How Your Estate Plan Can Help Prevent Elder Exploitation

Elder exploitation is a particularly pernicious form of fraud and deceit against some of the most vulnerable people in society.

You may have heard stories of elderly people losing their life savings and, unfortunately, this happens more than most people realize.

What makes it worse is that much of the exploitation is not by anonymous scam artists but is often perpetrated by people who are closest to the victim – friends or family members.

Did you know that there are steps you can take when creating your estate planning to reduce the chances of elder exploitation happening to you or a loved one?

Elder financial exploitation in Florida

Florida is well-known for its population of retirees. We welcome seniors of all backgrounds to the Sunshine State and almost 20 percent of our population is 65 and older. That’s the highest in the country.

It is not surprising, therefore, that cases of elder exploitation in Florida are also amongst the highest in the country. It generally takes one of two forms:

  • Fraudulent, illegal or unauthorized actions where a senior’s resources are used for personal profit or gain, or
  • Actions that deprive a senior of benefits, belongings or assets to which they are entitled.

Most commonly in Florida, the perpetrator is a caregiver, fiduciary, or other individual entrusted to look after the elderly person – including friends and family members.

To establish that an elder has been subject to exploitation it must be proven that:

  • The victim was a vulnerable adult
  • The defendant wrongfully appropriated the victim’s property, and
  • The defendant knew or should have known of the wrongful nature of the conduct

Often, the cognitive impairment of an elderly individual diminishes their ability to detect fraud and scams and makes them more prone to exploitation.

Typical examples of elder exploitation

Some common examples of elder exploitation in Florida include:

  • Direct theft of money or property in an aged care facility or by an in-home caregiver
  • Exploitation by an agent under a power of attorney
  • People selling fraudulent schemes (scams) over the telephone or the Internet
  • People impersonating someone (e.g., tax collectors) to claim from an elderly victim
  • A family member exerting undue pressure on a senior to include them in a will
  • Forgery of an elder’s estate planning documents

Unfortunately, the growing popularity of Internet-based finance has only increased the risk of scams against the elderly.

How can estate planning protect against elder exploitation?

Estate planning is not just about distributing assets after your death.

A comprehensive estate plan should include important decisions about what happens later in life – planning for your aged care needs and what happens if you become incapacitated, for instance.

Preparing for your own incapacity is one of the best ways to protect against being exploited when you age.

Here are three ways in particular that your estate plan can protect you:

1.Set up a revocable living trust

A trustee (and, optionally, a co-trustee) is appointed to manage and protect assets, which are “owned” by the trust rather than you. This makes it very difficult for unauthorized individuals to access these assets as opposed to those in your name.

Another benefit of trusts is that they can avoid probate and guardianship proceedings.

2.Create a durable power of attorney

This document allows you to nominate a trusted person to help make your financial and legal decisions either before you lose mental capacity or as soon as it happens.

This can prevent another individual from exploiting your incapacity as you may no longer have the authorization to sign financial documents once a durable power of attorney is activated.

3.Include a designation of pre-need guardian

Another useful step to protect against exploitation is by creating a designation of pre-need guardian.

This allows you to pre-nominate an individual as a guardian if you are exploited or are rendered incapable of making decisions yourself.

This provision can be included in a durable power of attorney.

How to minimize the risk of exploitation

To minimize the risk of exploitation, consider the following before appointing individuals to act on your behalf and represent you.

  • Can you really trust them? How long have you known them and have you trusted them with financial matters before?
  • Do they know your wishes and preferences?
  • Would it best to have your power of attorney report to another person on financial transactions, for oversight?
  • Who do you need to inform about your trust or power of attorney? Which family members need to know and which financial institutions or financial advisers could it affect?
  • Do you know the correct procedures to follow to enable a power of attorney to interact with financial institutions? What are their policies and procedures?
  • Have you reviewed your power of attorney, trust agreements, and other estate planning documents to ensure they still reflect your wishes and still pass decision-making responsibilities on to those you trust most?
  • Do you need to revoke or amend a document? (If so, make sure that you do this in a legally enforceable way)
  • If you have revoked an agreement, have you informed the necessary financial institutions?
  • Have you appointed a professional caregiver or paid helper as an agent under a power of attorney? This might be a red flag and you may want to review this.
  • Is someone offering to help you out with making financial decisions? This could be another red flag.

Protect against elder exploitation

Because of our high percentage of elderly residents in Florida, we see more cases of elder exploitation than much of the country.

It also means we’re experienced in protecting against exploitation through careful and comprehensive estate planning.

Remember, elder exploitation cases can be difficult to prosecute. We believe that prevention is better than cure.

Call The Law Offices of Hoyt and Bryan, LLC if you need assistance in protecting you and your loved ones against elder exploitation: (407) 977-8080.

Peggy R. Hoyt - The Law Offices Of Hoyt & Bryan
About the Author: Peggy Hoyt
Peggy R. Hoyt practices in the areas of family wealth and legacy counselling, including trust and estate planning and administration, elder law, small business creation, succession and exit planning, real estate transactions and animal law.