chevron-down Created with Sketch Beta.
July 16, 2023

Tackling the High Cost of Abuse: Working with Older Victims of Financial Exploitation

Erica Costello

The full issue, in which this article as well as any footnotes and endnotes appears, can be found here.

In  June of 2023, the AARP published a report entitled, “The Scope of Elder Financial Exploitation: What it Costs the Victim,” which found that victims over age 60 lose $28.3 billion annually through financial exploitation. These costs can include significant portions of the older victim’s life savings, as well as their property or other assets. 

The report further found that most of the financial exploitation was committed by individuals known to the older victims, including family, friends, and caregivers.  Such individuals were found to be responsible for stealing $20.3 billion from older adults each year.  However, it is estimated that only 12.5% of financial exploitation cases involving perpetrators known to the older victims are reported (compared to 67% of financial exploitation cases perpetrated by strangers).

The report confirmed that the costs of financial exploitation can be quite substantial to older victims of abuse. It is not uncommon for older victims to lose most of their retirement savings or other resources, including their homes or residential properties. Because most cases of financial exploitation involve people known to the older victim, they may be hesitant to report the exploitation due to shame or embarrassment, or in some cases, because they rely on the perpetrator for care and assistance. Older victims may also experience a decline in their mental or physical health, with some studies finding that financial exploitation among older adults can lead to a premature death.

Financial exploitation can also be very costly to the caregivers of older victims.  It is often family caregivers who provide care after an older victim’s resources have been lost due to financial exploitation. The loss of time and resources provided as a caregiver can be significant. One study found that caregivers of older adults collectively sacrificed $67 billion in lost wages due to unpaid caregiving.

Because of the significant costs associated with financial exploitation, there are several things that attorneys should consider when working with older adult clients:         

  1. Anyone can be a victim of financial exploitation, regardless of age. As such, it is important for attorneys to recognize the warning signs of financial exploitation, which can include sudden changes to bank accounts or unexplained withdrawals of funds, sudden changes to a will, power of attorney, or financial documents, unpaid bills, or sudden transfers of property or assets to a family member or someone outside of the family. If you suspect financial exploitation involving an older adult, you should discuss with your client possible resources that are available in their communities, including Adult Protective Services or law enforcement. Some communities also have programs through their local Area Agencies on Aging (AAA) that give help and support to older victims of crime.
  2. Family members do not have a “right to an inheritance.” Financial exploitation may occur when a family member feels like they are entitled to the property or assets of an older adult because it is a part of their “future inheritance.” However, an older adult’s property and assets should be used to provide for their needs (even if these costs diminish the value of a family member’s “future inheritance”).  Older adults can also be “penalized” if such property or assets are taken by family members before their death, which may include becoming ineligible for certain government benefits or services (i.e., Medicaid). It is important for attorneys to discuss these issues with their client and develop an estate plan that prioritizes the needs of the older adult over the desires of an entitled family member seeking an early inheritance.
  3. Civil legal remedies may be an option. If financial exploitation has occurred, there are several civil legal remedies that may be an option for your client. Depending on the laws of your state, you may be able to seek an order voiding or nullifying a transfer of property or assets due to fraud, undue influence, or incapacity.  Financial protective orders to prevent abuse or change a power of attorney can also be sought in some states, including Alaska. Some states also allow for civil actions of recovery under elder abuse statutes, which includes financial exploitation. 

As the AARP’s recent report highlighted, the costs of financial exploitation are significant to older victims and their caregivers.  However, attorneys can play an important role in the prevention and furtherance of such abuse. Working with older adult clients, attorneys can help identify local resources in the community that assist older victims of financial exploitation. Attorneys can also help older clients develop estate plans that prioritize their needs above the desires of entitled family members seeking an early inheritance. Finally, depending on state laws, attorneys may be able to pursue certain civil legal remedies to void transfers or recover property or assets lost through financial exploitation.    

    Erica Costello

    Senior Attorney, ABA Commission on Law and Aging

    The material in all ABA publications is copyrighted and may be reprinted by permission only. Request reprint permission here.