Founding partner, Michael D. Rudy, discusses financial elder abuse and the staggering number of unreported cases of abuse.
As our population ages, financial abuse perpetrated against our elderly citizens has reached epidemic proportions. There are thousands of cases each year of financial abuse committed against elderly citizens in various forms, including: embezzlement; conversion; theft; fraudulent use of credit cards; improper home equity lines or mortgages; fraudulent deeds, wills and trusts; and improper use of joint accounts. This financial abuse has a wide range of implications for heirs and family members.
To offer a sense of the scope of the problem of financial elder abuse, consider the following:
- About one in five Americans age 60 and older will become a victim of financial exploitation during their lives.
- Based upon various Mainland studies there are 44 times more unreported claims than there are reported claims of financial elder abuse to agencies such as Hawaii Adult Protective Services or other similar local authorities. In Hawaii in 2015, Adult Protective Services reported a total of 265 cases of financial exploitation on elderly Hawaii citizens. Using Mainland data as a guide there could have been as many as 11,000 unreported instances statewide in the same year.
- Contrary to popular notion, it is direct relatives – a spouse, child or grandchild – who are to blame for as much as 65 percent of the financial abuse committed against an elder. In Hawaii, anecdotal evidence suggests that only a slight majority of perpetrators are female versus male, in a typical perpetrator age range between 45 and 60.
- For dementia patients, the rate of financial abuse committed against them is two to three times that of the normal elderly population. The prevalence of dementia in the elderly population (ages 75 to 85) is approximately one in every three. Given the dementia rates as cited above, and the incidence of financial abuse committed against dementia patients, we could expect to have anywhere from 3,000 to 6,000 cases of financial elder abuse per year in Hawaii.
The number of unreported financial elder abuse cases is staggering. Most abuses are discovered when one family member realizes that another family member is acting as a conservator, trustee, or holds a power of attorney, and has been using that position to steal from the elderly adult, who is typically incapacitated and unable to handle his/her finances.
In most of these cases, the perpetrator of the financial elder abuse has often given themselves a preferred position in the estate planning documents (e.g. named trustee or attorney-in-fact), making it even more difficult to wrestle away control of the incapacitated adult’s finances from the perpetrator of financial elder abuse.
Our firm has helped many children/spouses/relatives of elders who have been subject to financial abuse. MacDonald Rudy specializes in trust and estates litigation, and we are happy to answer any questions or comments you have regarding financial abuse against a loved one or an elderly person you may know.