Greed or Passive Opportunism? Financial Exploitation of the Elderly an Unfortunate Reality
Posted on: October 30th, 2016
By Hallie Zobel, Esq.
From where I sit, it’s not uncommon to find myself with a front row seat peering into the darker side of humanity. It’s hard to imagine anything more heartbreaking than litigating a probate case involving the apparent financial exploitation of an elderly citizen with dementia.
But the sad reality is that instances of financial exploitation of the elderly are actually on the rise throughout our country. Some elder law professionals speculate that the increase is due to a combination of factors, including a growing aging population, greater prevalence of dementia, and an increased number of elderly seniors without proximity to a trusted family member who can watch over them.
Who are the perpetrators? It could be anyone. They can range from caregivers, home repair scams and handymen, to family members and “institutional perpetrators” such as professional advisors, trustees, and church ministers.
Major Study Inspires Action
According to a widely-circulated study by the MetLife Mature Market Institute in 2011, the financial loss by victims of elder financial exploitation exceeds $2.9 billion dollars annually – a 12 percent increase since 2008.
Numerous states have taken legislative action in the wake of the surge of incidences and the increase in probate litigation involving allegations of undue influence and exploitation of seniors.
In 2014, Florida passed an Elder Exploitation Law that makes it easier for law enforcement to prosecute those who prey on our most vulnerable citizens by providing additional protections and harsher penalties. According to the National Conference of State Legislatures, in 2016, thirty-three states, the District of Columbia and Puerto Rico addressed financial exploitation of the elderly in legislative sessions.
Exploitation Increases During the Holidays
As the Holiday Season approaches, our seniors become even more vulnerable. A key finding from the same Metlife study indicates that financial exploitation of the elderly increased substantially over the Holidays (from November 2010 through January 2011). The findings indicate that in almost all instances reported, the goals of financial abuse perpetrators were achieved through deceit, threats, and emotional manipulation of the elder.
A recent Forbes article similarly noted that the Holidays present the ideal time for family members to discuss possible instances of elder financial fraud by scam artists and swindlers who are often active during that time of year. The author goes on to state that once a senior enters their eighth decade, they enter a stage of cognitive decline that makes them more vulnerable to financial exploitation and predation. (See Merrell Bailey’s blog on spotting the warning signs of incapacity.)
Financial Crimes of “Occasion, Desperation, and Predation”
What are the key motivators of financial crimes against the elderly? The following is a verbatim excerpt from the Metlife study:
The third category above provides the foundation for a recent probate case that I litigated, as summarized below.
Probate Case Summary: Financial Predation by Engendering Trust
As the attorney who litigated the following probate case, I believe it clearly illustrates how the combination of advanced age, dementia, and lack of family involvement are prime ingredients for exploitation and undue influence by non-family members who are skillful at engendering trust.
My client, whom I will call Mrs. Jones, had recently become a widow after her 91-year-old husband passed away and left his entire estate to a non-profit charitable organization. Mrs. Jones and her attorneys believed that the non-profit organization used what I would term “passive-aggressive opportunistic tactics” to convince Mr. Jones to leave his entire estate to the charitable organization. Members of the organization were well aware of his wealth and knew he suffered from mental confusion due to dementia.
Mrs. Jones explained that she and her husband had a “later in life” second marriage and that Mr. Jones had no children from his previous marriage. Prior to Mr. Jones’ death, my client was diagnosed with illness and required frequent medical attention. As her husband was unable to drive her to appointments, she moved in with her daughter who served as her caregiver.
At some point during their marriage, Mr. Jones had created an estate plan without involving his wife in the process. He secretly named the charity as beneficiary and he appointed a trustee who was associated with the charity. During the time that Mrs. Jones was undergoing medical care and living with her daughter, Mr. Jones passed away. The trustee of Mr. Jones’ estate refused to respond to Mrs. Jones’ communications regarding her entitlement to any assets in the estate. As a result of the trustee’s actions, she was denied a family allowance, disallowed access to the family home, and denied the use of their automobile – all of which she was entitled to by law.
At the end of the day, we were successful in representing Mrs. Jones in probate court. Under Florida law, Mrs. Jones is considered a “pretermitted spouse” and therefore can take an intestate share of the estate should she win at trial. Our client was happy with the outcome and we were personally gratified to see justice prevail.
Words of Caution | Resources to Contact
When a non-family member or entity is named as the single beneficiary of an estate’s assets, questions may arise in probate court as it relates to undue influence. (See my previous blog on Undue Influence.)
At Your Caring Law Firm, we counsel our clients on the pros and cons of appointing trustees who are also beneficiaries of the estate, versus naming a third-party corporate trustee with no vested interest in the estate. We also discuss the possibility of naming co-trustees in order to ensure the proper fiduciary management of the estate.
If you suspect a loved one is the victim of elder abuse or financial exploitation, we encourage you to contact the Department of Elder Affairs, or report suspected cases to the Florida Abuse Hotline at 1-800-962-2873.