Stop­ping fi­nan­cial el­der abuse

Many take ad­van­tage of se­niors, and the ma­jor­ity of cases in­volve peo­ple who are close to them


El­der abuse ex­pert Lynn McDon­ald rou­tinely fields calls con­cern­ing fi­nan­cial ex­ploita­tion, but none more dra­matic than a re­cent in­ci­dent in­volv­ing a woman in Saskatchewan who was nearly bankrupted by one of her own adult chil­dren as she un­der­went hip re­place­ment surgery.

“The daugh­ter con­vinced the mother to sign over ev­ery­thing to her while she was sick in hos­pi­tal and then she’d get it back af­ter she came out,” says McDon­ald, di­rec­tor of the In­sti­tute for Hu­man De­vel­op­ment, Life Course and Ag­ing at the Univer­sity of Toronto.

“But she sold the mother’s house right un­der her and took all her pos­ses­sions. When the dis­charge went through, the mother came out of hos­pi­tal with noth­ing but a pen­sion.”

McDon­ald says 2.6 per cent of Canada’s grow­ing pop­u­la­tion of res­i­dents 55 years of age and older are fi­nan­cially abused, mak­ing it the se­cond-most com­mon form of el­der abuse.

She says it’s crit­i­cal for se­niors to un­der­stand how to pro­tect them­selves from fi­nan­cial abuse given that the ma­jor­ity of cases will in­volve peo­ple who are close to them.

Laura Watts, a Toronto lawyer who fo­cuses on el­der law is­sues, says the pro­to­typ­i­cal “un­suc­cess­ful son in the base­ment” ac­counts for about 75 per cent of el­der fi­nan­cial abuse cases per­pe­trated by fam­ily mem­bers.

“Of­ten this per­son may have some type of de­pen­dency or some kind of al­co­hol prob­lem or fail­ure to launch,” she says. “They’ll start iso­lat­ing the mom or older per­son and start cut­ting off so­cial re­la­tion­ships.”

It’s at that point that the adult child may pres­sure their el­derly par­ent to sign a power of at­tor­ney or put as­sets into joint ac­counts.

While Watts notes that lots of peo­ple will have good ex­pe­ri­ences with such fi­nan­cial ar­range­ments, that doesn’t mean they should au­to­mat­i­cally se­lect one of their chil­dren when they’re go­ing through a plan­ning process. “There’s a lot that goes into it and you could be ask­ing that per­son to make de­ci­sions for you for up to 20 or 30 years,” she says.

“If you’re a per­son, for in­stance, that’s 70 years old who gets de­men­tia and cog­ni­tive im­pair­ment, you may live un­til 90 or 95, so it could be a very long-term job.”

Pick­ing some­one with bud­get­ing acu­men and who isn’t in fi­nan­cial stress them­selves is crit­i­cal.

“You should al­ways pick some­one who doesn’t need money,” Watts says. “It’s very easy to slide your hand into that cookie jar.”

Fi­nan­cial ar­range­ments can also be made at arm’s length through a trust com­pany, which can pro­vide ad­di­tional ac­cess to ser­vices in­clud­ing tax prepa­ra­tion, in­vest­ment man­age­ment, bank­ing ser­vices and more.

“That makes things very safe,” Watts says. “They will take a per­cent­age, which is small, but what you’re buy­ing is com­fort and safety that some­thing would be done to a fidu­ciary standard.”

Older peo­ple who al­ready have fi­nan­cial ar­range­ments in place with a fam­ily mem­ber or ac­quain­tance should also be vig­i­lant for red flags such as new bills sud­denly be­ing paid or an in­or­di­nate or un­usual num­ber of fi­nan­cial trans­ac­tions, says Leanne Kauf­man, head of RBC es­tate and trust ser­vices.

“Watch for changes in fi­nan­cial spend­ing pat­terns or the types of places where money is spent,” she says. “Also bear in mind that this doesn’t just af­fect the ul­tra-wealthy. Ev­ery­one who is po­ten­tially vul­ner­a­ble to el­der abuse is po­ten­tially at risk for fi­nan­cial abuse.”


2.6 per cent of Canada’s grow­ing se­nior pop­u­la­tion is fi­nan­cially abused, el­der abuse ex­pert Lynn McDon­ald says.

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