How To Identify, Prevent, and Fight Elder Financial Abuse

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Editor's Note: This story originally appeared on The Penny Hoarder.

Elder financial abuse happens when someone takes advantage of a senior for their money. It can happen if you’re planning to pass down an estate of millions, or if the only money you have is your monthly Social Security check.

While financial abuse can look like a scam or someone attempting to alter your will, it can also be a nursing home or other medical institution inappropriately increasing your payments.

It can be your caretaker doling you an “allowance” from your own bank account, refusing to allow you to access the rest of the funds.

It could even be a family member who is constantly “borrowing” money with no intention of paying you back.

There are ways to insulate yourself against elder financial abuse, and a few action steps you can take if you ever find yourself the victim.

Here’s how to be proactive in protecting your finances as you age.

Learn Who Typically Inflicts Elder Financial Abuse

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Financial abuse is typically committed by the people closest to the victim.

With elder financial abuse, it can be and often is the people you have emotional attachments with — like friends and family — but it can also be the people or institutions who are providing your care.

Financial abuse is tricky, as the initial warning signs aren’t always associated with your bank account.

You’ll want to look out for relationships that are controlling or possessive, people who lovebomb you (even if the relationship isn’t romantic), and those who oscillate between the two.

Unfortunately, people are particularly apt to prey on the elderly because in a dark way, they’re looking at your estate. They either want to liquidate it or inherit it with their own interests in mind.

Because con artists prey on the elderly, it’s not just established relationships you’ll want to watch – you’ll also want to be wary of new people that come into your life and want to get too close too quickly.

Protect Yourself From Guardianship

Daughter looking at computer over the shoulder of her elderly mother.
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Nichelle Nichols. Britney Spears. Michael Oher. These are all people who have been victims of guardianships — or conservatorships, depending on the state. Unfortunately, even in the world of non-celebrities, these examples are the rule rather than exceptions.

“Guardianship takes your rights away,” said Tony Brooks, activist and advocate at Disabled in Action of Pennsylvania.

“Because of your disability, your voice has been given to someone else. Your decisions, your liberty is taken. The guardian could decide on where you live, how you live, or even what you do daily.”

Some people will attempt to put you under guardianship simply because it’s easier to do to an older person. The courts have implicit biases that would lead them to believe you’re less capable, as erroneous as those biases may be.

Because anyone can pursue guardianship at any time in an attempt to commandeer your finances, it might not be a bad idea to have a lawyer’s phone number at the ready.

If you go into the process unprepared and the conservatorship or guardianship is awarded, you’ll likely never get out of it — even with legal representation.

Discuss the Pitfalls of Guardianship With Your Family Members Now

Middle-aged woman taking care of her older mother

Some family members may want to put you under guardianship with genuinely good intentions. This is typically due to a lack of education on the topic.

Here are some potential outcomes your well-meaning family members may not be aware of yet:

  • Establishing guardianship doesn’t mean it can’t be contested. If there’s a shadow of a chance that there’s a sibling or even a distant family member who has nefarious intentions, guardianships often open up a window for them to swoop in. They may try to take away guardianship from the well-meaning family member, and they may be successful.
  • If the guardianship is contested, it’s not uncommon for the courts to remove family members or friends altogether. Then you’d get a court-appointed guardian who might meet with you once per year, if that. They don’t know you, but they’d be making all the decisions about every aspect of your life — or neglecting to make those decisions at all, leaving you in perpetual limbo.
  • Guardianship is often used as a state-sanctioned tool for financial abuse, so it actually makes it harder for you to escape an abusive situation. If your family member really wants to protect you, the best way to insulate you from this type of abuse is to give you more freedom to make your own choices — not less.

Alternatives to Guardianship

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There may be practical reasons you want to give someone else the ability to execute some things on your behalf.

Maybe you have an immunodeficiency and don’t yet feel comfortable in indoor public spaces, but you still need to complete in-person financial transactions inside a bank.

Maybe you’re in the early stages of Alzheimer’s, and you’ve already discussed with someone you trust how you’d like them to arrange your care.

In these cases, some disability advocates might recommend supported decision making, which is essentially a series of power of attorneys that gives someone the ability to sign documents and make certain, limited decisions on your behalf.

Unlike a guardianship, a power of attorney can be revoked at any time. So if you’re unhappy with how someone is acting on your behalf, you retain the ability to take that power away from them.

What To Know About Supported Decision-Making

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A power of attorney can be extremely limited in scope. You can get things like a medical power of attorney or a financial power of attorney.

But it can get even more granular than that. It could be for a one-time decision or signature, or it could be specific to only one aspect of your care.

Regardless of how narrow you want the power of attorney to be, this is something you should absolutely draft with your own attorney — not someone who has ever represented the other party.

You also don’t want to search for free templates online. If you pursue this document, it’s too important to not get it right.

For Brooks, even supported decision-making goes too far.

“It’s not great,” he said. “Because still, the other individual has the power to make decisions about your financial needs.”

Familiarize Yourself With Current Financial Scams

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Scams are another type of financial abuse you’re likely to come up against. It’s not all just people calling you up for donations to a fake charity like in HBO’s “Telemarketers,” either. (Though that does happen with frequency.)

Currently, the most prolific scams are romance scams, and seniors are particularly vulnerable.

If you’re doing online dating, make sure to be wary of people who live far away, try to get too emotionally close to you too quickly, or ask you to send them money or a gift card for any reason — no matter how sad a story they may tell, or how quickly they “promise” they’ll pay you back.

Odds are, they’re not a real person, and they’re exploiting what they see to be a vulnerable or lonely state due to your age.

They’re repurposing the old Nigerian prince scam into new, emotionally manipulative packaging to match the times.

Build a Strong Social Network

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A lot of times as we age, our social networks get smaller. If this happens to you, know that it’s not your fault. Our society is structured to isolate our elders.

It happens so naturally that it’s something you have to actively combat, or rebuild again after your social network experiences a period of contraction. You can get started by exploring free and cheap activities for seniors.

A strong social network can help insulate you against financial abuse.

When you have people you regularly interact with and trust – especially outside of your caretakers – it makes it harder for other people to take advantage of you.

Seek Services From State Agencies With Your Eyes Wide Open

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When you encounter financial abuse, there are state resources that can help, but it’s important to go into the process with your eyes wide open.

For example, one of the agencies — Adult Protective Services — not only provides support for financial abuse, but it also can enforce involuntary institutionalizations.

That means that you could theoretically end up in a situation where your abuser convinces the agency to force you into a communal care setting if the agency doesn’t side with you.

“It can go either way,” Brooks said. “You do not know what the outcome will be. Because it’s your word against the other people’s words.”

Key Tips for Reporting Concerns

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Another important point that Brooks brought up was that if a concerned friend or family member reports to a state agency, often that isn’t enough.

“They might say, ‘Yes, we’ll investigate and do a welfare check,'” he explains.

“But when they are doing this welfare check, and the individual is there with their abuser, the abused individual may be afraid to speak up. This then creates the notion that the individual is okay — even though they’re not.”

One way he suggests avoiding this situation is setting up a 1:1 casual discussion between the case worker and the person being abused — no caretakers or anyone else present. This can create a safer environment for the victim to self-advocate.

Speaking up comes with risks you should be aware of, but Brooks says it’s still far and away preferable to staying silent.

“When you’re quiet, nothing is being heard. Nobody knows what is going on. It is best to speak up rather than be a bystander.”

Lean Into State Resources for Elder Financial Abuse

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Here are the governmental agencies and services where you can report elder financial abuse:

An alternative to contacting a state agency is hiring an attorney who specializes in elder law.

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