Financial elder abuse is the act of taking advantage of older people (typically 60-65 years and over) and unfairly benefitting from their monetary resources. Offenders of elder financial abuse can comprise family members, business partners, caregivers, conservators, and even strangers.
Most instances of elder financial abuse are conducted by someone close to the individual by taking advantage of the victim’s trust or their intimate knowledge of the individual. Some of the tactics involved in financial elder abuse can cover: the unauthorized use of an older person’s social security, gaining power of attorney by trickery, engaging in fraud, hiding, secreting, or appropriating assets, and financial neglect.
Individuals at risk for financial elder abuse encompass elder individuals who depend on care from family, those who recently lost a loved one who handled the finances, those residing in private or public long-term care facilities, and those showing signs of infirmity. In addition, financial elder abuse sometimes involves threats. These threats can be both physical and verbal.
For example, a caretaker who threatens to withhold essential care for an older relative or dependent. Another example could be a family member that threatens an older relative that they will take them to a nursing home unless they give over financial assets, which would be considered engaging in elder abuse.
Unfortunately, financial elder abuse often involves other family members who feel entitled to own or receive a parent’s, grandparent’s, or other older relative’s physical or monetary assets. For example, a study recently showed that elder abuse is more common than any other form of abuse across the United States.
While this statistic is alarming, it does not even begin to reflect the full scale of the issue. The National Center for Elder Abuse also notes this figure is typically underreported. Because the abuse most often occurs at the hands of a family member, most abuse goes undetected.
From the small number of cases that are officially reported, studies have shown that abusers exploit up to five million older people each year, costing them up to over $35 billion each year.
With the aging and retiring population set to double in the coming years, the potential damage caused by financial elder abuse is poised to skyrocket. This growing awareness is just one of many reasons why federal and state governments have begun to address these specific issues.
Why are Financial Abuse Laws Important?
A mark of a well-functioning society is how well it treats its most vulnerable populations. With the rising increase of retirement-aged Americans in the next twenty years, it has been increasingly important to pass strong financial abuse laws. These financial abuse laws help protect our vulnerable senior population and help protect their assets during their twilight years.
After retirement, which for most Americans is around the ages of 60 to 65, people who are on a fixed income with limited savings. After retirement, seniors are less able to recover from serious financial mistakes or fraud due to their decreased lack of earning power.
The elderly are extremely sensitive to financial crimes since dramatic changes to their economic status in retirement can cause extremely dangerous outcomes regarding their health and well-being. The long-term consequences of elder financial abuse can be absolutely devastating. Senior Americans may lose their entire life savings and no longer be able to afford housing, nursing home care, medical treatment, or other basic living expenses, such as food and clothing.
Financial abuse can also be emotionally damaging to seniors. In some cases, seniors have been diagnosed with depression or anxiety after being victim to financial exploitation. Elder Financial abuse tends to be more difficult to detect than physical abuse and neglect because family members often do it, trusted friends and caregivers. Because the effects of this abuse are “invisible,” it is much more difficult to identify or detect it. This is one of the primary reasons why additional laws are needed to protect elders from financial abuse.
The financial exploitation and abuse of older adults come at a great cost. According to the National Council on Aging, it is conservatively estimated that victims lose close to $36.5 billion each year. The large volume of elder financial abuse can be partially attributed to the previous lack of awareness, regulation, and enforcement of these crimes.
Federal Laws Vs. State Laws
Because elder financial abuse is a complex issue, it often calls for a multifaceted policy response combining public health initiatives, social services programs, and criminal law enforcement to address abusive behavior.
When it comes to laws enacting protections for seniors from the dangers of elder financial abuse, it is critical to understand the distinction between the country’s different governing and legislative bodies.
Federal laws are passed by Congress and have sweeping powers over the entire nation. These laws apply to all 50 states, the District of Columbia, and U.S. territories such as Guam. The U.S. Constitution creates the basis for federal law; it grants government power and responsibility and gives every United States citizen basic rights. Federal laws typically include:
- Immigration laws
- Bankruptcy laws
- Social welfare programs
- Anti-discrimination and civil rights laws
- Patent and copyright laws
- Laws regarding federal crimes
As our senators and members of Congress gain information about the increasing magnitude and consequences of the abuse, neglect, and exploitation of the elderly, bills have been introduced in Congress to protect the programs and service providers that help prevent, detect and intervene in abuse of elders and people with disabilities.
- Elder Justice Act (Passed 3/23/10): The Elder Justice Act (EJA) was the first piece of federal legislation that authorized a specific source of federal funds to address elder abuse problems, neglect, and exploitation. The Elder Justice Act also helps to empower grants for forensic centers to develop expertise on elder abuse, neglect, and exploitation. It also enhances long-term care staffing, facility data exchange, and the mandatory reporting of crimes against residents in federally-funded facilities.
- Older Americans Act (7/14/65): The passing of the Older Americans act in 1965 was in response to policymakers’ concerns about the lack of community social services for aging Americans. The Older American Act established authority for financial aid to various states for protecting communities in danger, developing projects, and personnel training on elder abuse. The law also confirmed the Administration on Aging (AoA) to oversee these new grant programs and serve as a focal point federally on matters concerning older persons.
Financial Elder Abuse by State
While Federal law does play some role in shaping how elder financial abuse is handled in the U.S., the responsibility of criminal matters is up to the individual state. State laws are rules that a state legislative body adopts, and that are formally signed into law by the governor of the state. All state laws apply to the people who live in or pass through that area. If a state law conflicts with federal law, federal law is upheld unless a decision within the supreme court overturns the federal law itself.
The general purpose of state law is to grant citizens within additional state rights not explicitly granted by federal law rather than to restrict rights granted by federal law. State courts typically have jurisdiction over criminal law, real estate law, and welfare matters. For this reason, some states have deemed it necessary to create additional laws regarding the issues of elder financial abuse.
In financial elder abuse, some states have different definitions for who is considered an “elder,” other punishments for perpetrators of abuse, and different mechanisms for reporting and proving accusations of elder financial abuse.
Financial Elder Abuse Laws That Every State Has:
The legal and political differences across the United States are extensive. While some states may share similar statutes or regulations, no two states’ laws are the same. This is true regarding laws governing and enforcing financial abuse against elders. Some states have laws outlining civil financial exploitation offenses regarding elders, while others have similar rules with broader civil elder abuse or criminal laws. Unfortunately, the only category that all states appear to agree upon is protection specifically for adults who are considered “vulnerable.”
- Protection for Vulnerable Adults: Laws protecting against the abuse of a “vulnerable” adult generally regulate against exploitation. This is usually defined as spending or using another person’s capital, including funds, property, money by force, or deception or coercion. A “vulnerable” adult is defined as anyone eighteen 18 years of age in these cases. Above, because of mental or physical dysfunction, they cannot manage their assets, carry out a daily living, or protect themselves from abuse like exploitation or a hazardous or dangerous situation without help from others who may need protective services.
States with Unique Financial Elder Abuse Laws
Iowa: Unfortunately, Iowa state law does not specifically broad protections for its elderly population from civil or criminal financial elder abuse cases like other states have done. Instead, Iowa state law only provides specific protections to “dependent adults.” This means that older individuals who still may be targets and victims of abuse may not have a particular legal form of redress unless they are specifically receiving care as a dependent.
Louisiana, Maryland, Maine, Tennessee, and West Virginia: Like Iowa, these states stand out for their lack of elder-specific protections. These states offer protections for adults who suffer from mental or physical dysfunction but do not offer any specific protection to the elderly by definition.
Oklahoma, Pennsylvania, and Florida: Elder financial abuse laws also include clauses outlining economic neglect in these states. Financial negligence consists of repeated instances by a caretaker, or another person, who has taken on the financial management job and fails to use the resources available to restore or maintain a vulnerable adult’s health and physical well-being. This includes but is not limited to squandering or negligently mismanaging the money, property, or financial accounts of an endangered adult, refusing to pay for necessities or utilities promptly, or providing inferior care to an at-risk adult despite the availability of adequate financial resources.
Financial elder exploitation is a serious crime that involves taking advantage of older people and exploiting them for monetary gain. In some cases, these crimes are perpetrated by people close to the individual, including; caretakers, family members, or fiduciaries, like a financial manager.
To best protect your loved ones from falling prey to these terrible crimes, it is important to understand what laws and regulations are in place at the federal and state levels to protect them. In addition, the better you know what is not covered under these laws, the better you will understand the possible risk you or your family members may face.
This will, in turn, help you identify possible cases of elder financial abuse and put you in a better position to prevent these acts from occurring. In addition, understanding these laws can also help you be more vocal in advocating for change if you live in an area that cannot offer the level of protection against elder financial abuse that you think is necessary.