Tools to Protect Against Elder Abuse
We have seen an increase in probate cases of elder abuse involving aging adults who are taken advantage of by people they know, trust, and love. Family members often discover too late that their parents or grandparents have been preyed upon by a caregiver or new “friend.” Senior citizens are often isolated and lonely, therefore, they are more vulnerable to thieves who lavish them with attention. At least one -third of people ages 85 and over suffer from some form of dementia. Researchers have found that financial judgment may be the first type of judgment to deteriorate. Yet, the deterioration of financial judgment is difficult to notice during the initial stages of dementia—deeming the understanding of elder law and proactive protection of estates essential.
In this article, we will describe the astonishing numbers of elderly persons who are victims of elder abuse involving non-violent, financial crimes. Next, we will set forth how an individual can structure his or her estate plan so as to protect oneself from potential financial predators. Then, we describe how a guardianship estate can protect your elderly loved ones. Lastly, we will describe how an heirs and beneficiaries may attempt to recover money and property from a “wrong doer” after a family member passes away.
Statistics & Studies
In November 2014, the United States Department of Justice issued a report detailing violent and non-violent crimes against the elderly between 2003 and 2013. The results and findings in this report are disturbing. While violent crimes and property crimes against the elderly has decreased, 2.1 Million persons over 65 were victims of identity theft in 2012. Only 32% of elderly victims of theft actually report the crimes committed against them to police.
As a result, crimes against the elderly and financial abuse of elderly persons go unnoticed, continuing for many years. Thieves often drain money at a slow rate from savings or retirement funds so as not to draw attention to the theft and exploitation. The predator is generally a family member, a care giver, or a close friend who holds a position of trust with the elderly individual. In fact, it is estimated that nearly 5 million persons over 65 are victimized to some extent by a care giver, friend, lawyer, family member or financial advisor. Yet, the exploitation is often treated as a private matter and dismissed with little or no criminal penalty. The matters, if they are addressed at all, must be handled in civil court. Unfortunately, many older people are also reluctant to pursue legal remedies against their friends and relatives. They may feel ashamed, embarrassed, and guilty.
In an article from November 2015, the New York Times described the sad account of an 86 year old widow in Seattle. Ms. Cooper wrote at least a dozen checks totaling more than $217,000.00 to a person who claimed to provide services as a “home organizer.” Even through Ms. Cooper’s family visited her regularly, they did not notice any issues with Ms. Cooper’s finances. Looking back, Ms. Cooper’s granddaughter wishes that she had been more suspicious of her grandmother’s new friend, who got “so close so fast.” Unfortunately, Ms. Cooper was unable to recover any of the money she lost.
With our aging baby-boomer population, we can expect stories like Ms. Cooper’s to become more and more common. According to the U.S. Census Bureau, about 40.3 million persons were age 65 or older in 2010, an increase of 5.3 million since 2000 when the elderly population totaled about 35 million. Additionally, among the total U.S. population, the percentage of persons age 65 or older increased from 12.4% in 2000 to 13.0% in 2010. The percentage of elderly persons among the total U.S. population is projected to reach 16.8% by 2020.
At Hays Firm, LLC, we have seen an increase of cases involving exploitation by a friends, neighbors, and family members. If you are concerned about your elderly loved one, please contact one of our attorneys. We can attempt to intervene and prevent financial abuse.
Power of Attorney Documents
One way that an individual can protect themselves against exploitation as they age is to create an estate plan. A well-crafted Estate Plan includes power of attorney documents. In power of attorney documents, you name an agent that can make decisions for you. For example, in a “Power of Attorney for Property”, you name an agent who can make decisions regarding your finances. Likewise, in a “Power of Attorney for Healthcare”, you name an agent who can make decisions for your health care and for your end of life care.
Power of Attorney documents may be effective immediately or they may be drafted to be effective only after an individual is unable to make competent decisions. If you are diagnosed with dementia, or if your judgment becomes otherwise impaired, your agent will “step into your shoes” to make decisions to protect you and your estate and finances. An agent owes a fiduciary duty to the person for whom they are acting. Illinois law requires an agent named in a power of attorney document to “act in good faith for the best interest of the principal, using due care, competence, and diligence.” The agent must also “keep a complete and detailed record of all receipts, disbursements, and significant actions conducted for the principal.”
Therefore, it is essential that you pick someone you trust will act with the utmost good faith to be your agent under a power of attorney document. The law provides penalties and civil remedies if your agent becomes the abuser.
With power of attorney documents in place, your identified agent can review or monitor your bank accounts and retirement savings funds. If a new “friend” comes into your life, like the home organizer who worked her way into Ms. Cooper’s life, your agent will be able to monitor your accounts and will notice when the first check is written.
The down side of power of attorney documents is that the aged person still has control of and access to all of their finances. Therefore, a vulnerable elderly person can be persuaded to go to the bank and remove funds for his or her new “friend.” The elderly person can still write checks and add new account owners and beneficiaries.
If your loved one still lives independently but is vulnerable to thieves and financial predators, guardianship may be more appropriate. We have recently opened several guardianship estates for individuals who are still capable of living independently. One client still drives to visit friends and family. Another freely participates in community events and organizations. Yet, both individuals suffer from diminished capacity and lack sound judgment over financial matters. Because the individuals are living outside of a nursing home and independently from their families, they are even more vulnerable to exploitation. One can easily imagine a scenario in which these friendly outgoing individuals sign an exploitative contract or loan new “friends” thousands of dollars.
Guardianship provides an additional layer of protection over the Estate of elderly individual from financial and emotional elder abuse. During a guardianship proceeding, a probate judge declares that the elderly individual is incapable of making decisions regarding their financial affairs. A guardian of the Estate is then appointed to take care of the elderly person’s finances and property. The probate judge may also declare that the elderly individual is incapable of making decisions regarding their health. Then, a guardian of the Person will be appointed, as well. The guardian of the Estate and guardian of the Person can be the same individual. Or, the guardian of the Estate may be an individual or an entity like a bank that is different from the individual serving as guardian of the Person.
As long as the elderly person is alive, the guardian of the Estate is required to present an annual accounting to the probate judge. The annual accounting provides the judge and any other interested parties the details of how the elderly person’s money was spent throughout the year. The guardian of the Person is required to present an annual report to the probate judge. In the annual report, the guardian of the Person gives a brief summary of the elderly person’s life over the past year: where they live; if they moved; if there was a major health incident, etc.
The attorneys at Hays Firm, LLC are available to discuss elder law and the guardianship process with you and your elderly loved one.
Unfortunately, many people do not realize that their loved one was a victim of elder abuse until after the person passes. It is difficult to recover monies after a person dies. However, recovery is not impossible. The Illinois Probate Act provides heirs or otherwise interested parties with tools to investigate financial abuse and procedures for recovering monies that were transferred prior to death.
Many times, a thief or abuser will exert undue influence over an elderly person, coercing them into signing a new will. Such wills may be attacked and may be revoked by a probate court.
The attorneys at Hays Firm, LLC have immense experience with the Illinois Probate Act. We have engaged in will contest disputes on both sides of the litigation. We represent heirs who are attacking a will. We also have cases in which we contend that the will executed was a valid expression of the elderly person’s wishes.
Elder abuse is on the rise. To protect yourself and your elderly loved ones become educated in the risks and the red flags. Speak to an attorney to set up a plan. If you suspect that your loved one is being exploited contact your attorney immediately so that any abuse may be discovered and recovered.