Elder family financial exploitation (EFFE)

When you hear the words “financial exploitation of older adults” what situations come to mind? You might think of internet scams, stranger fraud, or older adults being exploited by a corrupt employee in a care facility. Financial fraud and scams of older adults do happen and should be addressed, but there’s a much more common type of financial exploitation that also needs attention. What many don’t realize is that trusted family members are the most common perpetrators or persons responsible for financial exploitation. The vast majority of financial exploitation takes place in families, most often in a home where the older victim is living. When an older person is a victim of financial exploitation by someone in their own family it’s called “elder family financial exploitation” or “EFFE”. 

All too often EFFE is thought of as “just a private family matter, conflict or civil legal dispute about finances.” But in reality, EFFE is elder abuse and it’s not ok. EFFE is recognized as a public criminal and civil issue in most of the U.S. While there is no one agreed-upon legal definition of EFFE, it is broadly defined as “a family member using or withholding an older person’s financial assets or personal property in ways that are illegal, unauthorized, or improper.” Perpetrators are illegally putting their own self-interests ahead of the older person’s best interest and acting without permission. Defining, recognizing, and proving EFFE can be complicated, but doing so is essential to protect the financial health and quality of life of older adults. 

EFFE exploitation strategies come in many shapes and sizes, from the very subtle to the quite obvious. Directly stealing property or financial assets, manipulation, coercion, undue influence, and misusing a financial power of attorney, are potential exploitation strategies. Strategies may change over time, start and stop, making it more challenging to detect and gather evidence of exploitation. 

Here’s one example of a reported EFFE case:

 An 82-year-old man suffered two strokes and was confined to a wheelchair. After his wife passed away, he needed help and asked his daughter to move in with him. The daughter isolated her father, then manipulated and coerced him to gain complete access and control over his finances. When the older father sought help, he believed he should have $80,000 in savings, but only $300 remained in his bank accounts. Bank records revealed that his daughter had used his money for her personal use, opened and charged thousands of credit cards in his name, and purchased a new car titled in her name—adding up to over $150,000.

Another EFFE case happened this way: 

When Susan was recently helping her mother with bill paying, she noticed $50,000 checks made out to each of her two brothers. In addition, her mom mentioned the brothers had her sign papers to update her will and name each as co-financial power of attorney. Susan’s mom wasn’t sure what the documents really meant but said that she trusted her sons. Evidence determined Susan’s brothers were working together to drain their parents' fairly significant assets. The brothers claimed they were “just taking their inheritance now versus later," despite knowing their mother had expensive long term health care needs. As Susan explained, “never in a million years would I suspect this would happen in my family. We weren’t raised this way. I thought we had a family that would put mom's and dad’s needs first, and found instead, some family members put their own needs first.”

Financial abuse knows no boundaries, it impacts all types of older adults, regardless of how much money they have, gender, marital status or cultural background. Keep in mind that EFFE is not always limited to one older victim in the family. Both older parents may be victimized, continuing with the surviving spouse/partner as the primary victim in widowhood.

Data from reported cases suggest three key factors may increase an older adult’s EFFE risk. First, a history of stressful events, such as widowhood or experiencing any type of abuse. Second, is a need for help with activities of daily living to remain independent. Third, is a lack of social service connection and being isolated from family and friends. 

People guilty of exploiting older family members range in age, gender, marital status and employment status. Perpetrators are simply not all alike. They are often stereotyped as an adult who is living with and financially dependent on their parents. But the perpetrator could just as easily be an adult child with a high-profile job in the community.

Along with adult children, perpetrators may include a victim’s partner or spouse. They may also include extended family members such as in-laws or grandchildren. It’s also common for multiple family members to work together. For example, perpetrators can include a victim’s adult child, an in-law, and a grandchild—involving multiple generations within the family as perpetrators.

In some EFFE cases, perpetrators appear to come “out of the blue” shocking other family members who never suspected them. It is more common, however, for perpetrators to have multiple interwoven problem behaviors offering “red flag” warnings. Three behaviors have consistently been identified for all types of elder abuse offenders, including EFFE. These include mental health problems, dependence on the victim (financially or for housing), and substance abuse or misuse problems. Another red flag for potential EFFE perpetrators is a family member with a strong sense of entitlement, that is, feeling that they have a right to, or are deserving, of a parent’s assets or property. For example, an adult child may assume receiving an inheritance is a right. In fact, older adults have the right to use their assets for their own needs while living and to distribute their assets as they wish after death. In some EFFE cases, family members may justify exploitation as a deserved reward for providing care for an older parent. These “red flag” concerns clearly do not always lead to EFFE, but can be important cautions and alerts. Overall, perpetrators can be pros at hiding their actions, manipulating, bullying and deception.

EFFE can have a devastating impact on the financial security and well-being of older victims. Because so much of EFFE is unreported and hard to trace, the actual financial costs remain a mystery. What’s known suggests a financial impact on older adults from less than $25,000 to millions of dollars and loss of meaningful personal property. EFFE can also lead to negative impacts on the victim’s physical and mental health. Victims may experience poverty, reduced quality of life, and fewer options for care and housing.

The consequences and costs of EFFE go well beyond the older victim. Families are never the same after experiencing EFFE. EFFE can forever change parent/child and sibling relationships, and overall family functioning. When EFFE is uncovered, it can involve “taking sides” and “cutting off” family members. The stress involved in seeing an aging parent suffer and living with broken family ties can have major long-term consequences on the health and well-being of non-abusing family members. Costly ripple effects of EFFE continue to local communities and society.

The prevalence and consequences of EFFE are too costly to ignore.