociferously maintain their unselfish altruism.
Financial abuse of the elderly is an unfortunate fact of life. Such abuse offers the possibility of easy money with little downside to the perpetrator– minimal civil risk and almost no criminal risk. Given that close family members are often responsible, public officials may be reluctant to get involved.