An Assistant Secretary for Aging with the federal Department of Health and Human Services said at a recent event that the department estimates that older people face exploitation in their financial affairs at the rate of around 1,000 per day. According to the assistant secretary, people in the field believe that means somewhere around 40 percent of elderly Americans have been financially abused, with the majority of cases going unreported.
While this statistic may bring to mind the various internet and phone scams that are often featured in the news, the truth is that most of this exploitation is done by people who know the abused individual and are trusted to some extent. Oftentimes it is family members, especially adult children and spouses, who perpetrate the abusive acts. Unfortunately, it is also sometimes court-appointed guardians who, instead of fulfilling their duties and protecting the best interests of their wards, exploit their positions of power for their own benefit.
This potential for financial abuse should inform individuals when they are doing their estate and incapacity planning. It is especially important that someone who is trusted beyond doubt be given the responsibility of making financial decisions in case of incapacity.
People close to an elderly person should also be aware of what a guardian is doing for their loved one, and if they suspect exploitation it needs to be reported. They may also wish to explore the possibility of having a court appoint a new guardian if the current guardian is acting in an abusive manner. It is also important to note that Florida law requires anyone who becomes aware of the abuse or exploitation of an elderly person to report that fact to the proper authorities.
Source: thinkadvisor.com, "Saving Exploited Elders ," Olivia Mellan, Sept. 29, 2014