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A Better Partnership


May 2013
May 10, 2013

Guarding Against Financial Elder Abuse

Chances are you have heard a horror story from a friend or coworker about an elderly parent or grandparent being swindled by a relative, caregiver, neighbor or telemarketer. Unfortunately, these horror stories are becoming far more frequent as the American population grows more vulnerable with age. What can you do to protect your older family members? Read on for tips to help you identify and address questionable behavior.

The Problem

The aging process often brings about ailments such as frailty, dementia, hearing loss and vision impairment that make older individuals vulnerable to mistreatment. The exploitation of older persons, known as “elder abuse,” includes physical, emotional or sexual abuse; neglect by caregivers, and financial exploitation. More than 1 million people are expected to fall victim to elder abuse this year. That number is expected to rise because abusers are rarely reported and punished.

Financial exploitation of older individuals can take many forms. The most obvious example is the simple confiscation of an elderly person’s property. Abuse also occurs when someone deliberately fails to repay money borrowed from an older individual, or when an older individual is pressured into selling his or her property for less than fair market value. Identity theft and forgery also are common examples of financial elder abuse. Older individuals may be influenced to pursue investments with little or no return or to purchase unnecessary products or services.  

Who are the abusers? Older individuals are often targeted by family members, friends, neighbors, health care providers or relative strangers who feel entitled to the older individual’s property or who suffer from substance abuse, gambling addiction or financial problems. There are also some financial advisers, telemarketers and door-to-door salesmen who engage in this type of elder abuse.

What You Can Do To Prevent Abuse

There is often a delicate balance between maintaining an older individual’s sense of independence and protecting him or her from financial exploitation. Keeping that balance in mind, here are a few suggestions.

Above all else, maintain frequent contact with your elderly relatives. Be a good listener: Does your relative frequently mention new trusted friends or caregivers that you have not met? Does he or she appear confused or paranoid about finances? Advise your relative to avoid giving personal information over the phone, to subscribe to national and state do-not-call registries, to keep important documents and identification in a safe place and to shred all financial information before discarding it. Encourage your relative to come to you with questions or concerns about finances.

Be alert and pay attention to your relative’s surroundings. Are there items missing from his or her home? Unpaid bills on the kitchen counter? Does he or she appear unkempt? You should also periodically review his or her estate planning and titling documents and make note of any recent changes. Similarly, any sudden change in your  relative’s financial condition should also raise a red flag. Look for unusual activity on his or her accounts and gently ask your relative about unusual withdrawals, unknown transactions or the addition of names to signature cards.

Finally, reach out to trusted family members and take a team approach to protect your older relatives from financial exploitation. Keep an open dialogue about any suspicious activity or behavior.

What You Can Do If You Suspect Foul Play

In the event you suspect your relative is presently or has been a victim of financial elder abuse, there are several steps you may take to address the situation. You may report the suspected abuse directly to the Michigan Department of Human Services Adult Protective Services Division by calling 1.800.996.6228. More information may be found at Several remedies are available, including prosecution under Michigan’s “vulnerable adult statute.” This statute prohibits a person from taking advantage of an elderly adult when that person should have reason to believe the adult needs supervision or assistance to live independently. Conviction under this misdemeanor can result in fines and, in some cases, imprisonment.

If you believe your relative lacks the capacity to handle his or her finances, you may seek the appointment of a conservator to manage financial affairs. The conservator may be a family member, trusted friend or other independent person appointed by the probate court.

You may also encourage your relative, prior to incapacity, to structure his or her estate planning documents to protect from financial exploitation. For example, your relative may sign a durable power of attorney and patient advocate designation which give individuals a clearly defined set of powers over finances and health care decisions during your relative’s lifetime. Your relative may also execute a trust so that assets are owned by the trust and managed by a third-party trustee. Your relative should take care to name trusted individuals in these capacities.  

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