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How Your Estate Plan Can Help Prevent Elder Exploitation

Elderly woman on the phone at risk of exploitationFinancial exploitation has been called “the crime of the 21st century” with one study suggesting that older Americans lost at least $2.9 billion to financial exploitation in 2010 by a broad spectrum of perpetrators, including persons they know and trust, as well as strangers. Cognitive impairment diminishes the ability of some older adults to make financial decisions and to detect frauds and scams. Here is an example, for instance, of potential elder exploitation by a local insurance agent.

Elder exploitation cases tend to be complex and can be difficult to investigate and prosecute. Elders can lose their life savings and can have little to no opporunity to gain them back, which means they may receive inadequate health care as they age and they may lose the ability to live independently due to lack of funds. Medicaid, which is our social safety net for health care, is not very good at paying for care at home as we age

What is Elder Financial Exploitation?

Financial exploitation is the fraudulent or otherwise illegal, unauthorized, or improper actions by a caregiver, fiduciary, or other individual in which the resources of an older person are used by another for personal profit or gain; or actions that result in depriving an older person of the benefits, resources, belongings, or assets to which they are entitled. We have more on elder financial exploitation in Florida, which discusses the elements of exploitation and penalties therefrom. To summarize, Florida law says that the elements necessary to establish that an elder or disabled person has been subject to exploitation are:

  • the victim was a vulnerable adult;
  • the defendant wrongfully appropriated the victim's property; and
  • the defendant knew, or should have known of the wrongful nature of its conduct.  

Common Examples of Elder Exploitation

While every situation is different, here are some common ways the elderly may be exploited:

  • Exploitation by an agent under a power of attorney or person in another type of fiduciary relationship
  • Theft of money or property, often by a family member, caregiver or in-home helper
  • Investment fraud and scams, including deceptive “free lunch seminars” selling unnecessary or fraudulent financial services or products
  • Lottery and sweepstakes scams
  • Grandparent/imposter scams
  • Tax and debt collection scams
  • Scams by telemarketers, mail offers or door-to-door salespersons
  • Computer and Internet scams
  • Contractor fraud and home improvement scams

An Estate Plan Can Help Protect Against Exploitation

One of the main things you can do is to create an estate plan and prepare for your incapacity. Creating your estate plan generally means planning for your death and your incapacity.  Estate planning generally starts out with:

  • Revocable Living Trust: This can help protect you from exploitation as it is generally harder to for strangers to access your trust account over assets in your own, individual name. While living trust planning is generally good estate planning as assets in the trust avoid probate upon your death, assets in your trust also provide a line of protection against would-be exploiters as the assets are owned by your trust, not owned in your own, individual name.
  • Creating Your Durable Power of Attorney: This is very important as it names the right person to help make your financial and legal decision, even before you have lost capacity.
  • Create a Designation of Pre-Need Guardian: Your estate plan can name who you would want as your guardian in the event you are being exploited and have capacity issues. Many attorneys create a designation of pre-need guardian as a part of their durable power of attorney.

Ways to Minimize Risk of Elder Exploitation

When creating your trust and power of attorney, you need to pick the right fiduciaries to help you. Here are some tips on finding the right person/persons to name as your successor Trustee, power of attorney and health care surrogate:

  • Trust, but verify. Only appoint someone you really trust and make sure they know your wishes and preferences. You can require in your POA that your agent regularly report to another person on the financial transactions he or she makes on your behalf.
  • Avoid appointing a person who mismanages their own money or has problems with substance abuse or gambling.
  • Tell friends, family members, and financial advisers about your power of attorney (POA) so they can look out for you. Ask your financial institution about its POA procedures. The financial institution may have its own form that it wants you to complete. But a POA that is valid under Florida law should be accepted by financial service providers.
  • Remember that POA designations are not written in stone – you can change them. If you decide that your agent isn’t or is no longer the best person to handle your finances, you can revoke (cancel) your POA. Notify your financial institution if you do this.
  • Avoid appointing hired caregivers or other paid helpers as your agent under a power of attorney.
  • Beware of someone who wants to help you out by handling your finances and be your new “best friend.” If an offer of help seems too good to be true, it probably is.

Help in Florida

If you suspect that someone you know is being exploited, here are some steps you can take:

  • Call 1-800-962-2873 - this the Florida helpline that has people to help triage any issues - or go to this webpage
  • Contact the local police department - some police departments have elder advocates on staff
  • Seek an elder exploitation injuction
  • Seek an emergency temporary guardianship

Call Our Office if You Need Us

Our elder law department is equipped to help you and your loved one in difficult times. We offer:

 

D. Rep DeLoach III
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Estate Planning and Board Certified Elder Law Attorney
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