As the elderly population increases, it is becoming more common for adult children to step in to help with financial decisions. The children may find themselves being in charge of a parent’s finances if they have a cognitive impairment or some form of health issue. Unfortunately, this can sometimes lead to the adult exerting undue influence over the older person’s life, resulting in unethical abuse of their finances.

Warning Signs of Financial Exploitation of Older Adults

To prevent further financial or emotional harm, look for warning signs. One red flag is lack of access to or communication with your older parent. Do you feel like the family caregiver is avoiding you or discouraging you from visiting? Then it is time to do some more digging.

Look for these other warning signs of financial abuse:

• Names added to a parent's bank account
• Changes to pay-on-death beneficiary designations
• Debit card usage at retail stores and restaurants when mom or dad are primarily homebound
• Unauthorized withdrawal of funds using ATM cards or sudden transfers of cash
• Missing jewelry or other (especially portable) valuables
• Financial needs unmet despite having the financial resources to cover them
• Checks signed at a time your parent was physically or mentally unable to write them
• Expensive “gifts” to the caregiver
• Unannounced changes to an established estate plan

What Can You Do if a Family Member Is Taking Advantage of Elderly Parents?

Don’t overlook the warning signs of financial abuse just because a family member is involved. Avoiding conflict now will be of little consolation later if mom’s or dad’s resources are depleted and you find yourself in a dire situation. Your parents worked hard to save for their retirement. Help them protect their resources and avoid the stress of financial instability late in life.

Consider these steps to protect your loved one:

1. Get legal advice. The first step is to know your rights. Talk to an attorney who specializes in probate law and guardianship. They will help you understand your options and the evidence you will need to collect if you suspect financial abuse.
2. Collect documentation. Before you take legal steps or confront family members, obtain evidence of financial mishandling or other abuse.
3. Have a family meeting. Explain the financial situation and reassure family members in a non-confrontational way that your goal is transparency and to create the best possible environment for your parent. If you cannot come to a voluntary agreement, there are further steps to pursue.
4. Consider durable or financial power of attorney. A durable or financial power of attorney is generally used to make plans for the care of the finances, investments, and property of an individual (called the principal) in the event the principal is no longer able to handle their financial affairs. It applies only to financial matters and can be helpful to older adults who want and need a trusted person to act on their behalf.
5. Consider medical power of attorney. A medical power of attorney is a legal document that allows the principal to designate a trusted adult to make certain health care decisions for the principal. Medical power of attorney usually only takes effect when the principal is unable to make their own health care decisions and this is certified in writing by the principal’s physician.
6. Petition for guardianship. You can petition the Courts to become your parent’s guardian. To succeed, you will need the assistance of a guardianship attorney. You will also need to prove that your parent is no longer capable of handling their affairs due to intellectual or medical incapacity, and you will need to demonstrate that you are the best person to serve as guardian. Because guardianship affects a person’s legal rights, you should first look at other and less restrictive options to protect your parent or loved one. An attorney can advise you on all available options.

Reporting Financial Elder Abuse

If you suspect that your loved one is experiencing financial abuse and are unable to prove it or stop it, contact your local law enforcement immediately. In Texas, elder abuse is investigated by Adult Protective Services (APS), a program of the Texas Department of Family and Protective Services.

APS investigates abuse, neglect, and exploitation of adults who are elderly or have disabilities and who live in the community. Per their website, “any adult who has a disability or who is age 65 or older that is in a state of abuse, neglect, or exploitation may be eligible to receive adult protective services.”

Anyone who suspects abuse, neglect, or exploitation should report it to the Texas Abuse Hotline at 1-800-252-5400 or online at TxAbuseHotline.org.

Is Skimming From Mom’s Bank Account “Financial Abuse”?

Perhaps you feel that your sister has some prerogative to help herself from mom’s account – after all, she is sacrificing a lot to care for mom – but remember that, in the eyes of the law, if it’s not their money, it’s a crime.

Unfortunately, skimming from mom’s bank account is just one way that siblings, caregivers, or family friends can take advantage of older adults. Elders are exposed and vulnerable to financial abuse in a variety of ways.

People may take financial advantage of their parents or older family members by doing the following:

• Withdrawing funds from the victim’s bank account without their permission
• Taking money or valuable items from the victim’s home
• Using the victim’s information to sign up for credit cards or subscription services
• Making changes to the victim’s financial documents or wills
• Using coercion and abuse tactics on the victim in order to sign over Power of Attorney duties
• Forging the victim’s signature on financial documents