When families think about financial exploitation of an older adult, they often picture a stranger. Maybe it is a scammer on the phone, a fraudulent email, or someone pretending to be from the bank, Medicare, or the government.
Those risks are very real. But financial exploitation can also come from someone the older adult already knows, loves, and trusts.
A recent Wall Street Journal story illustrates just how complicated these situations can become. The article follows the case of an older woman whose niece became involved in her care and finances. Authorities allege that hundreds of thousands of dollars were taken from the aunt’s accounts. The allegations eventually resulted in criminal charges and a complicated legal battle. The niece has denied wrongdoing, and the legal system will ultimately determine what happened.
But the story raises an important issue for every family caring for an aging parent or relative:
Financial exploitation does not always begin by looking like theft. Sometimes it begins by looking like help.
When Helping Becomes Control
As someone gets older, it is perfectly normal for family members to become more involved. A daughter might start helping Mom pay her bills. A nephew might drive an uncle to the bank. Someone may get access to a checking account to pay for groceries or caregivers.
Eventually, a family member may become power of attorney. They might also take responsibility for communicating with attorneys, financial advisors, doctors, and other professionals.
None of this necessarily means something is wrong. In fact, this kind of support is often exactly what an aging person needs.
The concern begins when assistance slowly turns into control without transparency or oversight.
That line can become even harder to see when cognitive decline is involved. An older adult may still carry on a normal conversation and express strong opinions. At the same time, they may struggle to understand complicated financial decisions or remember recent transactions.
This is why families need to look for patterns rather than wait for one obvious event.
Signs of Possible Financial Exploitation
Financial exploitation is not always obvious. One unusual transaction does not necessarily mean something is wrong. Families should pay attention to new behaviors, unexplained changes, and patterns that do not make sense.
Warning signs may include:
- Unexplained withdrawals or transfers from bank or investment accounts.
- Large or unusual gifts that are out of character for the older adult.
- Bills suddenly going unpaid even though there should be enough money available.
- New names added to bank accounts or other financial accounts.
- Sudden changes to a will, trust, beneficiaries, deed, or power of attorney.
- A previously uninvolved family member suddenly taking control of finances or important decisions.
- An older adult who cannot explain a transaction or does not remember making it.
- Someone speaking for the older adult and not allowing them to answer questions themselves.
- A family member or caregiver limiting access to relatives, friends, advisors, or other professionals.
- Money intended for care not being spent on care, such as inadequate food or insufficient caregiving despite available resources.
- Valuable possessions disappearing without a reasonable explanation.
- Increasing isolation, especially when one person becomes the gatekeeper for visits, phone calls, finances, and professional relationships.
Any one of these signs may have a reasonable explanation. The concern grows when several changes occur together, explanations do not make sense, or the older adult seems confused, pressured, fearful, or increasingly isolated.
The issue is not family involvement. The issue is control without transparency.
Cognitive Changes Can Make Financial Decisions More Complicated
Families should also be careful about assuming that because an older adult agreed to something, there cannot be a problem.
A diagnosis of dementia does not automatically mean someone cannot make financial decisions. Older adults also have every right to make choices their children may disagree with.
But changes in memory, judgment, or cognition should cause families and professionals to pay closer attention.
Suppose Dad suddenly gives someone $50,000. The question should not simply be, “Did Dad say yes?”
Did he understand what he was giving away? Did he understand how it could affect his own financial security? Why did he make the decision? Was anyone pressuring or influencing him?
These questions can be difficult, particularly when family relationships and money are involved. Having a plan in place before cognitive or health changes occur can prevent many of these situations from becoming crises.
Have a Financial Plan for Care Before Care Is Needed
Most families understand the importance of estate planning. They have a will or trust that explains what happens to Mom and Dad’s assets after they die.
But there is another financial question that may be just as important:
How will Mom and Dad’s assets be used to take care of them while they are alive?
Families should have a plan for what assets will be used to pay for care and what the budget will be.
If Mom wants to remain at home, how much can she afford to spend each month on home care? Which accounts or assets should be used first? Does she have long-term care insurance? What benefits may be available? At what point would the cost of remaining at home require the family to reconsider the plan?
The family should also understand who has the authority to make financial decisions if Mom or Dad can no longer make them independently.
Having these conversations while everyone is healthy and able to participate is much easier than trying to figure them out during a hospitalization or family crisis.
If a Family Member Is Being Paid, Set the Rules
This becomes especially important when a family member is providing care.
There is nothing inherently wrong with paying a son, daughter, niece, nephew, or another relative to care for an aging family member. In many situations, it may be entirely appropriate.
But there should be clear rules and a budget.
Before money starts changing hands, the family should answer some basic questions:
- What is the family member being paid to do?
- How much will they be paid?
- Will they be paid hourly, weekly, or monthly?
- How many hours of care are included?
- What expenses can they reimburse themselves for?
- How will payments and expenses be documented?
- Who will review the spending?
- What happens if Mom or Dad eventually needs more care than the family member can provide?
Without clear expectations, the lines can become blurry very quickly.
A $2,000 payment might be viewed by one person as compensation for caregiving. Someone else may believe it was reimbursement for expenses. Another sibling may think it was a gift.
When expectations were never established, everyone may have a different understanding of what the money was for.
A good aging plan creates clarity around who provides the care, how much can be spent, where the money comes from, who has authority to spend it, and how everyone remains accountable.
Create Checks and Balances Before There Is a Crisis
One of the best protections against exploitation is having more than one set of eyes on the situation.
For families with significant assets or complicated circumstances, there may already be an attorney, CPA, financial advisor, trustee, physician, household staff, and several family members involved.
Each person sees a different piece of the puzzle.
A financial advisor may notice unusual withdrawals. An attorney may question an unexpected change to estate documents. A physician may recognize cognitive changes. A trustee may notice spending that does not match the established plan.
But who is seeing what is actually happening in the older adult’s daily life?
That is where a professional Care Manager can be extremely valuable.
A Care Manager Can Be an Independent Set of Eyes
A Care Manager is not there to decide who should inherit Mom’s money or take sides in a family disagreement. The focus is on the older adult’s health, safety, independence, wishes, and quality of life.
At EasyLiving Care Management, we may notice that Mom is becoming increasingly confused even though she sounds fine during a five-minute phone call. We may discover that there is not enough food in the house despite substantial financial resources. We may see missed medications, forgotten medical appointments, unreliable caregivers, or increasing isolation.
Those observations provide context that a bank statement cannot.
A Care Manager can also help families understand the level of care Mom or Dad actually needs and how those needs may change. That information can help the family establish a realistic care budget with their financial advisor, attorney, trustee, or other professionals.
The attorney can focus on the legal plan. The financial advisor can manage investments. The trustee can oversee the trust. The physician can address medical concerns.
The Care Manager helps everyone understand what is actually happening with the person they are all trying to protect.
Most importantly, families should not ignore a concern simply because the person involved is family.
Asking questions does not mean accusing someone of stealing. Creating oversight does not mean taking away an older adult’s independence. Having a budget does not mean Mom cannot spend her own money.
It means creating a plan while everyone can still participate in making it.
If something changes, pay attention. If an explanation does not make sense, keep asking questions. If Mom or Dad’s cognition is changing, bring in the appropriate professionals. If one person has complete control over everything, consider adding checks and balances.
And if you believe financial exploitation may already be occurring, do not dismiss it as simply a family disagreement. Depending on the circumstances, it may be appropriate to involve an elder law attorney, financial institution, Adult Protective Services, or law enforcement.
The goal is not simply to protect Mom and Dad’s money. The goal is to make sure their money is available and used appropriately to provide the care, safety, and quality of life they worked for.
At EasyLiving Care Management, we are experts in Aging Wisely. Our Care Managers work alongside families, attorneys, financial advisors, trustees, and healthcare professionals to help families create a plan, recognize changes, and make sure the older adult remains at the center of every decision.
