Elder Family Financial Exploitation, or EFFE for short, is one of the most prevalent types of elder abuse. EFFE takes place in the context of family relationships when a family member illegally, improperly, or without permission, uses or withholds an older adult’s funds, property, or assets. EFFE is all too common, but there are ways older adults and their family members can protect themselves. Here are six protective strategies to include in your game plan.
“If only my dad had gotten his legal documents (financial power of attorney and health care directive) in place . ..his dementia was too far along and he couldn’t legally understand the consequences anymore. We ended up experiencing EFFE and a court appointed guardian." — Adult daughter of dad
Millions of older adults and their families are experiencing EFFE around the world. Remember that EFFE is elder abuse and it’s not ok.
Six strategies to prevent EFFE
Being secretive about money and financial issues can increase the risk of EFFE. Being able to bring up and talk about EFFE with family members will increase awareness of the problem and the ability to recognize if it happens. Proactive conversations can reinforce that EFFE is illegal, inappropriate and not ok in your family. Conversations about EFFE are important for family members across the generations as potential EFFE victims and perpetrators. While older parents and adult children especially need to talk, in-laws, older grandchildren and others should be included as appropriate.
There is no doubt that conversations about EFFE may be sensitive and difficult to bring up and talk about—especially between aging parents and adult children/siblings. Be prepared to share your motives for raising EFFE as an issue. Clearly stating your motives can to help reduce mistaken assumptions, fears and concerns such as being greedy, out for own self-interest, disrespectful, or just raising old sibling rivalries. Most adult children simply want to understand their parent’s wishes to protect their parents’ financial security. Be prepared to counter denial, avoidance, “it won’t happen in our family”, and we “don’t have enough money” to worry about EFFE as reasons to avoid the topic. Conversations about EFFE, financial security and money can increase transparency and accountability among family members. Older parents, adult siblings, and other family members may actually feel relieved and much less at risk when EFFE discussions take place.
If you are an older adult, keep in touch with trusted family members, friends and stay active in your community. Being isolated is a key risk factor for EFFE. Having a social support network you interact with and share concerns with frequently can be a critical safety net if and when changes in health and independence.
If you are a family member of an older adult, find meaningful ways to be present and involved in your older parent’s life. Don’t let physical or emotional distance keep you from knowing what’s really going on day-to-day. Observing and participating in daily activities, including money management, can provide valuable insights. Adult children too often make incorrect assumptions about a parent’s financial decision-making capacity, physical, mental or financial health. Recognizing and accepting changes in a parent’s decision making capacity or ability to be safe and independent can be easy to deny.
Also listen to what an older adult says, directly and in passing, about their financial concerns or the behaviors of other family members. Don’t dismiss comments such as “I’m worried I don’t have enough money, my account balance isn’t right, ya know your niece is always asking for money” as just being forgetful, paranoid and not serious.
At the heart of EFFE can be different perceptions of what a “fair” use of an older parent’s financial assets and property should mean. Having honest conversations can quickly reveal the differing beliefs within your family.
Begin by understanding and respecting an older parent’s wishes for a “fair” use of their financial assets and property; both while they are living and after death. It is the property owner’s right to be in control and make decisions as long as they have the decision making capacity to do so. The more that family members understand an older adult’s expectations, obligations, and any fears and concerns, the more accountability is possible within the family.
Having conversations about what “fair” means can help to uncover unspoken rules and assumptions in the family about who should benefit from an older parents resources. Different perceptions about what fair means among family members are normal and should be expected. Should an older parents limited resources be used to ensure their quality of life and care, to reward a family caregiver, support needy adult children or grandchildren, or should assets be saved to leave an inheritance to family members after death? What are the priorities? Do you know if family members have a sense of entitlement or a long history of receiving an older parent’s resources? A sense of entitlement can be used to justify and defend financial exploitation. Determining what’s “fair” and “unfair” in a family can reveal if there is shared meaning and priorities. Fairness conversations can also help to reveal potential conflicts, motives and beliefs that could lead to EFFE.
Older adults often experience transitions in life that can offer “windows of opportunity” for financial exploitation. These windows of opportunity can increase the risk of EFFE, especially when combined with a motivated abuser; or a family member who can justify or rationalize their abusive behaviors. Planning ahead before these transitions can help protect an older adult’s financial security and money management from EFFE.
First, the loss of a spouse or partner can be a major life transition. Widowhood can increase dependence, depression and isolation and require major financial and resource decisions.
Changes in financial decision making and money management capacity represent another life transition. An older adult’s physical and mental health, especially dementia and memory issues, can put an older adult at risk of not understanding financial choices, decision consequences or being able to communicate their own wishes. Changes in financial decision making capacity can occur gradually over time; or suddenly due to a stroke, illness, or accident. Incapacity can open the door for family members to control, manipulate, and exert power over financial decisions.
Third, the need for a caregiver can increase an older adult’s dependence on others and isolation. When serving as a caregiver, some family members may misuse the older adult’s finances to serve their own best interests.
And fourth, the transition of downsizing can create a window of opportunity for EFFE. Preparing for one’s death and the transfer of a lifetime of accumulated money and possessions present opportunities for manipulation, coercion and acting on feelings of entitlement.
While some adults may prefer informal money management and estate planning within their family, this can lead to conflicts and court battles, opening the door for unchecked financial exploitation. Documenting an older person’s preferences and wishes regarding the use, management and protection of their financial assets and personal property while living and after death is critical. Working with experienced legal and financial professionals to prepare personally tailored advance planning documents (such as a financial power of attorney, health care directive, will, or trust) can help to ensure a person’s wishes are known and followed. Advance planning legal documents are accepted in all 50 U.S. states, but the rules and requirements differ from state to state.
It’s also important to make careful decisions about who should manage an older person’s money or property on their behalf if needed. For example, a financial power of attorney gives permission for another person (s) to conduct financial business on someone else’s behalf. The “attorney-in-fact” serves as a fiduciary, responsible for acting only in the best interest of the person he or she is helping. All too often, older adults make decisions on “who” too quickly, selecting the wrong person(s) for these critical roles.
Think carefully about the personal qualities needed when selecting someone with the power and responsibility of a fiduciary. Be really honest and candid about family history and relationship dynamics between older parents/adult children, siblings and younger family members. Beware of selecting family members who have a strong sense of entitlement, are irresponsible with money or are in financially needy situations. Beware of anyone who has a history of or is coercing or bullying family members to create or change advance planning documents. The wide use of technology allows family members to serve as fiduciaries no matter where they live. Safeguards and oversight can and should be built into documents to help prevent misuse and abuse of powers that can lead to EFFE.
Agreeing to serve as a financial power of attorney/fiduciary can be a valuable and meaningful way to assist an older adult maintain their independence and protect their financial security. Serving as a financial power of attorney can be a new and unfamiliar role for many family members. There is help to learn some basics about responsibly managing someone else’s money as a financial power of attorney (see Consumer Financial Protection Bureau Money Management resources listed in “for more information” below).
If something feels off, or your gut is telling you something isn’t right, pay attention, ask questions, document any evidence, and take action as needed. It could be something an older parent or adult child says about financial assets, property or use of money; changes in behavior, how a sibling is isolating a parent; or a new vehicle an unemployed daughter and caregiver is driving. It’s often better to act early, trusting your instincts, versus hesitating and regretting it later.
Far too many EFFE older adult victims fail to recognize it as illegal, and fail to take action or report to authorities for a variety of reasons. Concerned family members can serve as advocates, helping victims interrupt and stop the abuse. Family members choosing to intervene in EFFE should be aware of the potential challenges, losses, and financial and health consequences and protect themselves in the process of helping the victim.
If you suspect or witness EFFE, seek help and support from trained professionals. If you want to talk through your suspicions and explore potential courses of action, Victim Services, will help concerned persons as well as victims. Identify appropriate supportive services in the state where the EFFE victim or concerned family member lives using the state-specific links in “for more information.” You do not have to have clear evidence of EFFE to contact appropriate authorities such as Adult Protective Services, law enforcement, financial or legal experts Don’t hesitate to call 911 if an older adult is in crisis or immediate danger.
Additional resources
Consumer Financial Protection Bureau: Managing someone else's money
Learn more about financial exploitation definitions, statutes, and protective services where you or an older parent lives.
- National Center on Elder Abuse
- U.S. Department of Justice website state statutes
- U.S. Department of Justice website state resources
- For advocacy and victim services use an internet search for the words “elder abuse victim services” and your state.
- Minnesota Elder Justice Center
- American Bar Association: Basics about Financial Power of Attorneys
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Reviewed in 2022