Financial exploitation of a vulnerable adult is a serious and underreported problem that occurs when a trusted individual misappropriates the assets of a vulnerable adult for the exploiter’s own personal gain. This is one of the most devastating forms of elder abuse, as it has the potential to destroy an individual’s financial stability at a very vulnerable stage of life. Consequently, preventing, detecting, and remedying such financial exploitation is paramount.
Prevention: Developing plans for financial management prior to experiencing vulnerability or diminished capacity is something we should all be doing to ensure our long-term financial security. This includes developing a network of trusted peers and professionals, such as financial advisors and accountants. Engaging financial professionals early on is a proactive way to share information with allies who can often be the first to spot potential red flags, such as large withdrawals or spending activity that is out of character. Financial professionals should be aware of and educated about these issues so that they can respond appropriately when red flags arise.
Detection: Identifying exploitation can be tricky, as the most frequent perpetrators of these crimes are close friends, relatives, or caregivers. Therefore, one of the keys to preventing financial exploitation is knowing what to look for. One of the most common red flags is isolation of the vulnerable adult. Other warning signs include friends or distant family members becoming increasingly involved in the vulnerable adult’s affairs. While isolated, it becomes more likely that a vulnerable adult will make unexpected or unusual changes to their estate plan, such as their will or trust. Other warning signs include inappropriate financial compensation for services such as caretaking or companionship, the vulnerable adult’s reluctance to discuss financial matters, the perpetrator’s refusal to share pertinent information with the vulnerable adult’s close friends and family, and the granting of access to the vulnerable adult’s financial accounts, including adding the exploiter’s name to existing accounts or setting up new ones.
Remedies: Most states, including Arizona, have harsh statutory penalties for perpetrators who financially exploit vulnerable adults. In Arizona, not only will an exploiter be ordered to pay civil damages, they can also face punitive damages up to three times the amount of original damages, as well as criminal prosecution by the Attorney General’s Office. Sadly, sometimes financial exploitation is not discovered until after a vulnerable adult has already passed away. In such cases, the exploiter can also be disinherited or required to forfeit benefits he or she may have otherwise been entitled to under the vulnerable adult’s estate plan. In recent years, Arizona has dedicated significant resources to preventing financial exploitation, including passing legislation to assist financial professionals with identifying, reporting, and preventing suspected exploitation. Similar efforts are being implemented at the federal level with the creation of the Senior Security Act, which establishes a task force to combat the exploitation of seniors.
Protecting one’s financial stability and long-term legacy is an important part of asset management. Despite local and federal efforts to combat it, financial exploitation remains a prevalent form of elder abuse, and it is important to identify ways to prevent abuse, identify misconduct, and seek counsel if exploitation is suspected. If you think one of your loved ones is being financially exploited, or if you ever find yourself facing claims of financial exploitation, the attorneys at Tiffany & Bosco are available to assist you.