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The New York Times recently published an article concerning financial abuse of the elderly.  The article provides several disturbing scenarios concerning financial exploitation of the elderly and points out warning signs that are often missed. Links from the Consumer Financial Protection Bureau to help spot financial exploitation before it happens are also included in the article.

What the article does not include, however, is whether or not concerned relatives should consult with an attorney regarding financial exploitation of an elderly family member. A qualified Elder Law Attorney may assist in helping to prevent financial exploitation before it happens.  A good Elder Law Attorney may also aid in recovery of funds in the event financial exploitation has occurred.

It is self-evident that the best way to avoid financial exploitation is to stop it before it starts. To that end, consulting with a qualified Elder Law Attorney can be valuable and cost effective. A good Elder Law Attorney can discuss strategies to avoid financial exploitation (Trusts, correct titling of bank accounts and brokerage accounts, proper role and use of a power of attorney, correct disclosures, etc.) and can also properly advise parents and children regarding their roles, rights, and responsibilities. For example, preventing financial exploitation may be as simple as explaining the nature of a fiduciary relationship to a son or daughter and making sure the child understands they must act in their parent’s best interest instead of their own interest.   A son holding a Power of Attorney for a mother generally cannot use the mother’s assets to pay for his expenses.  A discussion with family members on the issue of separate fiduciary accounts to ensure that a parent’s funds are not used for a child’s expenses may also be helpful.

Likewise, a fiduciary must prove they have done their job correctly (this is a shift from the usual burden of proof that requires a plaintiff to show that the defendant has done something wrong). This also
means that a fiduciary must keep accurate records and must always act for the benefit of the party whose funds they are managing. Meeting with an attorney and having the attorney advise all of the family
members of each party’s proper role, including the correct recordkeeping and appropriate disclosures, may prevent financial exploitation before it happens. In other words, an ounce of prevention is worth a pound of cure.

Similarly, an attorney may give timely advice regarding filing a civil lawsuit in order to recover assets that have been taken. Too often, someone who has been exploited moves too slowly or too late and may not be able to recover any of their assets in a lawsuit.. A fiduciary (someone who has a power of attorney or a Trustee) exploiting the older person may have spent all of the money that they have taken and it may appear impossible to recover any assets. Consulting with an attorney may increase the chances of not only getting a judgment against a thieving fiduciary or caregiver, but also collecting on that judgment. Bank accounts can be frozen, real property may be liened, and sums may be recovered if the attorney is able to move quickly once the exploitation has been discovered.

Financial exploitation is becoming more and more prevalent as America ages. Consulting with an attorney may not only prevent the exploitation before it occurs, but may also increase the chances of recovery in the event an elderly parent has been exploited by a fiduciary, power of attorney, caregiver, family member, trustee, or predator.

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