Damned if you do, damned if you don’t: Planning for the future and how to avoid financial threats from outside parties and from the people you know

By, Harlin Oh, Elder & Disability Law Clinic Student, Fall 2022

Every year, over 10% of those aged 65 and older will experience some form of elder abuse.[1] That means up to five million older Americans are abused each year.[2] Elder abuse comes in many forms including, financial fraud and exploitation, caregiver neglect, psychological abuse, physical abuse, and sexual abuse. Among these, the most prevalent type of abuse is financial fraud and exploitation, estimating an annual loss of $36.5 billion by victims of financial abuse.[3] These already staggering numbers are expected to grow as older Americans are projected to outnumber children by 2035.[4] This dramatic rise of financial crimes has raised concern over whether agencies, like the Adult Protective Services in states like Virginia, are prepared.[5] Given the increasing number of reports, it is important that older individuals take proactive measures to prevent becoming a victim of financial fraud and exploitation.

Fraudsters deploy various schemes to target their elderly victims. Common schemes include romance, technology support, grandparent, charity, sweepstakes and government impersonation scams.[6] Generally in these scams, perpetrators manipulate elderly targets to give up personal information and accounts by falsely posing as relatives, government employees, romantic partners, charitable organizations, or health care providers.[7] Because these scams are typically conducted through the computer, phone, and mail, and through the TV and radio, one might suspect that most financial crimes against the elderly are committed by strangers. However, known associates (including caregivers and relatives) are just as likely to financially exploit elderly individuals when looking at financial crimes as a whole.[8]

Unlike fraud perpetrated by strangers, which concocts an illusion of trust for elderly targets through predatory and deceptive means, financial exploitation is typically perpetrated by relatives, longtime friends, neighbors, and caregivers. Many of these exploiters live with or nearby their victims.[9] Financial exploitation is the illegal, unauthorized, or improper use of an elderly individual’s funds, resources, property or other assets by a caregiver or other person in a trust (or fiduciary) relationship, for the benefit of someone other than the elderly individual.[10] In such cases of financial exploitation, family members and trusted individuals often already have access to the elders’ accounts and/or the legal and financial authority to act on behalf of their victims.[11] Therefore, these exploiters already hold a position of trust but abuse their preexisting relationship with the elderly individual.[12]

Even though financial fraud and exploitation sometimes overlap with each other and with other forms of elder abuse, and reports of financial exploitation by someone the elderly person knows or trusts are handled by the local and state Adult Protective Services agencies.[13] For example, APS agencies will respond to cases where agents use the power of attorney to benefit themselves; caregivers and other helpers access sensitive information to steal the senior’s cash, property, or identity; or relatives use pressure or threats to induce changes to titles or beneficiaries of certain assets.[14]

In a world where fraudsters and exploiters are lurking around every corner—from nursing homes and hospitals to the next phone call or even the house next door—what can older adults do to protect themselves from financial abuses by both strangers and those closer to home? The consensus across advocacy groups and government authorities is that creating an estate plan and consulting a financial advisor are the top ways to prevent financial exploitation. Admittedly, creating an estate plan might seem just as daunting as not having one at all, especially when it requires seniors to make advance decisions about their future financial, legal, health management, and to assign someone to make those good on their wishes.

Nevertheless, estate-planning instruments, such as a power of attorney, a living will, trusts, advance directives, and a last will and testament significantly help prevent abuses and impropriety because they express the elderly person’s wishes related to her care and estate and require caretakers and assigned representatives to adhere to these wishes when making decisions on her behalf. Additionally, careful estate planning allows elderly individuals and their families to bypass the guardianship and conservatorship process. Guardianship and conservatorship require elderly individuals to give up significant rights, so it is considered a last resort used only when other less restrictive options are unavailable.[15] Even though these estate-planning documents are useful tools to protect elders, some decision-making authority, in the wrong hands or of the improper type, could harm the elderly person if seniors do not give enough thought to who they entrust as a fiduciary, what powers are assigned to their representatives, or how and when decisions are made on their behalf. For starters, seniors should only assign fiduciary roles to individuals they trust with absolute confidence. Seniors should also consider important financial, health, legal, and other life decisions that they would and would not agree to and have those wishes expressed in the appropriate legal documents. Estate planning can be a delicate process. Even if certain scenarios in the future seem unlikely or all too distant to consider now, planning for as much of the future today while the elderly person is still able to make decisions will ensure they are better protected and cared for when they are no longer able to make decisions alone.

Beyond estate planning, seniors can further prevent financial exploitation by taking additional steps provided by the U.S. Administration on Community Living’s brochure “Protecting Your Pocket Book: Tips to Avoid Financial Exploitation.”[16] Such additional steps include building a strong support network, protecting personal and sensitive information through safe storage and disposal, never disclosing personal information over the phone or computer, and staying engaged with resources and communities for older adults.

[1] U.S. Department of Justice, Report, Elder Abuse Statistics, (last accessed Mar. 20, 2022) (finding figure represents some older adults who are simultaneously experiencing more than one type of abuse).

[2] National Council on Aging, Get the Facts on Elder Abuse, (Feb. 23, 2021)

[3] National Council on Aging, Get the Facts on Elder Abuse, (Feb. 23, 2021)

[4] Williamm H. Frey, What the 2020 census will reveal about America: Stagnating growth, an aging population, and youthful diversity, Brookings, (Jan. 11, 2021); Jonathan Vespa, The U.S. Joins Other Countries With Large Aging Population, Census, (Oct. 8, 2019),add%20a%20half%20million%20centenarians.

[5] Katie O’Connor, Elder Abuse and Neglect are on the Rise. Is Virginia Prepared?, Virginia Mercury, (Mar. 17, 2019),Services’%20Adult%20Protective%20Services%20Division (finding that financial exploitation increased by 30% between 2017 and 2018).

[6] Federal Bureau of Investigations, Scams and Safety, Elder Fraud, (last accessed Mar. 20, 2022).

[7] Id.

[8] Marguerite DeLiema, Elder Fraud and Financial Exploitation: Application of Routine Activity Theory, 58 Gerontologist 706-718, (Mar. 10, 2017); National Center on Elder Abuse, What We Do, Research Statistics and Data, (last accessed Mar. 20, 2022). Ron Acierno et. al, National Elder Mistreatment Study, National Institute of Justice, (Mar. 2009)

[9] Supra, note 8; Kelly Dedel Johnson, Financial Crimes Against the Elderly, NC 201915 (Sept. 2003)

[10] Supra, note 8; VA Code Ann. § 63.2-1603; Center for Disease Control and Prevention, Elder Abuse: Fast Facts, (last accessed Mar. 20, 2022).

[11] Id.

[12] Id.

[13] Supra, note 1.

[14] Supra, note 1.

[15] Working interdisciplinary Network of Guardianship Stakeholders, Resources, Options in Virginia to Help Another Person Make Decisions: Choices Less Restrictive than Guardianship and Conservatorship, (last accessed Mar. 20, 2022).

[16] U.S. Administration on Community Living, Brochure, Protecting Your Pocket Book: Tips to Avoid Financial Exploitation, (last accessed Mar. 20, 2022).