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Elder Mistreatment: Abuse, Neglect, and Exploitation in an Aging America (2003)

Chapter: 13 Financial Abuse of the Elderly in Domestic Settings

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Suggested Citation:"13 Financial Abuse of the Elderly in Domestic Settings." National Research Council. 2003. Elder Mistreatment: Abuse, Neglect, and Exploitation in an Aging America. Washington, DC: The National Academies Press. doi: 10.17226/10406.
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Suggested Citation:"13 Financial Abuse of the Elderly in Domestic Settings." National Research Council. 2003. Elder Mistreatment: Abuse, Neglect, and Exploitation in an Aging America. Washington, DC: The National Academies Press. doi: 10.17226/10406.
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Suggested Citation:"13 Financial Abuse of the Elderly in Domestic Settings." National Research Council. 2003. Elder Mistreatment: Abuse, Neglect, and Exploitation in an Aging America. Washington, DC: The National Academies Press. doi: 10.17226/10406.
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Suggested Citation:"13 Financial Abuse of the Elderly in Domestic Settings." National Research Council. 2003. Elder Mistreatment: Abuse, Neglect, and Exploitation in an Aging America. Washington, DC: The National Academies Press. doi: 10.17226/10406.
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Suggested Citation:"13 Financial Abuse of the Elderly in Domestic Settings." National Research Council. 2003. Elder Mistreatment: Abuse, Neglect, and Exploitation in an Aging America. Washington, DC: The National Academies Press. doi: 10.17226/10406.
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Suggested Citation:"13 Financial Abuse of the Elderly in Domestic Settings." National Research Council. 2003. Elder Mistreatment: Abuse, Neglect, and Exploitation in an Aging America. Washington, DC: The National Academies Press. doi: 10.17226/10406.
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Suggested Citation:"13 Financial Abuse of the Elderly in Domestic Settings." National Research Council. 2003. Elder Mistreatment: Abuse, Neglect, and Exploitation in an Aging America. Washington, DC: The National Academies Press. doi: 10.17226/10406.
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Suggested Citation:"13 Financial Abuse of the Elderly in Domestic Settings." National Research Council. 2003. Elder Mistreatment: Abuse, Neglect, and Exploitation in an Aging America. Washington, DC: The National Academies Press. doi: 10.17226/10406.
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Suggested Citation:"13 Financial Abuse of the Elderly in Domestic Settings." National Research Council. 2003. Elder Mistreatment: Abuse, Neglect, and Exploitation in an Aging America. Washington, DC: The National Academies Press. doi: 10.17226/10406.
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Suggested Citation:"13 Financial Abuse of the Elderly in Domestic Settings." National Research Council. 2003. Elder Mistreatment: Abuse, Neglect, and Exploitation in an Aging America. Washington, DC: The National Academies Press. doi: 10.17226/10406.
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Suggested Citation:"13 Financial Abuse of the Elderly in Domestic Settings." National Research Council. 2003. Elder Mistreatment: Abuse, Neglect, and Exploitation in an Aging America. Washington, DC: The National Academies Press. doi: 10.17226/10406.
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Suggested Citation:"13 Financial Abuse of the Elderly in Domestic Settings." National Research Council. 2003. Elder Mistreatment: Abuse, Neglect, and Exploitation in an Aging America. Washington, DC: The National Academies Press. doi: 10.17226/10406.
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Suggested Citation:"13 Financial Abuse of the Elderly in Domestic Settings." National Research Council. 2003. Elder Mistreatment: Abuse, Neglect, and Exploitation in an Aging America. Washington, DC: The National Academies Press. doi: 10.17226/10406.
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Suggested Citation:"13 Financial Abuse of the Elderly in Domestic Settings." National Research Council. 2003. Elder Mistreatment: Abuse, Neglect, and Exploitation in an Aging America. Washington, DC: The National Academies Press. doi: 10.17226/10406.
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Suggested Citation:"13 Financial Abuse of the Elderly in Domestic Settings." National Research Council. 2003. Elder Mistreatment: Abuse, Neglect, and Exploitation in an Aging America. Washington, DC: The National Academies Press. doi: 10.17226/10406.
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Suggested Citation:"13 Financial Abuse of the Elderly in Domestic Settings." National Research Council. 2003. Elder Mistreatment: Abuse, Neglect, and Exploitation in an Aging America. Washington, DC: The National Academies Press. doi: 10.17226/10406.
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Suggested Citation:"13 Financial Abuse of the Elderly in Domestic Settings." National Research Council. 2003. Elder Mistreatment: Abuse, Neglect, and Exploitation in an Aging America. Washington, DC: The National Academies Press. doi: 10.17226/10406.
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Suggested Citation:"13 Financial Abuse of the Elderly in Domestic Settings." National Research Council. 2003. Elder Mistreatment: Abuse, Neglect, and Exploitation in an Aging America. Washington, DC: The National Academies Press. doi: 10.17226/10406.
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Suggested Citation:"13 Financial Abuse of the Elderly in Domestic Settings." National Research Council. 2003. Elder Mistreatment: Abuse, Neglect, and Exploitation in an Aging America. Washington, DC: The National Academies Press. doi: 10.17226/10406.
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Suggested Citation:"13 Financial Abuse of the Elderly in Domestic Settings." National Research Council. 2003. Elder Mistreatment: Abuse, Neglect, and Exploitation in an Aging America. Washington, DC: The National Academies Press. doi: 10.17226/10406.
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Suggested Citation:"13 Financial Abuse of the Elderly in Domestic Settings." National Research Council. 2003. Elder Mistreatment: Abuse, Neglect, and Exploitation in an Aging America. Washington, DC: The National Academies Press. doi: 10.17226/10406.
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Suggested Citation:"13 Financial Abuse of the Elderly in Domestic Settings." National Research Council. 2003. Elder Mistreatment: Abuse, Neglect, and Exploitation in an Aging America. Washington, DC: The National Academies Press. doi: 10.17226/10406.
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Suggested Citation:"13 Financial Abuse of the Elderly in Domestic Settings." National Research Council. 2003. Elder Mistreatment: Abuse, Neglect, and Exploitation in an Aging America. Washington, DC: The National Academies Press. doi: 10.17226/10406.
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Suggested Citation:"13 Financial Abuse of the Elderly in Domestic Settings." National Research Council. 2003. Elder Mistreatment: Abuse, Neglect, and Exploitation in an Aging America. Washington, DC: The National Academies Press. doi: 10.17226/10406.
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Suggested Citation:"13 Financial Abuse of the Elderly in Domestic Settings." National Research Council. 2003. Elder Mistreatment: Abuse, Neglect, and Exploitation in an Aging America. Washington, DC: The National Academies Press. doi: 10.17226/10406.
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Suggested Citation:"13 Financial Abuse of the Elderly in Domestic Settings." National Research Council. 2003. Elder Mistreatment: Abuse, Neglect, and Exploitation in an Aging America. Washington, DC: The National Academies Press. doi: 10.17226/10406.
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Suggested Citation:"13 Financial Abuse of the Elderly in Domestic Settings." National Research Council. 2003. Elder Mistreatment: Abuse, Neglect, and Exploitation in an Aging America. Washington, DC: The National Academies Press. doi: 10.17226/10406.
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Suggested Citation:"13 Financial Abuse of the Elderly in Domestic Settings." National Research Council. 2003. Elder Mistreatment: Abuse, Neglect, and Exploitation in an Aging America. Washington, DC: The National Academies Press. doi: 10.17226/10406.
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Suggested Citation:"13 Financial Abuse of the Elderly in Domestic Settings." National Research Council. 2003. Elder Mistreatment: Abuse, Neglect, and Exploitation in an Aging America. Washington, DC: The National Academies Press. doi: 10.17226/10406.
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Suggested Citation:"13 Financial Abuse of the Elderly in Domestic Settings." National Research Council. 2003. Elder Mistreatment: Abuse, Neglect, and Exploitation in an Aging America. Washington, DC: The National Academies Press. doi: 10.17226/10406.
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Suggested Citation:"13 Financial Abuse of the Elderly in Domestic Settings." National Research Council. 2003. Elder Mistreatment: Abuse, Neglect, and Exploitation in an Aging America. Washington, DC: The National Academies Press. doi: 10.17226/10406.
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Suggested Citation:"13 Financial Abuse of the Elderly in Domestic Settings." National Research Council. 2003. Elder Mistreatment: Abuse, Neglect, and Exploitation in an Aging America. Washington, DC: The National Academies Press. doi: 10.17226/10406.
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Suggested Citation:"13 Financial Abuse of the Elderly in Domestic Settings." National Research Council. 2003. Elder Mistreatment: Abuse, Neglect, and Exploitation in an Aging America. Washington, DC: The National Academies Press. doi: 10.17226/10406.
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Suggested Citation:"13 Financial Abuse of the Elderly in Domestic Settings." National Research Council. 2003. Elder Mistreatment: Abuse, Neglect, and Exploitation in an Aging America. Washington, DC: The National Academies Press. doi: 10.17226/10406.
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Suggested Citation:"13 Financial Abuse of the Elderly in Domestic Settings." National Research Council. 2003. Elder Mistreatment: Abuse, Neglect, and Exploitation in an Aging America. Washington, DC: The National Academies Press. doi: 10.17226/10406.
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Suggested Citation:"13 Financial Abuse of the Elderly in Domestic Settings." National Research Council. 2003. Elder Mistreatment: Abuse, Neglect, and Exploitation in an Aging America. Washington, DC: The National Academies Press. doi: 10.17226/10406.
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Suggested Citation:"13 Financial Abuse of the Elderly in Domestic Settings." National Research Council. 2003. Elder Mistreatment: Abuse, Neglect, and Exploitation in an Aging America. Washington, DC: The National Academies Press. doi: 10.17226/10406.
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Suggested Citation:"13 Financial Abuse of the Elderly in Domestic Settings." National Research Council. 2003. Elder Mistreatment: Abuse, Neglect, and Exploitation in an Aging America. Washington, DC: The National Academies Press. doi: 10.17226/10406.
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Suggested Citation:"13 Financial Abuse of the Elderly in Domestic Settings." National Research Council. 2003. Elder Mistreatment: Abuse, Neglect, and Exploitation in an Aging America. Washington, DC: The National Academies Press. doi: 10.17226/10406.
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Suggested Citation:"13 Financial Abuse of the Elderly in Domestic Settings." National Research Council. 2003. Elder Mistreatment: Abuse, Neglect, and Exploitation in an Aging America. Washington, DC: The National Academies Press. doi: 10.17226/10406.
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Suggested Citation:"13 Financial Abuse of the Elderly in Domestic Settings." National Research Council. 2003. Elder Mistreatment: Abuse, Neglect, and Exploitation in an Aging America. Washington, DC: The National Academies Press. doi: 10.17226/10406.
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Suggested Citation:"13 Financial Abuse of the Elderly in Domestic Settings." National Research Council. 2003. Elder Mistreatment: Abuse, Neglect, and Exploitation in an Aging America. Washington, DC: The National Academies Press. doi: 10.17226/10406.
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Suggested Citation:"13 Financial Abuse of the Elderly in Domestic Settings." National Research Council. 2003. Elder Mistreatment: Abuse, Neglect, and Exploitation in an Aging America. Washington, DC: The National Academies Press. doi: 10.17226/10406.
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Suggested Citation:"13 Financial Abuse of the Elderly in Domestic Settings." National Research Council. 2003. Elder Mistreatment: Abuse, Neglect, and Exploitation in an Aging America. Washington, DC: The National Academies Press. doi: 10.17226/10406.
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Suggested Citation:"13 Financial Abuse of the Elderly in Domestic Settings." National Research Council. 2003. Elder Mistreatment: Abuse, Neglect, and Exploitation in an Aging America. Washington, DC: The National Academies Press. doi: 10.17226/10406.
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Suggested Citation:"13 Financial Abuse of the Elderly in Domestic Settings." National Research Council. 2003. Elder Mistreatment: Abuse, Neglect, and Exploitation in an Aging America. Washington, DC: The National Academies Press. doi: 10.17226/10406.
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Suggested Citation:"13 Financial Abuse of the Elderly in Domestic Settings." National Research Council. 2003. Elder Mistreatment: Abuse, Neglect, and Exploitation in an Aging America. Washington, DC: The National Academies Press. doi: 10.17226/10406.
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Suggested Citation:"13 Financial Abuse of the Elderly in Domestic Settings." National Research Council. 2003. Elder Mistreatment: Abuse, Neglect, and Exploitation in an Aging America. Washington, DC: The National Academies Press. doi: 10.17226/10406.
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Suggested Citation:"13 Financial Abuse of the Elderly in Domestic Settings." National Research Council. 2003. Elder Mistreatment: Abuse, Neglect, and Exploitation in an Aging America. Washington, DC: The National Academies Press. doi: 10.17226/10406.
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Suggested Citation:"13 Financial Abuse of the Elderly in Domestic Settings." National Research Council. 2003. Elder Mistreatment: Abuse, Neglect, and Exploitation in an Aging America. Washington, DC: The National Academies Press. doi: 10.17226/10406.
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Suggested Citation:"13 Financial Abuse of the Elderly in Domestic Settings." National Research Council. 2003. Elder Mistreatment: Abuse, Neglect, and Exploitation in an Aging America. Washington, DC: The National Academies Press. doi: 10.17226/10406.
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Suggested Citation:"13 Financial Abuse of the Elderly in Domestic Settings." National Research Council. 2003. Elder Mistreatment: Abuse, Neglect, and Exploitation in an Aging America. Washington, DC: The National Academies Press. doi: 10.17226/10406.
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Suggested Citation:"13 Financial Abuse of the Elderly in Domestic Settings." National Research Council. 2003. Elder Mistreatment: Abuse, Neglect, and Exploitation in an Aging America. Washington, DC: The National Academies Press. doi: 10.17226/10406.
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Suggested Citation:"13 Financial Abuse of the Elderly in Domestic Settings." National Research Council. 2003. Elder Mistreatment: Abuse, Neglect, and Exploitation in an Aging America. Washington, DC: The National Academies Press. doi: 10.17226/10406.
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Suggested Citation:"13 Financial Abuse of the Elderly in Domestic Settings." National Research Council. 2003. Elder Mistreatment: Abuse, Neglect, and Exploitation in an Aging America. Washington, DC: The National Academies Press. doi: 10.17226/10406.
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Suggested Citation:"13 Financial Abuse of the Elderly in Domestic Settings." National Research Council. 2003. Elder Mistreatment: Abuse, Neglect, and Exploitation in an Aging America. Washington, DC: The National Academies Press. doi: 10.17226/10406.
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Suggested Citation:"13 Financial Abuse of the Elderly in Domestic Settings." National Research Council. 2003. Elder Mistreatment: Abuse, Neglect, and Exploitation in an Aging America. Washington, DC: The National Academies Press. doi: 10.17226/10406.
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Suggested Citation:"13 Financial Abuse of the Elderly in Domestic Settings." National Research Council. 2003. Elder Mistreatment: Abuse, Neglect, and Exploitation in an Aging America. Washington, DC: The National Academies Press. doi: 10.17226/10406.
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Suggested Citation:"13 Financial Abuse of the Elderly in Domestic Settings." National Research Council. 2003. Elder Mistreatment: Abuse, Neglect, and Exploitation in an Aging America. Washington, DC: The National Academies Press. doi: 10.17226/10406.
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Suggested Citation:"13 Financial Abuse of the Elderly in Domestic Settings." National Research Council. 2003. Elder Mistreatment: Abuse, Neglect, and Exploitation in an Aging America. Washington, DC: The National Academies Press. doi: 10.17226/10406.
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Suggested Citation:"13 Financial Abuse of the Elderly in Domestic Settings." National Research Council. 2003. Elder Mistreatment: Abuse, Neglect, and Exploitation in an Aging America. Washington, DC: The National Academies Press. doi: 10.17226/10406.
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Suggested Citation:"13 Financial Abuse of the Elderly in Domestic Settings." National Research Council. 2003. Elder Mistreatment: Abuse, Neglect, and Exploitation in an Aging America. Washington, DC: The National Academies Press. doi: 10.17226/10406.
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Suggested Citation:"13 Financial Abuse of the Elderly in Domestic Settings." National Research Council. 2003. Elder Mistreatment: Abuse, Neglect, and Exploitation in an Aging America. Washington, DC: The National Academies Press. doi: 10.17226/10406.
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Suggested Citation:"13 Financial Abuse of the Elderly in Domestic Settings." National Research Council. 2003. Elder Mistreatment: Abuse, Neglect, and Exploitation in an Aging America. Washington, DC: The National Academies Press. doi: 10.17226/10406.
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13 Financial Abuse of the Elderly in Domestic Settings Thomas L. Hafemeister* I n some ways financial abuse is very similar to other forms of elder abuse in that it can be devastating to the victim and is frequently traced to family members, trusted friends, and caregivers. But unlike physical abuse and neglect, financial abuse is more likely to occur with the tacit acknowledgment and consent of the elder person1 and can be more difficult to detect and establish. As a result, financial abuse requires a distinct analytical perspective and response. Unfortunately, these differ- ences are often overlooked. Little empirical research has been conducted that directly addresses financial abuse of the elderly, and in general it has received less attention than other forms of elder abuse (Nerenberg, 2000b). Although the amount of attention given to it has increased in recent years, most commentary rests *Thomas L. Hafemeister, J.D., Ph.D., is Director of Legal Studies at the Institute of Law, Psychiatry, and Public Policy, University of Virginia. He is indebted to Lori Stiegel, Carla VandeWeerd, and Richard Bonnie, who read and provided valuable comments on an earlier draft of this report. 1There is some controversy over whether this population should be referred to as elder persons (the elderly) or as older persons (older people). This dispute tends to focus on conflicting views regarding which terminology is the most descriptive and the least likely to perpetuate inappropriate stereotypes. Resolving this dispute, however, is tangential to the focus of this report. “Elder persons” and “the elderly” are used throughout this report primarily because they are widely used terms and appear routinely in related legislation and legislative hearings (see U.S. Congress, 2000). 382

FINANCIAL ABUSE OF THE ELDERLY 383 on a relatively thin empirical base and draws heavily on anecdotal observa- tions and relies (perhaps inappropriately) on research and analysis address- ing other forms of elder abuse, child abuse, and spouse/partner abuse. Because financial abuse is frequently addressed in conjunction with other forms of elder abuse, a brief overview of elder abuse in general is provided before turning specifically to financial abuse of the elderly. PREVALENCE OF ELDER ABUSE IN GENERAL Elder abuse, at least to some degree, has probably always existed. Only in the past few decades, however, has it been recognized as a major societal problem. Attention to elder abuse followed the “discovery” of child abuse in the 1960s and spouse abuse in the 1970s. Today, elder abuse is widely characterized as both a pervasive problem and a growing concern (Dessin, 2000; Heisler, 2000; Moskowitz, 1998b). The National Elder Abuse Incidence Study (NEAIS), which was de- scribed as the first national study of the incidence of elder abuse in the United States,2 estimated that nearly a half million persons aged 60 and over in domestic settings were abused or neglected during 1996 (National Center on Elder Abuse, 1998).3 Furthermore, this study determined that for every reported incident of elder abuse or neglect, approximately five incidents were unreported (National Center on Elder Abuse, 1998), sup- porting a wide consensus that elder abuse is greatly underreported (Choi and Mayer, 2000; Dessin, 2000; U.S. General Accounting Office, 1991; Kleinschmidt, 1997; Moskowitz, 1998b; National Center on Elder Abuse, 1996). The NEAIS confirmed a general view that state agencies established to receive such reports, such as Adult Protective Services (APS) agencies, receive reports of the most visible and obvious occurrences of elder abuse, but that there are many other incidents that are not reported. Nevertheless, 2It should be noted that the methodology employed in the NEAIS study has been ques- tioned (Comijs et al., 2000; Thomas, 2000). However, methodological limitations are associ- ated with virtually all elder abuse research. The goal of this report is not to provide a methodological critique of elder abuse research in general or financial abuse in particular. In addition, regardless of any methodological limitations, the NEAIS study provides useful com- parisons across categories of elder abuse. There is, however, a need for more rigorous research on both elder abuse in general and financial abuse of the elderly in particular. 3An earlier and frequently cited report from the House Select Committee on Aging sug- gested that between 1 million and 2 million older Americans experience mistreatment each year (U.S. Congress, 1991). Recent review articles have estimated the number of elderly individuals victimized each year as 2 million (Moskowitz, 1998a), 1.5 million (Dessin, 2000), 1 million (Marshall et al., 2000), and 818,000 (Coker and Little, 1997). It has also been estimated that 5 percent of elder persons suffer some form of abuse each year and that one out of every four will experience abuse or neglect at some time (Dessin, 2000).

384 ELDER MISTREATMENT the number of APS elder abuse reports substantially increased over the past 10 years, an increase that exceeded the growth in the elderly population during this period (National Center on Elder Abuse, 1998). FORMS OF ELDER ABUSE What constitutes elder abuse is defined by state law, and state defini- tions vary considerably (U.S. General Accounting Office, 1991; Kapp, 1995; National Center on Elder Abuse, 2001; Moskowitz, 1998b; Roby and Sullivan, 2000).4 Not surprisingly, researchers have also used many differ- ent definitions in studying the problem (Choi and Mayer, 2000; Kleinschmidt, 1997; Macolini, 1995; National Center on Elder Abuse, 2001; Pillemer and Finkelhor, 1988).5 The variation in definitions has been cited as a significant impediment to elder abuse recognition, manage- ment, research, and analysis (U.S. General Accounting Office, 1991; Kleinschmidt, 1997; Lachs and Pillemer, 1995; Moskowitz, 1998b; Nerenberg, 2000a; Roby and Sullivan, 2000; Rosenblatt et al., 1996). Elder abuse in domestic settings (i.e., within the older person’s own home or in the home of a caregiver) is often differentiated from elder abuse within institutional settings (i.e., within residential facilities for older per- sons such as nursing homes) (Brandl and Meuer, 2000; National Center on Elder Abuse, 1996, 2001). Domestic elder abuse has been asserted to be more prevalent than institutional elder abuse (Kosberg and Nahmiash, 1996; Marshall et al., 2000; Moskowitz, 1998b), in part because it has been estimated that 80 percent of the dependent elders in this country are cared for at home (National Center on Elder Abuse, 1996). However, research directly substantiating this assertion is lacking.6 Another di- chotomy frequently used distinguishes between elder abuse by individuals who have a special relationship with the elder person (e.g., spouses, chil- dren, other relatives, friends, or caregivers providing services within the 4These variations include whether elder abuse is addressed as a separate category or whether it is grouped with the abuse of adults with a disability of any age, the age cutoff used to define an elder person, the definitions of various types of abuse, and whether elder abuse encom- passes self-neglect or sexual abuse (Dessin, 2000; Lachs and Pillemer, 1995; Mehta, 2000). 5The little research that has been conducted has been criticized for conceptual and method- ological weaknesses, including reliance on underinclusive or nonrepresentative samples of cases brought to the attention of social agencies or reporting authorities, unclear definitions of elder abuse, reliance on professional reports rather than victim interviews, and failure to use rigorous research designs, such as random-sample surveys and case-comparison studies (Pillemer and Finkelhor, 1988; Schiamberg and Gans, 2000). 6Data on institutional elder abuse are so scarce that it is not possible to make any national estimates of its incidence or prevalence” (National Center on Elder Abuse, 1996:2).

FINANCIAL ABUSE OF THE ELDERLY 385 elder person’s home) and individuals with whom such a preexisting special relationship does not exist (Kosberg and Nahmiash, 1996; Marshall et al., 2000; National Center on Elder Abuse, 1996, 2001).7 Within domestic settings, it has been reported that the perpetrators of elder abuse are much more likely to be family members (National Center on Elder Abuse, 1996). Although conceptualizations of what elder abuse encompasses vary considerably, the National Center on Elder Abuse (2001) identifies six major categories of elder abuse. They include physical abuse, sexual abuse, emotional or psychological abuse, neglect, abandonment, and financial abuse. Among these categories, financial abuse has received limited atten- tion and is often not assessed in studies of elder abuse (Choi et al., 1999; Kleinschmidt, 1997; Tueth, 2000). Nonetheless, financial abuse is increas- ingly viewed as both sufficiently important to necessitate its inclusion in studies of elder abuse in general and sufficiently distinct to justify address- ing it separately (Choi and Mayer, 2000). PARAMETERS OF FINANCIAL ABUSE OF THE ELDERLY The remainder of this report focuses on financial abuse of the elderly within a domestic setting by individuals relatively well known to the elder person. This focus encompasses financial abuse by family members, friends, and caregivers of the elder person and excludes financial abuse within institutional settings or by strangers. Domestic settings are not only a frequent setting for this abuse,8 but their tendency to involve complex fam- ily dynamics and deep-seated conflicts tends to make them particularly challenging. Although financial abuse of the elderly within institutional settings (e.g., within nursing homes) and by strangers (e.g., in the course of consumer fraud) are serious concerns in their own right and in need of systematic study (of which little has been generated to date),9 they are not the foci of this report. To address financial abuse of the elderly, its parameters should first be defined. Variously referred to as financial mistreatment; exploitation; or fiduciary, economic, or material abuse, this type of abuse encompasses a 7The latter would encompass most incidents of consumer fraud. 8About 80 percent of the estimated 6 million dependent elders in this country are cared for at home” (National Center on Elder Abuse, 1996:11–12). Furthermore, although little re- search has been conducted on financial abuse within institutional settings, recent studies identifying the top 10 deficiencies in long-term care facilities identified physical abuse or neglect more frequently than financial abuse (Menio and Keller, 2000). 9For a discussion of consumer fraud perpetrated on the elderly, see Deem (2000), McGhee (1983), Smith (1999), and U.S. Congress (2000).

386 ELDER MISTREATMENT broad range of conduct (National Committee for the Prevention of Elder Abuse, 2001). There have been widespread complaints that financial abuse of the elderly is poorly defined, in part because it is hard to define, which makes it difficult to identify, investigate, and prosecute (Dessin, 2000; Langan and Means, 1996; Marshall et al., 2000; Roby and Sullivan, 2000; Sanchez, 1996; Wilber and Reynolds, 1996). The absence of a uniform definition perhaps explains why it is often not included or is poorly ad- dressed in research on elder abuse in general (Langan and Means, 1996). Because elder abuse, like other domestic ills, has generally been consid- ered a state concern rather than a federal concern, the absence of federal law pertaining to elder abuse has placed on the states the responsibility to define this activity. Forty-eight states and the District of Columbia are reported to specifically mention financial abuse in their elder abuse statutes (Roby and Sullivan, 2000; Wilber and Reynolds, 1996).10 States’ defini- tions, however, vary widely on what constitutes financial abuse and who can be held accountable for it (Roby and Sullivan, 2000; Sanchez, 1996). One complicating factor is variations in the class of individuals targeted for protection from financial abuse. Three general approaches are em- ployed. In some states all individuals who have reached a given age are specifically protected, in other states protection is provided to all vulnerable or incapacitated adults regardless of age, and a third group of states uses a hybrid approach that protects vulnerable or incapacitated adults of any age and all adults over a certain age (Dessin, 2000; Roby and Sullivan, 2000). The last two approaches can make it difficult for researchers to distinguish reports of elder abuse from reports of adults in general (Coker and Little, 1997). The first approach, however, has been criticized for perpetuating the unfounded stereotype that all elderly persons are vulnerable and in need of protection (Roby and Sullivan, 2000). Also, some states require dimin- ished decision-making capacity by the elder person before financial abuse is considered to occur, while other states do not impose such a requirement (Tueth, 2000). States even vary on the age when someone becomes “eld- erly” (Coker and Little, 1997; Paveza, 2001). Other variations in state definitions are associated with who can be held accountable for financial abuse. Some states require dishonest tactics by perpetrators, such as the use of force, duress, misrepresentation, undue influence, or other illegal means, to take advantage of the elder person. Other states do not require a showing of such tactics if the perpetrator knew or should have known that the elder person lacked the cognitive 10As of 1995, New York and Oregon were purported to be silent on financial abuse (Wilber and Reynolds, 1996).

FINANCIAL ABUSE OF THE ELDERLY 387 capacity to make financial decisions (Tueth, 2000). Similarly, some states limit financial abuse to an intentional improper use of the elder’s resources, while other states encompass negligent, or at least reckless, advice or con- duct, such as failing to use income effectively for the care of the older person (Dessin, 2000; Roby and Sullivan, 2000). Generally the victim must experience some disadvantage as a result of the transaction, but some states also require that the perpetrator gain some advantage from the transaction (Dessin, 2000). The latter would not penal- ize actions that merely wasted the elder person’s assets (Dessin, 2000). States also vary on whether abuse is limited to the abuse of the elder person’s money and real property or also encompasses other resources such as the elder person’s goods and services (Roby and Sullivan, 2000). Finally, some states limit financial abuse to those in a “position of trust” to an elder person (Roby and Sullivan, 2000). It is widely recognized that it is difficult, even for experienced profes- sionals, to distinguish an unwise but legitimate financial transaction from an exploitative transaction resulting from undue influence, duress, fraud, or a lack of informed consent (Tom, 2001).11 The seasoned professional can also be tested by the complex and varied nature of these transactions (Dessin, 2000). It may also be difficult to distinguish abusive conduct from well-intentioned but poor, confused, or misinformed advice and direction (Dessin, 2000; Langan and Means, 1996). Evaluating whether financial abuse has occurred has been characterized as a complex and often subjec- tive determination (Bernatz et al., 2001). Further complicating efforts to establish the parameters of financial abuse of the elderly are that both the elder person and the perpetrator may feel that the perpetrator has some entitlement to the elder person’s assets (Dessin, 2000). Elder persons may feel a desire to benefit their heirs or to compensate those who provide them with care, affection, or attention (Dessin, 2000; Langan and Means, 1996). It can be difficult to discern a transfer of assets made with consent from an abusive transfer (Dessin, 2000; Wilber and Reynolds, 1996). Also, conduct that began in the elder person’s best interests may be- come abusive over time, as when perpetrators initially provide helpful ad- vice regarding financial investments but take on greater control and ulti- 11Wilber and Reynolds (1996) provide a framework for distinguishing financial abuse of the elderly from acceptable exchanges, while Tueth (2000) identifies transactions needing careful scrutiny before concluding that financial exploitation has occurred. Roby and Sullivan (2000) argue that definitions of financial abuse should be broad enough to provide sufficient flexibility to address the range of financial abuse and offenders, yet specific enough to protect individuals acting in the best interests of the elder person.

388 ELDER MISTREATMENT mately misappropriate funds for themselves as the elder person’s cognitive abilities decline (Dessin, 2000). Typically, financial abuse in a domestic setting reflects a pattern of behavior rather than a single event and occurs over a lengthy period of time (National Clearinghouse on Family Violence, 2001; Wilber and Reynolds, 1996). Determining when financial abuse began can be very difficult (Smith, 1999). Finally, a number of commentators have asserted that whether finan- cial abuse is considered to have occurred should reflect the elder person’s perception of the purported abuse and the cultural context in which it takes place (Moon, 2000; Nerenberg, 2000a; Sanchez, 1996; Wolf, 2000; see generally Tatara, 1999). For example, attitudes about the legitimacy of a transfer may reflect expectations within a given culture that elderly persons will share their resources with family members in need, while other cultures reject this notion (Brown, 1999; Moon, 2000; Nerenberg, 2000a). Studies have shown considerable variation in what constitutes financial abuse across cultural, racial, and ethnic groups (Brown, 1999; Hudson and Carlson, 1999; Moon, 2000; Nerenberg, 2000a), and it has been argued that a failure to take into account these differences undercuts efforts to assess financial abuse of the elderly (Sanchez, 1996).12 TYPES OF FINANCIAL ABUSE OF THE ELDERLY In efforts to address financial abuse of the elderly, advocates for the elderly often delineate typical examples of this abuse.13 Examples specifi- cally relevant to a domestic setting and financial abuse by individuals rela- tively well known to the elder person include: • taking, misusing, or using without knowledge or permission money or property (Dessin, 2000; National Center on Elder Abuse, 2001; Na- tional Clearinghouse on Family Violence, 2001; National Committee for the Prevention of Elder Abuse, 2001); • forging or forcing an elder person’s signature (National Center on Elder Abuse, 2001; National Clearinghouse on Family Violence, 2001; National Committee for the Prevention of Elder Abuse, 2001); • abusing joint signature authority on a bank account (Rush and Lank, 2000); 12At the same time, the law places considerable weight on the importance of establishing requisite standards of behavior that are uniform, consistent, and predictable across groups of individuals. 13For a lengthy list of specific examples of financial exploitation, see U.S. Congress (1981).

FINANCIAL ABUSE OF THE ELDERLY 389 • misusing ATMs or credit cards (New York State Department of Law, 2000); • cashing an elder person’s checks without permission or authoriza- tion (National Center on Elder Abuse, 2001); • misappropriating funds from a pension (New York State Depart- ment of Law, 2000; Langan and Means, 1996); • getting an elder person to sign a deed, will, contract, or power of attorney through deception, coercion, or undue influence (National Center on Elder Abuse, 2001; National Clearinghouse on Family Violence, 2001; National Committee for the Prevention of Elder Abuse, 2001); • providing true but misleading information that influences the elder person’s use or assignment of assets (Dessin, 2000); • persuading an impaired elder person to change a will or insurance policy to alter who benefits from the will or policy (Central California Legal Services, 2001; Frolik, 2001; Smith, 1999); • using a power of attorney, including a durable power of attorney, for purposes beyond those for which it was originally executed (Hwang, 1996; National Clearinghouse on Family Violence, 2001; Thilges, 2000); • improperly using the authority provided by a conservatorship, trust, etc. (National Center on Elder Abuse, 2001); • negligently mishandling assets, including misuse by a fiduciary or caregiver (Dessin, 2000); • promising long-term or lifelong care in exchange for money or property and not following through on the promise (National Committee for the Prevention of Elder Abuse, 2001); • overcharging for or not delivering caregiving services (Central Cali- fornia Legal Services, 2001); and • denying elder persons access to their money or preventing them from controlling their assets (National Clearinghouse on Family Violence, 2001; Smith, 1999). PREVALENCE AND IMPACT OF FINANCIAL ABUSE Prevalence of Financial Abuse of the Elderly The prevalence of financial abuse of the elderly (like elder abuse in general) is difficult to estimate because there is no national reporting mecha- nism to record and analyze it, cases often are not reported, definitions vary, and it is difficult to detect (Coker and Little, 1997; Deem, 2000; National Clearinghouse on Family Violence, 2001). However, the consensus is that it is a significant problem (Dessin, 2000). The National Center for Elder Abuse found that financial abuse ac- counted nationally for about 12 percent of all substantiated elder abuse

390 ELDER MISTREATMENT reports in 1993 and 1994 (National Center on Elder Abuse, 2000; Zimka, 1997). A subsequent more comprehensive study conducted by the same entity found that 18.6 percent of the 115,110 substantiated elder abuse reports submitted to APS agencies nationwide in 1996—which included reports of self-neglect—and were reports of financial or material exploita- tion (National Center on Elder Abuse, 1998). Excluding reports of self- neglect, this exploitation appeared in 30.2 percent of the substantiated reports. This represented the third largest category of reports, less than neglect (48.7 percent) and emotional or psychological abuse (35.41 per- cent), but more than physical abuse (25.6 percent).14 A national survey in Canada found that financial abuse was the most common type of elder abuse in that country (Podnieks, 1992).15 Some parts of the country report an even greater prevalence of financial abuse.16 Financial exploitation has been reported to be the most frequent form of perpetrator-related elder abuse in Illinois (Neale et al., 1996) and Oregon (U.S. Congress, 2000). It has been asserted that half of all abuse cases in New York state include financial exploitation and that in New York City 63 percent of abuse cases involve finances (New York State Department of Law, 2000). A study of APS reports in upstate New York between 1992 and 1997 that led to state intervention found that financial exploitation was present in 38.4 percent of the cases (Choi and Mayer, 2000). A study in Massachusetts found that almost one-half of the cases of elder abuse serious enough to require reporting to a district attorney in- volved financial exploitation (Dessin, 2000). A review of California reports from 1987 found that fiduciary abuse was the most prevalent type of exploitation and appeared in 41.5 percent of the cases, with the next most prevalent type of exploitation being physical abuse, which appeared in 33.3 percent of the cases (County Welfare Directors Association, 1988). In their review of older studies, Wilber and Reynolds (1996) determined that be- tween 33 percent and 53 percent of an estimated 1 million elder abuse victims experienced financial abuse. Financial abuse has also been reported to be greater among various minority populations. For example, exploitation was found to be the most commonly reported abuse in samples of Korean immigrant and black elders 14More than one substantiated type of abuse could be reported for an incident. The study did not, however, provide specific information about this overlap (e.g., how often financial abuse occurred in conjunction with another form of elder abuse). 15A British Columbia study is reported to have found that 8 percent of older adults had been financially abused, with an average loss of $20,000 each (National Clearinghouse on Family Violence, 2001). 16The variation in rates among states may be attributed in part to differing definitions and assessments of financial abuse (Lavrisha, 1997).

FINANCIAL ABUSE OF THE ELDERLY 391 (Hall, 1999; Moon, 1999). It has also been suggested that in general financial abuse is particularly likely to be underreported (Coker and Little, 1997; Hwang, 1996; Wilber and Reynolds, 1996). It has been asserted that financial abuse often occurs in conjunction with other forms of elder abuse (Choi et al., 1999; National Clearinghouse on Family Violence, 2001; Paris et al., 1995), although research generally does not establish how frequently this overlap occurs.17 In a study of one county’s investigated APS reports of financial exploitation Choi et al. (1999) found that caregiver neglect also occurred in 12.1 percent of the cases, self- neglect in 6.1 percent, physical abuse in 5.1 percent, and psychological abuse in 3.8 percent. In a later analysis, Choi and Mayer (2000) found that 33.7 percent of this county’s investigated reports involved financial exploi- tation plus either neglect or abuse, while 37.6 percent involved only finan- cial exploitation. However, in a Canadian national survey, only 19 percent of victims were victims of more than one form of maltreatment, although it was not reported how often financial abuse occurred in conjunction with other forms of elder abuse (Podnieks, 1992). Financial exploitation has been described as the fastest growing form of elder abuse (New York State Department of Law, 2000), although empiri- cal support for this assertion is scanty. Societal attention to elder abuse in general is a relatively recent phenomenon, and attention to financial abuse is even more nascent (Dessin, 2000). It has been suggested that an increase in reports reflects closer scrutiny by federal, state, and local officials rather than necessarily an increase in the prevalence of financial abuse (Lavrisha, 1997). Greater attention to this issue has been attributed to increases in the number of elderly people, an increased emphasis on care at home, and the substantial resources of the elderly (Langan and Means, 1996). The Impact of Financial Abuse on the Elderly One of the most frightening scenarios for an elder person is the possi- bility of financial ruin (Dessin, 2000). Although not systematically as- sessed, losing assets accumulated over a lifetime, often through hard work and deprivation, can be devastating, with significant practical and psycho- logical consequences (Dessin, 2000; Nerenberg, 2000c; Smith, 1999). Fi- nancial abuse can have as significant an impact for an elder person as a violent crime (Deem, 2000) or physical abuse (Dessin, 2000). Replacing lost assets is generally not a viable option for retired indi- 17Elder abuse examples provided in governmental reports often show a combination of financial abuse and physical or psychological abuse or neglect (County Welfare Directors Association, 1988; U.S. Congress, 1981).

392 ELDER MISTREATMENT viduals or individuals with physical or mental disabilities (Coker and Little, 1997; Dessin, 2000; Moskowitz, 1998b; Nerenberg, 2000c). Also, because of their age, the elderly will have less time to recoup their losses and often are solely dependent on their savings to meet subsequent expenses and needs (Smith, 1999). A depletion of assets is likely to result in a loss of independence and security for the elder person (Choi et al., 1999; Nerenberg, 2000c), which can have significant symbolic and practical rami- fications. Such abuse may necessitate that the elder person become depen- dent on family members, inducing or adding to their financial burden and stress (Coker and Little, 1997). Alternatively, financial abuse may result in elder persons becoming dependent on social welfare agencies, with a signifi- cant decline in their quality of life (Coker and Little, 1997). From a psychological perspective, a loss of trust in others has been identified as the most common consequence of financial abuse (Deem, 2000). In addition, victims may become very fearful, both of crime and of their vulnerability to crime, which in turn may lead to dramatic changes in lifestyle and emotional well-being (Fielo, 1987). Victims may also experi- ence a loss of confidence in their own financial abilities, stress, and isolation from family or friends (Deem, 2000). Financial abuse may lead to depres- sion, hopelessness, or even suicide (Nerenberg, 2000c; Podnieks, 1992). In addition, it has been noted that, unlike physical and psychological abuse, the effects of financial abuse may not end with the death of the victim. Family members whose inheritance was reduced or depleted as a result of the financial abuse will suffer loss and may themselves feel abused, particularly if they felt entitled to inherit the victim’s assets (Dessin, 2000). WHY ELDER PERSONS ARE TARGETS FOR FINANCIAL ABUSE Although empirical support is often not provided, many reasons have been identified for why the elderly are targeted for financial abuse. One set of reasons addresses the financial assets and acumen of the elderly. For example, one widely cited factor is that elder persons possess a large pro- portion of the nation’s wealth (Central California Legal Services, 2001; National Committee for the Prevention of Elder Abuse, 2001), with 70 percent of all funds deposited in financial institutions controlled by persons age 65 and older (Dessin, 2000). Other explanations have been that older people may be more trusting than their younger counterparts (Central Cali- fornia Legal Services, 2001) or may be relatively unsophisticated about financial matters, particularly when they are unfamiliar with advances in technology that have made managing finances more complicated (National Committee for the Prevention of Elder Abuse, 2001). Also, they may not realize the value of their assets—particularly homes that have appreciated greatly in value (Central California Legal Services, 2001; National Com-

FINANCIAL ABUSE OF THE ELDERLY 393 mittee for the Prevention of Elder Abuse, 2001). It has also been suggested that the difficulties of living on a fixed income may enhance their willing- ness to try a “get-rich-quick” scheme (Dessin, 2000). Other reasons focus on characteristics of the elderly. One explanation is that elder persons may be easily identifiable and are presumed vulnerable (Central California Legal Services, 2001). In addition, elder persons may be more likely to have conditions or disabilities that make them easy targets for financial abuse, including forgetfulness or other cognitive impairments (Central California Legal Services, 2001; Choi and Mayer, 2000). Elder persons may also have a diminished capacity to rationally evaluate pro- posed courses of action (Dessin, 2000). A third set of factors focuses on social isolation that the elderly may experience (Quinn, 2000). For example, elder persons may be more likely to have disabilities that make them dependent on others for help. These “helpers” may have ready access to elder persons’ assets, documents, or financial information or be able to exercise significant influence over the elder person (National Committee for the Prevention of Elder Abuse, 2001; Nerenberg, 2000c; Quinn, 2000). In addition, seniors may be isolated due to their lack of mobility or because they live alone, which shields perpetra- tors from scrutiny and insulates victims from those who can help (Dessin, 2000; Nerenberg, 2000c). Also, the elderly may be lonely and desire com- panionship and thus be susceptible to persons seeking to take advantage of them (Hwang, 1996). A fourth group of reasons suggests that perpetrators assume that finan- cial abuse of the elderly is unlikely to result in apprehension or repercus- sions. Perpetrators may believe that elder persons are less likely to report abuse or take action against perpetrators, particularly if they have been victimized by family members or other trusted individuals (Central Califor- nia Legal Services, 2001; Hwang, 1996; National Committee for the Pre- vention of Elder Abuse, 2001). The elder person may be afraid or embar- rassed to ask for help or be intimidated by the abuser (Hwang, 1996). Perpetrators may also recognize that older people in very poor health may not survive long enough to follow through on lengthy legal interventions (Central California Legal Services, 2001; National Committee for the Pre- vention of Elder Abuse, 2001) or that they will not make convincing wit- nesses (National Committee for the Prevention of Elder Abuse, 2001). RISK FACTORS AND CHARACTERISTICS OF VICTIMS A number of conditions or factors have been identified as increasing the likelihood that an older person will be the victim of financial abuse in a domestic setting. However, there has also been limited systematic research on this issue.

394 ELDER MISTREATMENT Older women who are white and live alone are considered to be the most likely victims of this abuse, perhaps more so than for any other form of elder abuse. The national NEAIS report found that 63 percent of the APS reports from 1996 involved victims who were women, which was somewhat more than their percentage of the elder population at that time (57.6 percent) (National Center on Elder Abuse, 1998). However, when relying on the reports of their sentinels, which were asserted to be more comprehensive in scope and to include unreported incidents, the NEAIS report concluded that 91.8 percent of the victims of financial abuse of the elderly were women, the highest percentage for any form of elder abuse (the next highest proportion was 83.2 percent for physical abuse) (National Center on Elder Abuse, 1998). The NEAIS report also found that the targets of financial abuse tended to be the oldest old, with 48 percent of the substantiated APS reports and 25.3 percent of the sentinel reports involving victims 80 years of age or older, even though they only comprised 19 percent of the total elderly population (National Center on Elder Abuse, 1998). Finally, the NEAIS report found that 83 percent of the substanti- ated APS reports and 92.4 percent of the sentinel reports of financial abuse involved white victims (whites comprised 84 percent of the national popu- lation of elders in 1996) (National Center on Elder Abuse, 1998). Another report concluded from the scant amount of research available and the authors’ analysis of cases from Alabama that more than 60 percent of the victims of financial abuse of the elderly were likely to be elderly white females over the age of 70 (Coker and Little, 1997). A study of APS financial exploitation reports in an upstate New York county between 1989 and 1996 found that the elder victims were, on average, 78 years old, 68.7 percent of them were female, and 66.9 percent of them lived alone (Choi et al., 1999). A Canadian national survey found that 62 percent of elder victims of financial abuse were female, only 31 percent were married (the lowest percentage of any category of elder abuse—51 percent of elderly nonvictims were married), 54 percent were widowed, and 58 percent lived alone (the highest percentage of any category of elder abuse, with only 39 percent of elderly nonvictims living alone) (Podnieks, 1992). The widely cited profile of a target for financial abuse is generally a white woman over 75 who is living alone (Bernatz et al., 2001; Rush and Lank, 2000; Tueth, 2000). A number of reasons are given for why most elder victims of financial abuse are women (Dessin, 2000). One is actuarial in nature; namely, women live longer than men and thus more women are available as targets for financial abuse of the elderly. Second, perpetrators may perceive women as weak and vulnerable in general. Third, many women have not handled their financial affairs because their husbands handled them. When their

FINANCIAL ABUSE OF THE ELDERLY 395 husbands die or lose the capacity to manage their finances, these women make particularly good targets for perpetrators who offer “help” but in- stead exploit available assets. Regardless of gender, a lack of familiarity with financial matters in general or the means of conducting a particular financial transaction en- hances the likelihood of financial abuse (Choi et al., 1999; Choi and Mayer, 2000; National Committee for the Prevention of Elder Abuse, 2001). Changes in and unfamiliarity with the means by which financial transac- tions are conducted, including electronic transactions, add to this vulner- ability. The risk of financial abuse may also be increased when the elder person is uncomfortable speaking about financial issues (Rush and Lank, 2000). In general, elders who own a house, a substantial and visible asset, are more likely to be exploited (Choi et al., 1999; Choi and Mayer, 2000). Other factors identified as increasing the likelihood of financial abuse focus on the social status of the elder person. Identified risk factors include an elder person’s social isolation, loneliness, and recent loss of loved ones (Bernatz et al., 2001; Choi and Mayer, 2000; Hwang, 1996; National Committee for the Prevention of Elder Abuse, 2001; Podnieks, 1992; Quinn, 2000; Tueth, 2000; Wilber and Reynolds, 1996). Having family members who are unemployed or who have substance abuse problems have also been identified as placing an elder person at greater risk of financial abuse (Na- tional Committee for the Prevention of Elder Abuse, 2001). Similarly, when a relative is the elder person’s only social support, the risk of financial exploitation may be increased (Choi et al., 1999). Conversely, having family members who are actively involved in good faith in assisting with or managing the financial affairs of the elderly has been determined to dimin- ish the risk that the elderly will experience financial abuse (Rush and Lank, 2000). However, a combination of denial of a need for such assistance, busy lives, and a reluctance to confront difficult issues may keep many family members from such involvement (Rush and Lank, 2000). It has also been noted that little is known about the close bonds that develop naturally between the elderly and their caregivers, particularly when services are provided the elderly within their homes, and what leads to financial abuse (Quinn, 2000). Physical or mental disabilities of elder persons have also been identified as risk factors, including medical problems that limit their ability to under- stand and comprehend financial issues and impairments that create depen- dency on others (Bernatz et al., 2001; Choi et al., 1999; Giordano et al., 1992; Hwang, 1996; National Committee for the Prevention of Elder Abuse, 2001; Podnieks, 1992; Tueth, 2000; Wilber and Reynolds, 1996). However, it has been argued that the extent to which older persons are vulnerable to financial abuse is more directly related to the circumstances in

396 ELDER MISTREATMENT which they live than advanced age per se (Smith, 1999) and that age alone should not lead to a presumption of incapacity (Wilber and Reynolds, 1996). SIGNALS OF FINANCIAL ABUSE Relying primarily on anecdotal evidence, personal experience, or com- monly shared beliefs, practitioners have compiled and circulated a number of indicators that suggest when financial abuse of an elder person may be occurring. These indicators have been distributed to bank employees, law- yers, and the public in general. It is recommended that no single indicator be taken as establishing the existence of financial abuse, as there may be other explanations for the occurrence of the indicator; instead reliance is placed on a pattern or cluster of indicators (National Committee for the Prevention of Elder Abuse, 2001). It has also been argued that it is almost impossible to detect financial abuse without considerable knowledge of the victim’s financial affairs (Dessin, 2000). It has been suggested that bank tellers, personal bankers, officials responsible for registering deeds, family members, and neighbors are the most likely to observe the signs of financial abuse (Henningsen, 2001). The indicators can be grouped by the setting or circumstances in which they are most likely to be observed.18 For example, a number of indicators can be apparent during a visit to the home or residence of the elder person. A relatively obvious indicator is missing belongings or property (e.g., jewelry) (Hwang, 1996; National Cen- ter on Elder Abuse, 2001; National Clearinghouse on Family Violence, 2001; National Committee for the Prevention of Elder Abuse, 2001; Zimka, 1997). Financial abuse may be suggested by an absence of documentation about financial arrangements or transactions (e.g., pensions, stock, govern- ment payments, credit card charges) (Central California Legal Services, 2001; National Committee for the Prevention of Elder Abuse, 2001). Im- plausible or evasive explanations by the elder person or the caregiver about the elder person’s finances, the elder person’s unawareness of or confusion about recently completed financial transactions, or the elder person appear- ing to be afraid or worried when talking about money may serve as indica- tors (Carroll, 2001; Central California Legal Services, 2001; National Clear- inghouse on Family Violence, 2001; National Committee for the Prevention of Elder Abuse, 2001). Alternatively, unpaid bills, eviction or foreclosure 18Wilber and Reynolds (1996) have developed a framework that organizes various indica- tors of financial abuse in such a way as to assist professionals to distinguish legitimate from illegitimate transactions.

FINANCIAL ABUSE OF THE ELDERLY 397 notices, or notices to discontinue utilities despite the availability of ad- equate financial resources may suggest financial abuse (Carroll, 2001; Cen- tral California Legal Services, 2001; National Center on Elder Abuse, 2001; National Committee for the Prevention of Elder Abuse, 2001; Zimka, 1997). Financial abuse may also be indicated by a lack of care or substandard care, a decline in personal grooming, or an absence of clothing, food, or other basic necessities when the older person can afford them (National Center on Elder Abuse, 2001; National Clearinghouse on Family Violence, 2001; National Committee for the Prevention of Elder Abuse, 2001; Zimka, 1997). Similarly, financial abuse may be suggested by complaints from the elder person about once having had money but not seeming to have much anymore (Carroll, 2001; Zimka, 1997) or a sudden inability to pay bills (Langan and Means, 1996). Additional signals may be provided by an unkempt residence when arrangements have been made for providing care or a failure to receive services for which payment has already been made (Central California Legal Services, 2001). Alternatively, the provision of services that are not necessary may also indicate financial abuse (National Center on Elder Abuse, 2001). Untreated medical or mental health prob- lems may be an indication of financial abuse (Central California Legal Services, 2001; Hwang, 1996). In general, significant cognitive impair- ments suggest vulnerability to financial abuse (Choi et al., 1999; Choi and Mayer, 2000; Wilber and Reynolds, 1996). Another widely cited indicator is social isolation of the elder person, including a discontinuation of prior relationships with family and friends (Central California Legal Services, 2001; Henningsen, 2001; National Clear- inghouse on Family Violence, 2001; Wilber and Reynolds, 1996). In- creased dependence on others, loneliness, loss of loved ones, and a reduced sense of self-worth can indicate vulnerability to financial abuse (Wilber and Reynolds, 1996). Relatedly, financial abuse may be suggested by new acquaintances or “best friends,” particularly those who take up residence with the older person, who the elder person relies on totally, or who express overenthusiastic affection for the elder person (Carroll, 2001; Coker and Little, 1997; Hwang, 1996; National Committee for the Prevention of Elder Abuse, 2001). Financial abuse may be suggested by a noticeable increase in the spending of people living with or caring for the older person (Dessin, 2000; Henningsen, 2001) or by sudden heavy traffic in and out of the home (Hwang, 1996). Another warning signal may be caregivers or family members who express excessive interest in the amount of money being spent on the older person, who ask only financial questions, or who do not allow the elder person to speak (Carroll, 2001; Langan and Means, 1996; National Clearinghouse on Family Violence, 2001; National Com- mittee for the Prevention of Elder Abuse, 2001; Tueth, 2000). Also a

398 ELDER MISTREATMENT promise of lifelong care may be accompanied by an implicit or explicit expectation that the elder person’s funds will be transferred to the caregiver (Hwang, 1996). Family members who are addicted to alcohol or drugs or who indicate they feel entitled to the elder person’s funds may suggest financial abuse (Hwang, 1996). Alternatively, a circle of mutual dependence or conflict that engulfs family members may engender financial abuse or leave family members blind to its possibility (Gold and Gwyther, 1989). A second setting in which indicators of financial abuse may arise is associated with the conduct of banking transactions. For example, finan- cial abuse may be suggested by withdrawals from or transfers between bank accounts that the older person cannot explain, unusual or unex- plained sudden activity, including large withdrawals (particularly when the elder person is accompanied by another person), or frequent transfers or ATM withdrawals (Coker and Little, 1997; Commonwealth of Massachu- setts, 2001; Henningsen, 2001; Hwang, 1996; National Center on Elder Abuse, 2001; National Clearinghouse on Family Violence, 2001; National Committee for the Prevention of Elder Abuse, 2001). Other indicators include having bank statements and canceled checks sent to an address that is not the elder person’s residence, suspicious signatures on checks or other documents, and the inclusion of additional names on an elder person’s credit card or bank signature card (Coker and Little, 1997; National Center on Elder Abuse, 2001; National Clearinghouse on Family Violence, 2001; National Committee for the Prevention of Elder Abuse, 2001; Zimka, 1997). Related indicators focus on deviations from the elder person’s usual banking behavior (Commonwealth of Massachusetts, 2001; National Cen- ter on Elder Abuse, 2001). They include suspicious activity on credit card accounts; bank activity that is erratic, unusual, or uncharacteristic; and bank activity inconsistent with the person’s abilities (e.g., ATM withdraw- als by someone who is homebound) (Central California Legal Services, 2001; Coker and Little, 1997; Dessin, 2000; Zimka, 1997). Another indi- cation is provided when individuals have no awareness of the current state of their personal financial affairs (Rush and Lank, 2000). A signal may be provided when checks uncharacteristically begin to lack adequate funds to cover them, when the person is in debt and does not know why, when mostly smaller checks increase to larger checks for a variety of items, or an unusual number of checks are written to “cash” (Carroll, 2001; Dessin, 2000; Henningsen, 2001; National Clearinghouse on Family Violence, 2001). A third cluster of indicators is associated with legal transactions involv- ing the elder person and is directed largely at attorneys. They include the execution of legal documents or arrangements, such as powers of attorney,

FINANCIAL ABUSE OF THE ELDERLY 399 by an older person who is confused or who does not understand or remem- ber the transaction (Carroll, 2001; Central California Legal Services, 2001; Hwang, 1996; National Clearinghouse on Family Violence, 2001; National Committee for the Prevention of Elder Abuse, 2001). Other signs are suspicious or forged signatures on documents and changes in the older person’s property, titles, will, or other documents, particularly if the changes are unexpected, sudden, or favor new acquaintances (National Center on Elder Abuse, 2001; National Clearinghouse on Family Violence, 2001; National Committee for the Prevention of Elder Abuse, 2001; Zimka, 1997). Another signal can be the sudden appearance of previously uninvolved relatives claiming rights to an elder person’s affairs and posses- sions (National Center on Elder Abuse, 2001). A fourth cluster of signals is associated with visits to physicians or other health care providers. One such signal is a patient’s unmet physical needs notwithstanding the availability of financial resources (Lachs and Pillemer, 1995). Other identified behaviors are missed medical appoint- ments, dropping out of treatment, uncharacteristic nonpayment for ser- vices, declining physical and psychological health, defensiveness or hostility by the caregiver during visits or on the phone, and an unwillingness by the caregiver to leave the elder person alone during appointments (Tueth, 2000). MOTIVATIONS AND CHARACTERISTICS OF PERPETRATORS As is true of most aspects of financial abuse of the elderly, little research has been conducted on the motivations and characteristics of its perpetra- tors. Nevertheless, there has been considerable speculation about them by professionals interested in reducing this abuse. One set of motivations widely identified tends to be associated with all forms of elder abuse. Frequently cited motivations include the perpetrator’s substance abuse, mental health, gambling, or financial problems (Dessin, 2000; National Committee for the Prevention of Elder Abuse, 2001; Tueth, 2000). The perpetrator’s actions may be based on “learned violence” or be modeled after the prior behavior of the elder person (Dessin, 2000). Where the perpetrator is a primary caregiver, caregiver stress has been cited as a cause of this abuse (Dessin, 2000). There are also a number of characteristics linked relatively uniquely to financial abuse. For example, the perpetrator may stand to inherit assets and feel justified in taking an advance or in exercising control over assets that are perceived to be almost or rightfully the perpetrator’s own (Dessin, 2000; National Committee for the Prevention of Elder Abuse, 2001). When the perpetrator is an heir, he or she may conclude that preemptive steps are necessary to prevent the inheritance from being exhausted in paying for medical or other expenses (National Committee for the Prevention of Elder

400 ELDER MISTREATMENT Abuse, 2001). Alternatively, negative attitudes toward persons identified as likely heirs may motivate the perpetrator to act to prevent them from acquiring the elder person’s assets (National Committee for the Prevention of Elder Abuse, 2001). Because of a prior negative relationship with the elder person, the perpetrator may feel a sense of entitlement to these re- sources as payback for prior exploitation or abuse (Dessin, 2000; National Committee for the Prevention of Elder Abuse, 2001). The perpetrator may be motivated by a sense that he or she should be reimbursed for having carried a substantial care-giving burden for the elder person (Dessin, 2000). The perpetrator may conclude that the elder person has more assets than needed and the perpetrator has too few, and thus the perpetrator is entitled to a share of the elder person’s assets (Quinn, 2000). Also, an intricate relationship may exist between elders and their caregivers. Older people, who may no longer place as great a value on their material possessions, may give gifts as a means of maintaining a power balance in their relationship with the caregiver. At the same time, the caregiver may indicate that such gifts are necessary if the elder person wishes to retain the caregiver’s atten- tion and assistance (Quinn, 2000). When such motivations are present, a perpetrator may read into an elder person’s words or behavior consent to a conveyance that a more objective perspective would not. The recipient of a gift may argue that the elder person provided implicit or explicit indications that the individual be given certain assets. When consent to a transfer of assets has been clearly provided and is not induced by fraud, duress, or undue influence, many assets can be transferred on a relatively informal basis.19 Because of the informal and private setting in which such transfers were purportedly made, the transfers may be the subject of good faith disputes but not represent financial abuse. However, individuals with the motivations described above may report consent to a transfer by an elder person that was not given or was not clearly provided, or attempt to induce this consent by fraud, du- ress, or undue influence. Nonrelative perpetrators have been found to include career criminals in the business of defrauding others in general and elders in particular, while others were overcome by greed under the circumstances (Choi et al., 1999). It has been observed that many exconvicts become paid caregivers for vulnerable individuals, a practice that goes unchecked because most states do not require criminal background checks and do not prohibit persons convicted of certain crimes from working with the elderly (Nerenberg, 2000c). 19Certain assets, including real property, require more formal means of conveyance such as written documentation of the transfer in ownership.

FINANCIAL ABUSE OF THE ELDERLY 401 As for the characteristics of the perpetrators, the NEAIS report con- cluded that the relative youth of perpetrators of financial abuse was par- ticularly striking compared to other types of abuse (National Center on Elder Abuse, 1998). This study found 45.1 percent of the perpetrators were age 40 or younger (versus 27.4 percent for all forms of elder abuse) and another 39.5 percent were 41 to 59 years of age. It also found 59 percent of the perpetrators were male (versus 52.5 percent for all forms of elder abuse). In addition, people who financially abuse the elderly are often family members, particularly adult children and grandchildren (National Center on Elder Abuse, 1996; Quinn, 2000; Rush and Lank, 2000; Sklar, 2000). The NEAIS report found that 60.4 percent of the substantiated 1996 APS financial abuse cases involved an adult child (versus 47.3 percent for all forms of elder abuse) and only 4.9 percent involved a spouse (versus 19.3 percent for all forms of elder abuse). In addition, it has been asserted that “crimes [by the elders’ offspring] go undetected or are discovered long after the assets have been depleted” (Sklar, 2000:21). A study of one county’s APS reports of financial exploitation found that roughly 40 percent of the perpetrators were the victim’s sons or daugh- ters, 20 percent were other relatives (only 1.5 percent were spouses), and 4 percent were not relatives (Choi et al., 1999). A related study found that spouses were perpetrators of financial exploitation in only 1.5 percent of cases as opposed to 13.8 percent of all other elder abuse cases (Choi and Mayer, 2000). This study also found, however, that nonrelatives were the perpetrators in 38.8 percent of the financial exploitation cases in contrast to only 14.7 percent of all other elder abuse cases (Choi and Mayer, 2000). Another report concluded that perpetrators are often relatives, particularly children or grandchildren of the victim, many of whom depend on the elderly victim for housing or other assistance, have substance abuse prob- lems, and are represented almost equally by both genders (Coker and Little, 1997). Tueth (2000) constructed from the literature two types of perpetrators of elder exploitation. The first type consisted of dysfunctional individuals with low self-esteem who may be abusing substances, psychosocially stressed, or suffering from caregiver burden. Such individuals will not seek out victims but instead passively take advantage of opportunities that present themselves. The second, more aggressive type methodically identi- fies victims, establishes power and control over them, and obtains the elder’s assets by using deceit, intimidation, and other forms of psychologi- cal abuse. Such individuals may have an antisocial personality disorder and have little regard for the rights of others. In a typical sequence, the victim is identified as impaired and vulnerable; the victim’s trust is secured by being friendly, helpful, and providing assistance; the victim is made passive

402 ELDER MISTREATMENT and comfortable and then isolated; and finally the perpetrator takes posses- sion of assets by employing psychological abuse. APPROPRIATENESS OF ADOPTING MODELS ADDRESSING CHILD AND SPOUSE ABUSE Societal attention to child abuse and spouse abuse20 predated the atten- tion given to elder abuse. The rising awareness of child abuse in the 1960s and that of spouse abuse in the 1970s have been cited as triggering societal awareness of the existence of elder abuse (Dessin, 2000).21 Preventive measures, reporting systems, and interventions designed to curtail child abuse frequently provided a model for efforts to address elder abuse (Capezuti et al., 1997; Gilbert, 1986; Kapp, 1995; Macolini, 1995; Nerenberg, 2000a; Wolf, 2000). As statutes were already in place that mandated child abuse reports and established service systems to redress such abuse when elder abuse was “discovered,” many states found it expe- dient to apply the same model to elder abuse as well (Anetzberger, 2000). One reason for using the same model is that child and elder abuse, whether physical or financial in nature, are difficult to detect because the victim may be reluctant or unable to report the abuse (Dessin, 2000), in part because the perpetrator is likely to be a family member (National Center on Elder Abuse, 1996). Also, the victims of both forms of abuse are frequently perceived as particularly vulnerable or sympathetic and in need of society’s 20The phrase “spouse abuse” also encompasses actions associated with wife assault, part- ner abuse, battered women, and domestic violence; is intended to refer to abuse between adults who live together in intimate relationships, regardless of their marital relationship and the gender of the partners; and remains the terminology used in a number of reporting statutes. 21Growing awareness of child abuse and the need for society to take steps to curtail it also led to increased efforts to address spouse abuse. Initially it was suggested that there were relatively direct parallels between child and spouse abuse in that in both the victims were relatively helpless captives of the abuser (a relationship sometimes suggested for elder abuse victims). Such a perspective led to legislation that mandates reporting by various individuals of suspected spouse abuse. However, this “infantilizing” of spouses has met considerable resistance. For example, the American Medical Association’s Council on Ethical and Judicial Affairs asserted that spouse abuse differs from child abuse in important respects and con- cluded that mandatory reporting of spouse abuse violated the ethical standards of confidenti- ality that physicians owe to their adult patients (Council on Ethical and Judicial Affairs, AMA, 1992). Rather than imposing mandatory reporting of spouse abuse, a number of other mandatory steps pertaining to spouse abuse have been suggested for treating physicians, including mandatory intensive domestic violence training for various specialties as part of medical education and requiring treatment plans and protocols that assist the medical team in identifying and responding to abuse (Council, 1992; Jecker, 1993).

FINANCIAL ABUSE OF THE ELDERLY 403 protection (Wolf, 2000; Anetzberger, 2000). Nevertheless, although a state may achieve a certain degree of efficiency when it builds on existing models and service delivery systems, as will be discussed, important distinctions caution against a whole-scale adoption of a child abuse model (AARP, 1993; Anetzberger, 2000; Brandl, 2000; Kapp, 1995; Kleinschmidt, 1997; Macolini, 1995; Vinton, 1991; Wolf, 2000), particularly when addressing the financial abuse of the elderly. Alternatively, some commentators argue that a spouse abuse model is better suited for crafting responses to elder abuse (Macolini, 1995; Pillemer and Finkelhor, 1988). However, as will also be noted, financial abuse of the elderly may represent a sufficiently distinct form of abuse that caution should likewise be exercised before applying a spouse abuse model to ad- dress it (Kleinschmidt, 1997). Means of Detecting Abuse Because of compulsory education, children of school age interact with people outside their home on a routine basis. Even younger children may regularly attend preschool or day care. These contacts result in individuals outside the home frequently being aware of a child’s health and well-being and being in a position to detect and report abuse. For many elder persons, such outside contacts may be sporadic and infrequent, which in turn re- duces the likelihood that elder abuse will be detected and reported. Indeed, an abuser of an older person may intentionally discourage or limit such contacts to diminish the likelihood of detection. Thus, unlike child abuse, a naturally occurring circle of individuals may not exist who can be encour- aged or required to watch for and report elder abuse (Choi and Mayer, 2000; National Center on Elder Abuse, 1998). Also, child abuse models focus heavily on physical abuse. Financial abuse is rarely an issue when a child is involved (Dessin, 2000).22 As noted, financial abuse is a frequent concern when the elderly are involved. More- over, the manner in which financial abuse occurs and its manifestations are often very different from that of physical abuse. Rather than acting out of rage or a loss of self-control, the perpetrator of financial abuse often acts in a very calculated fashion specifically designed to avoid detection. Also, physical abuse is more self-evident and more readily subject to proof than financial abuse. 22The closest analogy with regard to children would probably be the depletion of a child’s potential inheritance by a parent. However, unless a trust or similar fiduciary account estab- lished in the child’s name is being abused, parents are generally free to spend their assets, wisely or unwisely, however they desire even if it results in their children not receiving an inheritance from them.

404 ELDER MISTREATMENT In addition, the nature of the relationship between perpetrators of financial abuse and their victims may create an expectation by third parties that at least some financial resources will flow from the victim to the perpetrator and this may obscure detection of abuse (Dessin, 2000). In- deed, the perpetrator may feel entitled to the elder person’s assets and may point to the elder person’s apparent tacit consent in attempting to establish the legality of a transfer. Such consent is unlikely to be forthcoming or is relatively easily dismissed as ineffectual when physical abuse is involved. In general, third parties may be more likely to respond to and report instances of physical abuse than financial abuse. Within our society, vic- tims of physical violence tend to receive greater attention, sympathy, and support than victims of financial exploitation. For example, the victims’ rights movement, which in recent years has brought attention to the needs of victims of violent crime, has not similarly focused attention on the plight of victims of financial crimes (Nerenberg, 2000c). Also, children may elicit more sympathy and protection than the elderly and thus reports of their abuse may be more forthcoming.23 These factors suggest that models for detecting and preventing financial abuse of the elderly may need to be more proactive than models used to respond to child abuse. Decision-Making Capacity of Children and the Elderly Another reason for adopting a model for addressing financial abuse of the elderly that is relatively distinct from that used to respond to child abuse is that issues associated with the decision-making capacity of the elderly are quite different from those associated with children (Nerenberg, 2000a). Unlike children, elder persons at some point generally possessed the capac- ity to handle their financial affairs and exercised control over these affairs. All adults are presumed to possess this capacity unless shown otherwise in a legal proceeding. Until an elder person is determined to lack decision- making capacity, the elder person has the right to make what may seem to be poor or foolish financial decisions (Gilbert, 1986; Macolini, 1995; Wilber and Reynolds, 1996).24 In addition, to strip or limit the ability of elder persons to make such decisions can be psychologically devastating as it may represent for them the removal of the last vestige of independence and emphasize their physical and mental decline, which in turn may accelerate this decline (Dessin, 2000). As a result, many elder persons will actively 23It has been argued that 1 of 3 cases of child abuse is reported compared to 1 in 5 or 1 in 15 cases of elder abuse (Rosenblatt et al., 1996). 24As will be discussed below, an elder person, like all persons, is entitled to legal protection if a financial decision is the result of fraud or undue influence.

FINANCIAL ABUSE OF THE ELDERLY 405 resent and resist any steps to limit their financial independence (Macolini, 1995). For example, in Massachusetts approximately one-fifth of the elder persons for whom a report of abuse was filed refused a resulting offer of state services (Dessin, 2000).25 It should be noted that such reports are typically limited to relatively egregious incidents. Such data may suggest that intervention to address the financial abuse of the elderly should be limited to when there is fraud, duress, or undue influence or a clear lack of capacity to make an informed decision (Dessin, 2000).26 At a minimum, any model to prevent or remedy financial abuse of the elderly needs to take into account the fact that elderly victims are adults who in general previ- ously had complete autonomy over their financial transactions (Dessin, 2000).27 In particular, any such model needs to address whether and how to proceed when the elder person denies a need for assistance or resents or resists intervention (Capezuti et al., 1997). Second, determining when an elderly person lacks decision-making ca- pacity can be a difficult matter. Even if an elderly person intermittently experiences diminished capacity, he or she may in general retain decision- making capacity. Decision-making capacity among children is quite clearly, even if somewhat arbitrarily, demarked by the age of majority.28 For elder adults, decision-making capacity tends not to be an all-or-nothing concept. An individual with a cognitive impairment may have the capacity to make some decisions but lack capacity to make others. Also, this capacity may vary over time, with individuals having good days and bad days (Dessin, 25Macolini (1995) reported that 6 states and the District of Columbia require the consent of the elder person before commencing an investigation of a report of elder abuse and that 29 states and the District of Columbia specifically require the consent of the elder person before services can be provided. See also Shiferaw et al. (1994); in cases in which allegations of elder abuse were substantiated on investigation by APS staff and clients were offered protective services, 13 percent of the victims refused such services; Gilbert (1986); perhaps 40 percent of the older adults who health care professionals believed were abused refused intervention and services. 26Such refusals are honored in Massachusetts unless there appears to be coercion or a lack of capacity to make an informed consent (Dessin, 2000). Some may argue (although not without vigorous opposition) that physical abuse or neglect poses a more immediate threat to the well-being of the elderly and thus necessitates a more proactive model akin to that used for child abuse. 27For example, even if the cognitive capacity of elder persons has become limited, their personal involvement in these transactions may provide a valuable source of information that should not be ignored. 28There are certain circumstances defined by state law when a child who has not reached the age of majority is considered emancipated and is therefore considered to have capacity to make decisions on his or her own behalf. In addition, a few states have recognized a mature minor doctrine.

406 ELDER MISTREATMENT 2000; Langan and Means, 1996).29 Also, the diminishment of decision- making capacity is often a gradual process. Determining when individuals no longer have the capacity to make financial decisions for themselves is often difficult (Nerenberg, 2000a). The American legal system places great weight on the right of individu- als to make decisions for themselves, whether they be good or bad deci- sions, and limits when someone who has experienced a diminishment of decision-making capacity can have these rights curtailed. Furthermore, the definitions and elements of decision-making capacity tend to vary consider- ably (Nerenberg, 2000c). A general consensus has developed that an evalu- ation of incapacity should be based on an appraisal of the functional limi- tations of the person. However, what comprises a functional limitation and what this appraisal should be based on is frequently poorly articulated and inconsistently applied.30 In addition, a wholesale adoption of a child abuse model can contribute to the infantalization of the elderly and the perpetuation of ageism as the elderly are mistakenly assumed to be like children and to lack decision- making capacity (Capezuti et al., 1997; Gordon, 1986; Kapp, 1995; Macolini, 1995; Nerenberg, 2000a; Tueth, 2000). Physical decline does not necessarily correspond to significant mental decline and there is no evidence that advanced years or physical disability alone render a person incapable of making decisions (Gilbert, 1986; Wilber and Reynolds, 1996). Many, if not most, elderly individuals retain their capacity to make finan- cial decisions for themselves (Dessin, 2000). It has been noted that profes- sionals, especially nonhealth ones, often jump to the wrong conclusion that elderly people have dementia or otherwise lack decision-making capacity (Langan and Means, 1996). Elder persons may justifiably resent the impo- sition of a paternalistic model that appears to presume their lack of capac- ity, imposes supervision of their decisions, and seeks to make financial decisions on their behalf or delegate their decision-making authority to others (Kapp, 1995). 29Medication levels alone may induce a significant fluctuation in an individual’s decision- making capacity. 30This evaluation includes an appraisal of the individual’s ability to provide for his or her financial needs, to understand the issues being addressed, to communicate about these issues, to obtain needed financial assistance, to participate in the decisions being made, to under- stand the ramifications of these decisions, and to provide ongoing oversight of them. See, e.g., Dessin (2000); “The Uniform Probate Code focuses on the ability to make choices by defining incompetence as ‘lacking sufficient understanding or capacity to make or communi- cate responsible decisions.’”

FINANCIAL ABUSE OF THE ELDERLY 407 Impact of Differences Between Child Abuse and Financial Abuse of the Elderly As a result of the differences between child abuse and financial abuse of the elderly, models for redressing financial abuse of the elderly may need to adopt a different approach from that used in child abuse models. In light of the scarce amount of research on the topic, it is difficult to determine how a child abuse model might be usefully applied to the financial abuse of the elderly. If financial abuse of the elderly is more difficult to detect than child abuse, financial abuse of the elderly could necessitate a model that is more proactive in detecting and responding to instances of such abuse. Similarly, if research indicates that large numbers of egregious incidents of elder financial abuse go unreported or unaddressed under a child abuse model, more expansive measures than established under a child abuse model may be necessary to enhance the filing of financial abuse reports and their subsequent investigation. On the other hand, if research shows that victims of financial abuse find reports and subsequent interventions to be relatively invasive and re- pugnant, the reporting and investigation of financial abuse may need to be circumscribed more narrowly than is typical for child abuse. If research shows that most elderly persons resist or resent intrusion into their financial affairs, that most older persons have bona fide reasons for their resistance or resentment, or that most reports are not subsequently confirmed, argu- ably the criteria for reporting or undertaking an investigation of reported abuse should be narrowed from that applied to reports of child abuse. Under such circumstances, greater weight may need to be given to the wishes of purported victims and their right to enter into or remain in what appear to be abusive interactions (Dessin, 2000). As current research, albeit relatively scanty, tends to show support for both of the above scenarios, a dichotomous model relatively unique to financial abuse of the elderly may be needed. A paternalistic model (similar to that used for child abuse) might be applied to elder persons for whom a determination can be made that there is a lack of financial decision-making capacity. However, a less paternalistic model would be used for those elderly persons for whom such a determination cannot be made. For the former, the parens patriae rationale associated with the child abuse model is arguably more fitting, justifying vigorous efforts to monitor their vulner- ability to financial abuse and to enhance the reporting and investigation of potential abuse. For the latter, our legal system dictates that such individu- als be presumed to know what is in their best interests. Even if a transfer of resources seems unjustified or inequitable to a third party, reporting and intervention would be limited to when there is an indication of fraud, duress, undue influence, or the like. Of course, determining when an

408 ELDER MISTREATMENT individual lacks financial decision-making capacity can be a difficult matter (unlike for children, where age provides a blunt but clear dividing line) and additional research would be needed to establish how this can or should be done on a routine basis. Nevertheless, there are elderly persons for whom there is clearly a lack of financial decision-making capacity and for whom the dichotomy can clearly be applied. Applicability of the Spouse Abuse Model to Financial Abuse of the Elderly A number of commentators have argued that financial abuse of the elderly should be viewed as a form of domestic violence and that legislative models targeting spouse abuse better address its dynamics and serve its victims (AARP, 1993; Brandl, 2000; Brandl and Meuer, 2000; Heisler, 1991; Vinton, 1991, 1999; Vinton et al., 1997).31 For empirical support, an elder abuse survey conducted by Pillemer and Finkelhor (1988) is prima- rily and widely cited (see AARP, 1993; Vinton, 1991, 1999; Vinton et al., 1997). Pillemer and Finkelhor (1988) asserted that their research on elder abuse indicates that spouse abuse provides a better model for understand- ing and addressing elder abuse than does child abuse.32 They argued that a child abuse model has been widely, but inappropriately, employed in responding to elder abuse because it was initially believed that elder abuse is intergenerational in nature. They contested this assumption based on their research findings that spouses were more likely to be perpetrators of elder abuse than adult children of the victim (58 percent versus 24 percent, 31The following discussion focuses on the applicability of a spouse abuse model to finan- cial abuse of the elderly. A similar debate has focused on whether this model provides a better fit for elder abuse in general. See AARP (1993); Brandl (2000); Brandl and Meuer (2000); Heisler (1991); Nerenberg (2000a); Vinton (1991, 1999); and Wolf (2000). Al- though the debate continues, a number of commentators have rejected sole reliance on both caregiver stress (which is cited as providing a rationale for adopting the child abuse model) and caregiver violence (which is cited as providing a rationale for adopting a spouse abuse model) in favor of an approach that views elder abuse as encompassing a range of factors that may or may not be present in any given case and that invokes different models depending on the specific circumstances involved (Anetzberger, 2000; National Center on Elder Abuse, 1996; Nerenberg, 2000a; Ramsey-Klawsnik, 2000; Wolf, 2000). 32Pillemer and Finkelhor (1988) argue that shifting from an underlying child abuse model to a spouse abuse model would (1) better inform service providers about situations in which elder abuse is likely to occur, (2) help educate elders that abuse by a spouse is inappropriate and encourage them not to accept it, and (3) better shape services provided in response to elder abuse along lines already provided to abused spouses, such as battered women’s shelters and self-help groups.

FINANCIAL ABUSE OF THE ELDERLY 409 respectively) and that there was no statistically significant difference in the seriousness of the abuse inflicted by these two groups of perpetrators. However, Pillemer and Finkelhor did not include financial abuse in their definition of elder abuse. Thus, they did not examine its occurrence and did not determine whether spouses or adult children of the victims were more likely to be perpetrators of financial abuse. In contrast, as noted above, the NEAIS report found that 45 percent of the perpetrators of financial abuse were age 40 or younger and only 4.9 percent of the inci- dents involved a spouse (National Center on Elder Abuse, 1998). In addi- tion, Choi and Mayer (2000) found that spouses were the perpetrators of financial exploitation in only 1.5 percent of all financial exploitation cases. It has been widely asserted that it is adult children and grandchildren of the elderly that are particularly likely to perpetrate financial abuse (Coker and Little, 1997; Quinn, 2000; Rush and Lank, 2000; Sklar, 2000). In addition, the underlying dynamic provided by Pillemer and Finkelhor (1988) to explain the occurrence of the forms of elder abuse they studied (physical abuse, psychological abuse, and neglect) further suggests that a spouse abuse model may not be appropriate for addressing financial abuse of the elderly. They argued that an elder person is most likely to be abused by the individual with whom the elder person lives. They reasoned that the higher proportion of elder abuse committed by spouses reflected the fact that many more elders live with their spouses than with their children. However, as discussed, a frequently identified precursor of financial abuse of the elderly is their social isolation and, in particular, their living alone (Hwang, 1996; National Committee for the Prevention of Elder Abuse, 2001; Podnieks, 1992; Quinn, 2000; Rush and Lank, 2000). Victims of financial abuse are more likely to be widowed and to report they have no one to help them in the event of illness or disability, while victims of physical violence tend both to be married and to be living with their abuser (Choi et al., 1999; Podnieks, 1992). These findings further suggest that a spouse abuse model may be inappropriate when developing responses to financial abuse of the elderly. Finally, spouse abuse models have focused heavily on curbing physical violence (Moskowitz, 1998b). Not surprisingly, these models center on the physical injuries such violence is likely to produce and the need to promote the safety of victims and means by which such injuries can be reduced (Brandl, 2000; Council, 1992; Klingbeil and Boyd, 1984; Vinton, 1991). The financial abuse of spouses has been a relatively minor concern. Al- though some commentators assert that financial abuse of the elderly almost always occurs in conjunction with physical abuse (Vinton, 1991), there is little research that has addressed this issue and what there is suggests the contrary (Podnieks, 1992). In general, the applicability of a spouse abuse model has not been tested with older women (Nerenberg, 2000a) and the

410 ELDER MISTREATMENT “cycle of violence” that forms a foundation for the spouse abuse model may have limited applicability to the financial abuse of the elderly. While a spouse abuse model may be appropriate when addressing the physical abuse of the elderly, as well as a subset of financial abuse cases when physical violence and financial abuse coexist, the spouse abuse model (like the child abuse model) does not appear to provide a comprehensive explanatory model for financial abuse of the elderly.33 A more eclectic approach that focuses on the relatively unique aspects of financial abuse of the elderly may be more appropriate. Among the specific factors that such an approach might encompass are the intergenerational nature of this abuse and tensions likely to occur across generations; the impact of financial dependence on these tensions; whether and when physical abuse and vio- lence tend to accompany financial abuse and their impact; the nature and impact of more subtle forms of influence than violence; whether elder victims of financial abuse perceive the perpetrators of this abuse differently than perpetrators of physical abuse; and whether financial abuse is more likely to reflect mismanagment, financial need, or greed rather than a desire for power and control and the influence they exert on the manifestations of financial abuse. At the same time, such a model (and accompanying re- search) should also attend to the potential influence of factors typically associated with spouse abuse models such as the impact of power and control on financial abuse, victims’ incorporation of internalized messages that they are to blame for this abuse, victims’ fear of retaliation if they disclose their abuse, and social contexts that may lead an elder person to fear disruption of the status quo (Vinton, 1999). REPORTING STATUTES Forty-four states and the District of Columbia have enacted statutes that mandate the reporting of elder abuse by certain individuals, with the other states providing for the voluntary reporting of such abuse (Stiegel, personal communication, October 2001).34 Although virtually all states specifically mention financial abuse in their reporting statutes (Moskowitz, 1998b; Roby and Sullivan, 2000), they often do not establish special proce- dures for the reporting and subsequent processing of reports of financial 33Indeed, the American Medical Association’s Council on Ethical and Judicial Affairs has asserted that spouse abuse differs from elder abuse (and child abuse) in opposing mandatory reporting of spouse abuse by physicians (Council on Ethical and Judicial Affairs, 1992). 34Reporting is voluntary in Colorado, New Jersey, New York, North Dakota, South Da- kota, and Wisconsin (Brandl and Meuer, 2000).

FINANCIAL ABUSE OF THE ELDERLY 411 abuse.35 States with mandatory reporting generally impose penalties, such as fines, imprisonment, or license revocation, if reporting does not occur within a specified time period following discovery of the abuse (Capezuti et al., 1997; Kapp, 1995; Macolini, 1995; Marshall et al., 2000; Moskowitz, 1998b), although enforcement is generally lax (Heisler and Quinn, 1995; Roby and Sullivan, 2000). According to Roby and Sullivan (2000), almost half of these states have universal mandatory reporting, while the other states limit mandatory reporting to specifically identified categories of pro- fessionals. Reporting is frequently mandatory for certain professionals, such as police officers, social workers, welfare and mental health workers, nursing home employees, and licensed health care providers, and permis- sive for all others (Dessin, 2000). In several states, certain professionals who have a confidential relationship with the elder person (e.g., clergy, physicians, lawyers, and therapists) are exempt from reporting, while other states require reporting notwithstanding conflicting confidentiality rules (Roby and Sullivan, 2000). The professionals mandated to provide reports vary from state to state (Moskowitz, 1998b).36 States typically provide good faith immunity for the reporter, regard- less of whether abuse is confirmed and regardless of whether the reports came from a mandatory or a voluntary reporter (Capezuti et al., 1997; Moskowitz, 1998a; Roby and Sullivan, 2000). In most states, professionals who report abuse are also protected by disclosure confidentiality laws that prohibit the disclosure of the identity of the person who provided the report without that person’s written consent (Marshall et al., 2000; Moskowitz, 1998a). States vary as to when a report is required, with most states having a more stringent standard for individuals having contact with the elderly in their professional capacity and a generic standard for everyone else (Roby and Sullivan, 2000). Reports are generally directed to an agency authorized to initiate an investigation, with this investigation to be started within a specified time period (Moskowitz, 1998b; Roby and Sullivan, 2000). If the agency that received the report is not a law enforcement agency, it will turn the matter over to a criminal justice agency if it determines that a crime might have been committed, although some states require that a competent victim give permission to proceed (Henningsen, 2001; Roby and Sullivan, 2000). In 35But see Wisconsin where investigations of reports of material financial abuse must begin within five business days, while investigations of other forms of elder abuse must begin with 24 hours (Henningsen, 2001). 36At least 20 types of professionals are listed as mandatory reporters in the various states, including ambulance drivers, attorneys, bank personnel, chiropractors, clergy, and dentists (Moskowitz, 1998b).

412 ELDER MISTREATMENT addition, typically an agency is empowered to coordinate the provision of services for the elderly person determined to be at risk and to intervene to protect endangered individuals (Moskowitz, 1998b). Sources of Reports Third parties, not the victims themselves, are the most likely to report elder abuse in general (Choi and Mayer, 2000; Lavrisha, 1997; Moskowitz, 1998b; Tueth, 2000). The NEAIS review of substantiated APS reports in 1996 found that 25.7 percent of the reports came from hospitals, physi- cians, nurses, and clinics, 20 percent came from family members, 14.8 percent came from in-home or out-of-home service providers, 11.3 percent came from the police or sheriff, 9.1 percent came from friends or neighbors, and only 8.8 percent came from the victims (National Center on Elder Abuse, 1998). Most mandatory elder abuse reports appear to come from health-care providers, including home health-care providers, and family, friends, or neighbors of the victim (Rosenblatt et al., 1996; Wolf and Pillemer, 1989).37 For financial abuse, the NEAIS review found that the three most fre- quent reporters were friends and neighbors (15 percent), hospitals (14.2 percent), and family members (14 percent). Choi et al. (1999) found that two-thirds of the reports of suspected financial exploitation to an APS agency were made by social service or health care providers and one-third were made by other individuals, including relatives, friends, neighbors, landlords, law enforcement agencies, and banks. Choi and Mayer (2000) in a subsequent analysis determined that only 1.4 percent of the reports of elder abuse came from the victims, a figure that did not significantly vary when the focus was only financial exploitation cases. It has been claimed that health care providers, particularly practitioners involved in the long-term care of the elderly, are in a unique position, perhaps the best position, to detect the financial abuse of the elderly (Bernatz et al., 2001; Hwang, 1996; Tueth, 2000). For example, it has been sug- gested that such practitioners may have the best opportunity to meet pri- vately with the elder person outside the presence of a caregiver; may be asked for financial help or advice; may be likely to learn about an inability to pay for important services such as medical care; may learn that patients 37But compare Shiferaw et al. (1994); in a study of all reports of elder abuse over a three- year period to a county APS unit in North Carolina, the most referrals came from service agencies (32 percent), followed by family members (26 percent); Kleinschmidt (1997); “Physi- cians infrequently report elder abuse, despite being ‘in an ideal position to recognize, manage, and prevent elder mistreatment.’”

FINANCIAL ABUSE OF THE ELDERLY 413 have been forced to sign documents, provide loans or gifts, or sign docu- ments they did not understand; may determine the elder person executed a power of attorney when the person lacked the mental capacity to do so; may notice suspicious companions and their relationship with the elder person; or may detect neglect that reflects financial abuse (Bernatz et al., 2001; Hwang, 1996; Lachs and Pillemer, 1995). It has been suggested that health care providers affirmatively ask patients whether they are being taken advantage of in any way (Bernatz et al., 2001; Lachs and Pillemer, 1995). It has also been asserted that adding financial institutions to the list of mandatory reporters could “prove a valuable weapon against [financial] abuse” (Coker and Little, 1997:4). Similarly, lawyers have been identified as having a central role to play in identifying and preventing financial abuse of the elderly (Moskowitz, 1998a). On the other hand, a report by the U.S. General Accounting Office concluded that increasing public and professional awareness of the exist- ence of elder abuse was more important in identifying cases of elder abuse than reporting requirements and, although reporting laws are moderately effective in case identification, these laws were not effective in preventing first occurrences of elder abuse or treating substantiated cases (U.S. General Accounting Office, 1991). The U.S. General Accounting Office concluded that focusing the debate on the relative effectiveness of mandatory versus voluntary reporting was of questionable value (U.S. General Accounting Office, 1991). The U.S. General Accounting Office did not specifically address financial abuse, but it did include “material or financial exploita- tion” within its definition of elder abuse (U.S. General Accounting Office, 1991). In general, although not typically posed in the context of financial abuse, controversy has raged over whether elder abuse should be subject to mandatory reporting (Capezuti et al., 1997; Gilbert, 1986; Kapp, 1995; Kleinschmidt, 1997; Macolini, 1995; Moskowitz, 1998b; Podnieks, 1992; Roby and Sullivan, 2000). Barriers to Reporting As discussed, there is a wide consensus that elder abuse in general is greatly underreported (Coker and Little, 1997; Dessin, 2000; Marshall et al., 2000; Moskowitz, 1998b; National Center on Elder Abuse, 1996, 1998; Pillemer and Finkelhor, 1988; Wolf, 2000).38 Although little data are 38But see Reis (2000), “It is also true that a seeming abuse is sometimes revealed as more benevolent when examined closely” (p. 13).

414 ELDER MISTREATMENT available on this point, there seems to be a general view that financial abuse of the elderly is perhaps even more likely to go unreported and thus unde- tected (Hwang, 1996; Wilber and Reynolds, 1996). For example, although it is frequently asserted that bank employees are particularly well posi- tioned to detect financial abuse of the elderly (Coker and Little, 1997), a survey of a small number of banks in New York City found that 43 percent of the banks said they never reported financial abuse of the elderly to APS and 14 percent reported it only sometimes (Heisler and Tewksbury, 1992). Reporting statutes rely on and are designed to encourage reports of elder abuse. A number of reasons have been given for this underreporting. One potential source of reports is the victims themselves. As noted, victims are relatively unlikely to report financial abuse (Choi and Mayer, 2000; Kleinschmidt, 1997; National Center on Elder Abuse, 1998; Podnieks, 1992), reportedly more so than for other forms of elder abuse (Podnieks, 1992). Not surprisingly, one set of reasons for underreporting focuses on the characteristics of the victimized elder person. For example, the elder person may be embarrassed at falling victim to financial exploita- tion and may desire to avoid looking like a person who was too trusting (Coker and Little, 1997; Dessin, 2000; Hwang, 1996; Nerenberg, 2000c; Wilber and Reynolds, 1996). Similarly, elder persons may not want to report the financial abuse for fear it will suggest that they are having problems managing their affairs and provide a rationale for placement in a nursing home or the institution of a guardianship (Hwang, 1996; Nerenberg, 2000c). The elder person may also fear change and prefer the status quo, regardless of its deleterious nature (Dessin, 2000). Elder persons may hold a view that some level of abuse is normal. For example, they may have a self-identity that they are weak or undeserving or a burden to others and thus may expect to be taken advantage of by others (Dessin, 2000). Alternatively, they may have prior experience living in an abusive environment where they witnessed abuse, were abused, or abused others and thus do not consider it abnormal (Dessin, 2000). Because victims are often induced to cooperate in their own exploita- tion, they may believe that they are fully or partially to blame for their victimization (Nerenberg, 2000c). Alternatively, if the financial abuse has an impact on other family members, elder persons may be blamed for or feel responsible for the consequences (Deem, 2000). They may also be concerned that they will become a burden to their family as a result (Hwang, 1996). The elder person may not realize that abuse occurred or that financial abuse is a crime that can be reported (Coker and Little, 1997; Deem, 2000; Wilber and Reynolds, 1996). Elder persons may also have an impairment that prevents them from reporting the abuse or from recognizing its exist- ence (Dessin, 2000; Gordon, 1986; Smith, 1999).

FINANCIAL ABUSE OF THE ELDERLY 415 A second set of reasons traces underreporting to the nature of the interaction between the victim and the perpetrator of financial abuse. A widely cited reason is the reliance of the victim on the perpetrator for support and care, a notion often planted and nurtured by the perpetrator, and a fear of losing this support and care (Dessin, 2000; Smith, 1999). The elder person may also fear the perpetrator, including a fear of retaliation that is heightened the more abusive the relationship is (Deem, 2000; Gor- don, 1986; Hwang, 1996; Smith, 1999). The elder person may be reluctant to turn in a family member or someone with whom they feel a close bond (Coker and Little, 1997; Dessin, 2000; Nerenberg, 2000c; Wilber and Reynolds, 1996). Even if abusive, there may be a close personal relation- ship between the victim and the perpetrator (Smith, 1999). The victim may be unwilling to report financial abuse because it tends to be the result of a relationship gone wrong or a betrayal of trust rather than outright theft (Coker and Little, 1997; Wilber and Reynolds, 1996). Also, the elder person may feel a sense of responsibility for the perpetrator’s actions, par- ticularly in the case of a family member (Dessin, 2000). A third set of explanations for underreporting identifies barriers associ- ated with the system designed to receive and respond to such reports. For example, the elder person may be unaware of where to turn for help and how to initiate a report (Deem, 2000; Dessin, 2000). Similarly, the elder person may lack access to these channels, as when a perpetrator prevents the victim from leaving a residence or using a telephone (Dessin, 2000). It is also widely considered difficult for outsiders to detect financial abuse and thus to discern a need for such a report (Choi et al., 1999; National Center on Elder Abuse, 1998). Abuse may be relatively invisible to outsiders, particularly as it may unfold slowly, involve elders who are socially iso- lated, and not leave immediate, visible signs (Choi et al., 1999; Gordon, 1986). As discussed above, an alternative source of such reports are various professional groups. However, the members of these groups have also been slow to report financial abuse of the elderly (Hwang, 1996). A number of explanations for this reluctance have been provided. For example, detect- ing financial abuse can be difficult, particularly when interactions are brief or where the individual does not have an expertise in financial affairs. Moreover, professionals may resist reporting because of a fear of being incorrect, because definitions are vague and ambiguous, or because of a fear of liability for filing incorrect reports (Lachs and Pillemer, 1995; Marshall et al., 2000; Sugg and Inui, 1992). Also, they may be unfamiliar with the reporting system and the implications and impact of filing reports (Lachs and Pillemer, 1995). Outsiders may not report financial abuse of the elderly because of their fear of getting involved in the “opening of a Pandora’s box” (Sugg and Inui, 1992) or because the victim denies abuse

416 ELDER MISTREATMENT occurred (Marshall et al., 2000). Finally, the perpetrator may prevent the professional from spending time alone with the elder individual (Paris et al., 1995). Health care providers are one professional group whose reluctance to report financial abuse of the elderly has received considerable attention (Kleinschmidt, 1997). Physicians have been found to be most likely to report physical abuse and the least likely to report financial abuse (Rosenblatt et al., 1996). Health care providers may fear that raising concerns will offend or insult the patient, perhaps by impugning their finan- cial competence, or invade the patient’s privacy (Marshall et al., 2000). They may consider it an inappropriate topic for them to raise or believe that it goes beyond the scope of the evaluation provided (Lachs and Pillemer, 1995; Marshall et al., 2000; Tueth, 2000). Also, they may cite their busy schedules, particularly when it requires addressing a relatively complicated topic in a short period of time, or their lack of expertise and the absence of reliable standardized protocols for discerning whether finanancial abuse is present (Marshall et al., 2000; Rosenblatt et al., 1996). Also, they may believe financial abuse of the elderly occurs relatively infrequently among their patients39 or that they are being asked to do too much already within the relatively short time they meet with patients (Rosenblatt et al., 1996; Sugg and Inui, 1992). Furthermore, it has been suggested that health care providers do not report financial abuse because they are uncertain as to where to make a report, believe it will not make a difference, or rationalize away its existence (Beck and Phillips, 1984). Although, as noted, some argue that health care professionals are well situated to detect and report financial abuse (Lachs and Pillemer, 1995; Paris et al., 1995), others argue that considering the many barriers faced, there are better ways by which physicians can serve their patients (e.g., by recommending the establish- ment of a guardianship or power-of-attorney when they identify that funds are being misappropriated) (Tueth, 2000). Reliability of Reports At the same time, studies have indicated that a relatively high percent- age of elder abuse reports in general and reports of financial abuse of the elderly in particular are not substantiated following investigation (i.e., they 39This may be the case for emergency rooms. Fulmer and colleagues (1992), in a six- month study of the charts of elders seen in a hospital emergency department, found 3.4 percent of the patients suffered from neglect, 2.3 percent from abuse, 0.4 percent from violent crime, 0.2 percent from abandonment, and only 0.05 percent from exploitation. Arguably, however, this may be an unlikely setting for detecting financial abuse in elders and if relevant questions were not asked such charts are unlikely to reflect its occurrence.

FINANCIAL ABUSE OF THE ELDERLY 417 are false positives).40 For example, the national NEAIS report found that financial abuse reports to APS agencies were relatively unlikely to be sub- stantiated (National Center on Elder Abuse, 1998). Only 44.5 percent of these reports from 1996 were substantiated, as opposed to 61.9 percent of physical abuse reports, 56 percent of abandonment reports, and 54.1 per- cent of psychological abuse reports. Only neglect reports (41 percent) were less likely to be substantiated.41 There may be a discrepancy between how an elder person perceives an act and how a third party, including a professional, perceives it (Shiferaw et al., 1994). It has been suggested that individuals who report elder abuse may be influenced by circumstantial evidence that is not confirmed on investigation (Shiferaw et al., 1994). An elder person may consider a financial conveyance to be a reward to someone for services rendered or kindnesses provided, while an outsider may find the gift to be out of all proportion to the nature of the service or kindness. Because professionals are often assigned responsibility to report suspected instances of financial abuse of the elderly, it is important that a professional’s classification of behavior as abusive correlate at least to some degree with that of the older person (Marshall et al., 2000). As discussed, elder persons often refuse to cooperate with investigations triggered by reports of elder abuse or refuse offered services (Dessin, 2000; Kleinschmidt, 1997; Gilbert, 1986; Shiferaw et al., 1994), with one possible explanation being that they do not agree that what occurred was abuse.42 Financial disputes, particularly among family members, tend to involve complicated interactions in which there may be conflicting perspectives on the appropriateness of the actions taken. Professionals reporting elder abuse may fail to evaluate the elder person’s situation adequately (Capezuti et al., 1997). Also, commentators have argued that cultural differences may result in misperceptions of whether a given financial transaction constituted abuse (Brown, 1999; Griffin, 1999; Hall, 1999; Hudson and Carlson, 1999; Marshall et al., 2000; Moon, 2000; Nerenberg, 2000a; Sanchez, 1996; Wilber and Reynolds, 1996).43 40In general, it has been argued that what seems to be elder abuse may be more benevolent in nature on close examination (Reis, 2000). 41Another study found that 76 percent of the reports of elder abuse referred to an APS unit were not confirmed and, although the exploitation of resources was the most likely type of abuse to be confirmed, only 46 percent of those reports were confirmed (Shiferaw et al., 1994). 42Other explanations provided, as discussed above, are shame or embarrassment over their abuse, fear of reprisals by the perpetrator, reluctance to get a family member in trouble, guilt for causing family tensions, or fear of institutionalization (Gilbert, 1986). 43For example, cultural differences have been found to exist for Mexican-American, Ko- rean-American, African-American, and Native American communities (Brown, 1999; Moon, 1999; Nerenberg, 1999a).

418 ELDER MISTREATMENT When viewed in conjunction with the barriers discussed above that limit the filing of such reports, it is likely that the elder abuse reporting system results in both an overreporting (i.e., false positives) and underreporting (i.e., false negatives) of financial abuse of the elderly. OTHER SYSTEMIC POST-ABUSE RESPONSES In part because of the many forms financial abuse of the elderly can take, commentators have noted the difficulty of crafting a response system that adequately redresses such abuse and deters its subsequent occurrence (Dessin, 2000). Because there is no federal statute that deals directly with financial abuse of the elderly, the issue has instead been addressed seriatim by the various states. It is not surprising that legislative measures for responding to financial abuse have often been criticized as piecemeal (Dessin, 2000). There has also been little systematic evaluation of these various measures and virtually no comparisons of their relative effective- ness. As will be discussed, drawbacks and limitations for each of them have been identified by commentators reviewing them. It has also been noted that the legal system would likely be overwhelmed if it was seen as the primary means of handling the financial affairs of even elder persons who lack decision-making capacity (Langan and Means, 1996). Nevertheless, most states have a range of measures available for responding to financial abuse of the elderly and new measures are being instituted (Stiegel, 2000). Administrative/APS Agencies All states have adopted some form of adult protective services law that enables state agencies to offer remedies to victims of elder abuse (AARP, 2001) and each state generally has an APS agency designed to prevent and address problems the elderly may face (Dessin, 2000).44 These agencies focus on maintaining a system for receiving reports of mistreatment, inves- tigating cases, and providing protection or assistance to the elder person rather than punishing the perpetrator (Moskowitz, 1998b; Otto, 2000; Roby and Sullivan, 2000). They generally can take steps to protect the elder person from further abuse, including obtaining protective orders and the initiation of a guardianship to place the assets of the elder person in the hands of a guardian (Capezuti et al., 1997; Dessin, 2000). Advocates for the elderly complain that the federal government has inappropriately reduced the financial assistance it gives the states to de- velop and maintain protective services for the elderly and should be more 44One exception is North Dakota, which has an APS law but does not have a functioning APS program (Stiegel, personal communication, October 2001).

FINANCIAL ABUSE OF THE ELDERLY 419 actively involved (AARP, 2001; Moskowitz, 1998b; Otto, 2000). Also, concerns have been raised about state failures to designate an agency with primary responsibility for preventing, investigating, and responding to el- der abuse and about the inadequate funding, staffing, and training of such agencies (Capezuti et al., 1997; Dessin, 2000; Macolini, 1995). Victims Services Network A number of commentators have noted the limited availability of the victim services network for elderly victims of financial abuse and the lack of resources made available to them. Because these services have historically been targeted for victims of violent crime, it has been asserted that victims of financial abuse are treated like “second class victims” in the victim services network (Deem, 2000). In some states, restitution, case status notification, and prison release information are available only to victims of violent crimes (Deem, 2000). Similarly, it has been asserted that state social service programs are generally underequipped to educate the elderly about financial abuse prevention, to provide prevention services, to address the emotional needs of financial abuse victims (e.g., by providing support groups and counseling), to provide restitution advocacy or to help victims recover their losses, to supply emergency funds, and to otherwise provide needed services (Deem, 2000; Nerenberg, 2000c). Furthermore, there is a lack of referral programs to assist victims to locate services designed to assist them (Deem, 2000). Some states have fiduciary abuse specialist teams (FASTs), which consist of an interdisciplinary group of representa- tives from law enforcement, adult protective services, the office of the public guardian, the prosecutor’s office, health and mental health provid- ers, and expert financial and legal consultants to help victims recover or to prevent further loss of their assets (Bernatz et al., 2001; Heisler, 2000).45 Of those programs that have been established to assist victims of financial crimes, little systematic evaluation has been conducted of their availability, impact, or effectiveness. Although Congress in 1984 created the Victims of Crime Act Fund (VOCA) to assist crime victims, victim compensation funds provided through state programs established under this legislation were until recently available only to victims of violent crimes. In 2001, the Office for Victims of Crime (OVC), United States Department of Justice, issued revised guide- lines for implementation of the crime victim compensation grant program (OVC, 2001). Although OVC had been lobbied to specifically encourage 45For a brief summary of 12 programs designed to assist victims of financial crimes, see Deem (2000).

420 ELDER MISTREATMENT states to include economic crime as a compensable crime category and had initially included language to that effect, in its final guidelines the OVC instead noted in its preamble to the guidelines that economic crime (includ- ing financial fraud of the elderly) was one of four emerging trends and that states should consider covering the unmet needs of these crime victims. Although the text of the guidelines clarifies that VOCA does not prohibit coverage of nonviolent crimes, the guidelines also reiterate that the priority under VOCA continues to be coverage for victims of violent crime. In addition, although financial counseling services for victims of economic crime is an allowable compensable expense, the guidelines specify that compensation grants cannot generally be used to redress property damage and loss, a form of compensation particularly relevant to victims of finan- cial abuse. Furthermore, only as of 1997 could victim assistance programs funded under VOCA serve victims of financial crimes (Deem, 2000). The absence of a reference to financial victims in the proposed Victims’ Rights Constitu- tional Amendment has been cited as symbolic of their second-class status (Deem, 2000). Criminal Investigations and Prosecutions Following a report of elder abuse, a local APS agency generally con- ducts an investigation and if criminal behavior is suspected refers the matter to a local prosecutor’s office, which will typically undertake an investiga- tion of its own. Alternatively, a law enforcement agency that has received a report of elder abuse may also conduct an investigation and subsequently refer the matter for prosecution. The successful prosecution of financial abuse of the elderly has been characterized as rare (Wilber and Reynolds, 1996), with few prosecutions extending beyond the investigatory phase and most cases being closed due to lack of evidence (Heisler, 2000; Hwang, 1996). It has been asserted that the criminal justice system provides little deterrence to the commission of financial abuse of the elderly (Hwang, 1996). The extreme difficulty in detecting and proving abusive transactions has been widely noted (Coker and Little, 1997; Dessin, 2000; Heisler and Tewksbury, 1992). A number of barriers have been identified as impeding these investigations and prosecutions.46 For example, the initial task of defining financial abuse has been char- acterized as “daunting” (Dessin, 2000). Evaluating whether financial abuse occurred often requires complex and subjective determinations to distin- 46For a description of some specialized law enforcement and prosecutor units established to address financial abuse and promising criminal justice practices, see Heisler (2000).

FINANCIAL ABUSE OF THE ELDERLY 421 guish between acceptable transactions and exploitative conduct and to sepa- rate misconduct from mismanagement (Central California Legal Services, 2001). Unlike physical abuse or neglect, the manifestations of financial abuse are generally not immediately evident and discoverable (Dessin, 2000). There is a general attitude that outsiders should not meddle in the financial affairs of another (Dessin, 2000). As discussed, the victim is frequently reluctant to report the abuse or may have been unaware of its occurrence (Deem, 2000; Dessin, 2000). Voluntarily or involuntarily, the management of the victim’s financial affairs may have been entrusted to another. The perpetrator may have taken steps to hide the abuse from the victim, or the victim may lack the capacity to recognize that the acts taken constituted financial abuse (Dessin, 2000). Compounding the problem is that financial abuse generally occurs in a private setting, enhancing the difficulty of detec- tion (Dessin, 2000). Another barrier is that the victims’ diminished mental capacity may make it unclear whether they understood and consented to the financial transaction (Central California Legal Services, 2001). Alternatively, it can be difficult to determine whether the elder person was the victim of unfair persuasion or coercion (Central California Legal Services, 2001). As one commentator has noted, “in a relationship in which one person is likely to want to give and the other is likely to feel an entitlement to receive, how can the law identify improper transactions?” (Dessin, 2000:213). Officials responsible for investigating and prosecuting financial abuse must often review and evaluate complex records, frequently without the assistance of a witness capable of testifying or willing to testify (Dessin, 2000). Relevant documents may be in the hands of perpetrators or may have been destroyed (Nerenberg, 2000c). Bank officials may resist releas- ing records because of fear of breaching privacy or confidentiality laws (Nerenberg, 2000c). Investigating and prosecuting financial abuse typically requires exper- tise across a range of subject areas, and most law enforcement personnel and many prosecutors lack this expertise, with training in these areas often not provided and rotation through assignments preventing the acquisition of needed knowledge (Coker and Little, 1997; Nerenberg, 2000c). As a result of a lack of expertise, responsible officials may fail to recognize financial abuse or to pursue it effectively (Nerenberg, 2000c). Alterna- tively, officers and prosecutors with expertise may be inundated with such cases and forced to prioritize and limit the scope of their efforts (Nerenberg, 2000c). Also, officials often view financial crimes as strictly civil matters and discourage their prosecution (Nerenberg, 2000c). Alternatively, they may perceive them as less serious or important than violent crimes and give them

422 ELDER MISTREATMENT low priority (Nerenberg, 2000c). Financial crimes may also be given a low priority because investigating and prosecuting financial abuse can be ex- tremely labor-intensive and time consuming. In addition, most police and prosecutors’ offices lack adequate resources for handling complex financial crimes. Advocates for the elderly argue that federal agencies should assist the states in prosecuting elder abuse (AARP, 2001). Prosecutors may be unwilling to pursue such cases because the elderly may be poor witnesses, particularly if because of diminished mental capac- ity they are unable to recall details of the crime (Nerenberg, 2000c; Oh, 1999). Particularly frail victims are likely to decline, become incapacitated, or die during the course of what are often protracted proceedings (Nerenberg, 2000c). Elders may find the criminal justice system incompre- hensible and inaccessible, particularly when the individual has a physical or mental disability (Nerenberg, 2000c). Calls have been made for improved communication with victims throughout the criminal justice process (Deem, 2000). Even when a report has been received and an investigation is proceed- ing, the perpetrator may continue to deplete the elder person’s assets be- cause many states have inadequate laws to freeze the victim’s assets or to limit the perpetrator’s ability to access those assets during the investigation (Nerenberg, 2000c). Complaints have been lodged that victims are not permitted to provide input into how much restitution to impose and that such restitution is often not a priority of the criminal justice system (Deem, 2000). It has been claimed that many judges fail to order restitution, prosecutors seldom ask for it, the system fails to consider the full value of the victims’ financial losses, there is an absence of a designated agency overseeing restitution, and victims are not provided help in recovering funds (Nerenberg, 2000c). There may also be a lack of a clear definition of where jurisdiction lies in such a case, and if the activities crossed county, state, and federal bound- aries, responsibility for investigation and prosecution may be unclear and resisted by various officials (Nerenberg, 2000c). Further complicating the assumption of responsibility is that financial abuse may occur in conjunc- tion with other crimes, such as assault, neglect, or false imprisonment, which are handled by different police or prosecutorial units (Nerenberg, 2000c). Because securing needed evidence can take a long time and because the abuse may not be discovered until long after it occurred, the applicable statute of limitations may pose a significant barrier (Nerenberg, 2000c). There are two general categories of criminal laws that the states use to punish individuals who financially abuse the elderly (Dessin, 2000). First, such abuse may be criminally prosecuted under the state’s general theft, extortion, or fraud statutes (Dessin, 2000; Moskowitz, 1998b), with some states permitting the sentencing judge to treat the advanced age of the

FINANCIAL ABUSE OF THE ELDERLY 423 victim as an aggravating factor (Dessin, 2000; Moskowitz, 1998b; Nerenberg, 2000c). Alternatively, perpetrators may be prosecuted under a specific penal statute that addresses (1) abuse of vulnerable adults (which either by legislation or by judicial interpretation has been extended to include elder persons), (2) elder abuse in general, or (3) financial abuse of the elderly specifically (Dessin, 2000; Moskowitz, 1998b). It has been estimated, however, that fewer than half of the states provide criminal penalties that directly address elder abuse (AARP, 2001). Advocates for the elderly assert that the federal government should encourage all states to make financial exploitation of older people a specific criminal offense to promote its prosecution (AARP, 2001). Empirical evidence, however, has not been generated to establish that the availability of such specifically targeted penal statutes results in either increased prosecution rates or deter- rence of such crimes. Civil Remedies Although there may be a tendency to turn first to the criminal justice system (Mixson et al., 1992),47 a range of civil remedies is also available for responding to financial abuse of the elderly. For example, in 1991 the California legislature enacted the Elder and Dependent Adult Civil Protec- tion Act (CAL. HtmlResAnchor Welf. and Inst. Code §5600 et seq.).48 This legislation established civil remedies against individuals and entities that committed elder abuse and provided incentives for attorneys to pursue such cases. It has been asserted, however, that most litigators ignored this act until a relatively recent opinion by the California Supreme Court estab- lished that considerable financial exposure can result from elder abuse (Delaney v Baker, 971 P.2d 986 (Ca. 1999); Mehta, 2000). In general, civil litigation for financial abuse of the elderly has been infrequent (Moskowitz, 1998a), although it has been suggested that there will be more such litigation as civil and criminal agencies work together more cooperatively (Heisler and Quinn, 1995). A number of difficulties have been identified in conjunction with pursuing a civil remedy for finan- cial abuse of the elderly. They include that the standard of proof typically applied to abuse cases in the civil system is clear and convincing evidence that the abuse occurred. Some advocates believe that this standard is too 47But see Heisler (2000), “Because elder abuse was rarely viewed as criminal conduct, litigation historically has been brought in civil courts” (p. 52). 48Similarly, Illinois established that treble damages and attorney fees be available for a civil judgment deciding property has been converted or stolen from an elder person by threat or deception (Moskowitz, 1998b).

424 ELDER MISTREATMENT demanding considering the difficulties noted above in establishing that fi- nancial abuse occurred and that a preponderance of the evidence standard would be better (Nerenberg, 2000c). Another barrier to the pursuit of a civil remedy is the frequent unwill- ingness of attorneys to handle these cases (Moskowitz, 1998a, 1998b; Nerenberg, 2000c). Factors attributed to this shortage are the lack of incentives for attorneys to take such cases, which can be financially risky for the attorneys who must typically invest considerable time in the case and risk not getting paid if the victim dies before the case is resolved (Moskowitz, 1998b; Nerenberg, 2000c). Also, attorneys’ fees may be diffi- cult to collect as the perpetrator may be judgment proof and judges may be unable or reluctant to award such fees (Nerenberg, 2000c). If attorneys’ fees are not available from the perpetrator, the misappropriated property may represent the elder person’s life savings but still represent a relatively small sum in comparison to the attorneys’ fees and the costs of litigation (Moskowitz, 1998b). Publicly funded legal assistance programs could pro- vide an alternative source of attorneys, but these programs have been sig- nificantly curtailed in recent years (Nerenberg, 2000c). Problems of proof have also been cited as a disincentive for attorneys considering whether to accept such a case as victims often suffer from diminished mental capacity, memory loss, or speech difficulties (Moskowitz, 1998b). In addition, such cases require multiskilled attorneys who possess both litigation and finan- cial skills (Nerenberg, 2000c). Another barrier is the lack of agreement over what level of decision- making capacity is needed for various contractual agreements. Although there is general agreement over the level of capacity necessary to make a will, there is less agreement, for example, over the level of capacity needed to give gifts or to get married (Nerenberg, 2000c). The following is a discussion of some specific civil remedies that may be available. Fraud Among the civil penalties for financial abuse are traditional tort rem- edies for conversion and fraud (Dessin, 2000). For the reasons discussed above, attorneys have been generally reluctant to pursue such civil remedies on behalf of elderly clients who have been the victims of financial abuse. One advantage, however, of these remedies is that punitive damages may be available against the perpetrator. For example, in 1998 the Alabama Su- preme Court approved an award of punitive damages to a couple who were defrauded by an insurance agent into cashing in their paid-up policy and buying other coverage (Frolik, 2001). At the same time, curbs on punitive damages have been instituted in a number of states, and many judges are reluctant to allow them to be awarded.

FINANCIAL ABUSE OF THE ELDERLY 425 Undue Influence An alternative civil remedy that may be available is a claim that a transaction was the product of undue influence (Dessin, 2000). Although this remedy varies from state to state, the doctrine is generally available to set aside both inter vivos transfers and transfers at death (Dessin, 2000). Undue influence consists of the concerted, deliberate effort to assume con- trol over another person’s decision making (Nerenberg, 2000c). Just as transactions made by persons who lack mental capacity are not legal, trans- actions by persons who are victims of undue influence are also illegal (Nerenberg, 2000c). Undue influence occurs when individuals use their role and power to exploit the trust, dependency, and fear of others to deceptively gain control over the decision making of another (Bernatz et al., 2001; Quinn, 2000). Both mentally competent persons and persons with diminished mental capacity can be unduly influenced (Nerenberg, 2000c; Quinn, 2000). Elder persons have been identified as being vulnerable to undue influence when there is a close relationship in which the abuser is trusted and the elder person either suffers from cognitive impairments, is socially isolated, or is in a major life transition, such as widowhood (Quinn, 2000). There have been complaints, however, that the standard used to estab- lish undue influence is extremely vague and difficult to prove and that existing assessment mechanisms are inadequate (Nerenberg, 2000c). It has been noted that “[p]art of the difficulty in identifying and defining undue influence stems from the fact that it is a process as opposed to a discrete action, event, or condition” (Nerenberg, 2000c). It has also been noted that little is known about the close bonds that develop naturally between caregivers who provide personal care and companionship to elders in their own homes and what constitutes exploitation as opposed to gift giving under these circumstances (Quinn, 2000). Protective Orders A protective order is another type of civil remedy that may be available to redress or prevent financial abuse of the elderly. For example, an order could be obtained to prevent an individual from committing further finan- cial abuse, to stay away from the victim, to provide a financial accounting, or to pay the costs the elder person incurred in seeking the protective order (Dessin, 2000; Moskowitz, 1998b). Such protective orders, however, do not appear to have been widely used in responding to the financial abuse of the elderly and have been asserted to be a relatively ineffective response (Brandl and Meuer, 2000).

426 ELDER MISTREATMENT Abuse of Power of Attorney49 A general power of attorney appoints one individual to act in place of, or on behalf of, another person. For example, a homebound elder person may grant a power of attorney to a family member to conduct transactions at the bank on his or her behalf. A durable power of attorney continues after the principal loses decision-making capacity. The power may become effective when signed or may be a “springing power of attorney” that takes effect at a specified future time or on the occurrence of a specified future event or contingency (e.g., the incapacity of the principal). States have enacted a range of statutes to punish those who abuse powers of attorney (Brandl and Meuer, 2000). The misuse of a power of attorney has been explicitly classified as a theft (Arizona), a violation of an elder adult abuse statute (Utah, Montana, Nevada), an embezzlement (California, Okla- homa), and an exploitation of an infirm individual (Louisiana) (Thilges, 2000). A durable power of attorney provides a simple, easily implemented, inexpensive tool for providing financial assistance to the elderly, but it is also subject to abuse (Nerenberg, 2000c; Weiler, 1989). Indeed, abuse of the durable power of attorney has been called an ”invisible epidemic,” a “license to steal,” and the crime of the 1990s by practitioners who work with the elderly, in part because of the ease with which people can obtain and misuse durable power of attorney authority (Coker and Little, 1997; Hwang, 1996; Weiler, 1989).50 Among the abuses of powers of attorney that have been identified are having a power of attorney signed by a person who has a cognitive impair- ment at the time, using the power after it has terminated (e.g., the principal becomes incapacitated and the power is not a durable power), or using the power for purposes beyond those for which it was intended (Nerenberg, 2000c). The law generally presumes that the agent has the principal’s permission to transact whatever business the document authorizes and un- less the victim is able to testify, which is often not possible, it is difficult to prove otherwise (Hwang, 1996). It has been noted that few states require any type of registration by an agent, there are no mechanisms to ensure the principal has mental capacity at the time of signing or has not been coerced into signing, elders may not realize the extent of the authority they are 49For a discussion of civil remedies available when a perpetrator has occupied a fiduciary status in general, see Moskowitz (1998b). 50A 1994 survey of attorneys and service providers for the elderly found that two-thirds of the 410 respondents reported cases of abuse of the durable power of attorney and 38 percent knew of five or more such cases (Sacks, 1996).

FINANCIAL ABUSE OF THE ELDERLY 427 assigning, elder persons may be imbued with a false sense of security by the fact that a notary must witness the signing of a power of attorney,51 there are no requirements that the principal be notified when the power of attor- ney has been exercised, and there are few means to ascertain if a power of attorney is no longer effective or has been revoked (Nerenberg, 2000c). Other identified limitations are that the agent does not have to post a bond guaranteeing adherence to his or her fiduciary responsibilities, notice of the assignment of such authority is not provided to other individuals, including relatives of the elder person, there is no third party monitoring of the actions taken, the agent is not required to maintain or present records, and there is no way to regain misappropriated or mishandled assets short of a civil law suit (Heisler and Quinn, 1995; Weiler, 1989). In general, if abuses occur, they are difficult to prove or rectify (Nerenberg, 2000c). Not surprisingly, it has been reported that although financial abuse through the illegal use of a power of attorney is frequent, few legal actions alleging the abuse of this power have been filed and even fewer have been successful (Oh, 1999). Civil actions may be fruitless as agents may be relatively judgment proof having exhausted the assets ob- tained from the elder person and lacking assets of their own (Henningsen, 2000). Similarly, criminal actions may be precluded by broad grants of authority to the agent that make it difficult to prove beyond a reasonable doubt that the agents exceeded the scope of their authority (Henningsen, 2000). Although some states have explored ways to bring more account- ability into the use of this mechanism, it has been reported that “[t]hese efforts have met with mixed success” (Nerenberg, 2000c).52 Appointment of Guardian/Conservator Perhaps the most drastic step that can be taken in response to financial abuse of an elder person is the appointment of a guardian (alternatively referred to as a conservator or a committee in some states) to make finan- cial decisions for an elder person. Such an appointment requires a showing that the elder person lacks decision-making capacity. Because of its rela- tively drastic nature, concerted efforts have been made to establish less restrictive alternatives such as limited or partial guardianships and tempo- rary guardianships (Heisler and Quinn, 1995). 51The role of the notary is simply to attest that the person signing the document is who he or she claims to be. 52For an excellent description of how attorneys can better draft powers of attorney and advise clients to avoid financial abuse, see Henningsen (2000).

428 ELDER MISTREATMENT Although establishing a guardianship or a conservatorship can be a useful mechanism for conducting the financial affairs of elder persons who lack decision-making capacity and can help shield their assets from abuse or be used to recover lost assets (Heisler and Quinn, 1995), a number of difficulties have been associated with this mechanism, and it is a remedy that is dreaded by many elder persons. For example, the costs of establish- ing and administering a guardianship can pose a significant drain on an elder person’s resources (Nerenberg, 2000c) and it can be relatively com- plex and intrusive.53 Also, individuals seeking establishment of a guardian- ship for an elderly person may be acting in their own interests rather than attempting to assist an elderly person in need (Heisler and Quinn, 1995). In addition, although establishing a guardianship requires judicial involve- ment, the court may not be provided with critical information or conduct a neutral investigation that focuses on the capacity of a proposed guardian to provide needed services to the elder person (Heisler and Quinn, 1995). In addition, it may be difficult to obtain a reliable and trustworthy candidate to serve as guardian (Nerenberg, 2000c). Family members and friends of the elder person may not be available or interested in assuming such a role. Also, adequate court monitoring of the guardian may not be available (Heisler and Quinn, 1995). Public guardianship programs were created to serve vulnerable individuals and are usually more accountable (Roby and Sullivan, 2000), but many communities do not have public guardians, and where they do exist, the demand often far exceeds the supply (Nerenberg, 2000c). As a supplement, some private nonprofit agen- cies have started guardianship programs. Another option that has emerged is the use of private professional guardians and fiduciaries, although there have been reports of professional criminals seeking to fill these roles. Each of these options may also provide a further drain on the elder person’s assets. In general, there is little screening of potential candidates and review of their qualifications, notwithstanding that they may be responsible for man- aging significant wealth and ensuring the financial health of the elder per- son (Nerenberg, 2000c). Ensuring subsequent accountability by appointed guardians can also be problematic (Nerenberg, 2000c). The powers as- 53As discussed, alternatives such as durable powers of attorney can also be subject to abuse. Research has not been conducted on which of these measures leaves an elderly person more vulnerable, is more likely to be misused, or has more egregious consequences for an elderly person when misused. However, the law pertaining to the establishment of guardianships generally expresses a preference for alternatives that have been established by the elderly person and that ostensibly are less comprehensive in their assigned powers than is typically true of a guardianship.

FINANCIAL ABUSE OF THE ELDERLY 429 signed to a guardian can be abused to misappropriate the elder person’s assets. Periodic exposés have found guardians stealing funds from their wards. Although courts are ostensibly charged with this responsibility, their resources are often not sufficient to provide adequate ongoing investi- gation and monitoring of guardianships. Also, the negative stigma associated with the establishment of a guard- ianship has made it an unattractive alternative for many elder persons and their families. One commentator wrote, “[t]o some seniors, the threat of being placed under guardianship is as terrifying as the threat of nursing home placement” (Nerenberg, 2000c). Advocates for the elderly have ar- gued that the federal government should encourage the states to create less restrictive alternatives to guardianship and to educate those who are acting as guardians (AARP, 2001). Limitations of Legal Interventions in General Beauchamp (2001) argues that legal interventions to redress financial abuse of the elderly will inevitably be flawed and that no set of laws can be made perfect. In particular, he asserts an inherent tension between compet- ing priorities that, on the one hand, seek to protect elder persons from people who desire to financially abuse them and, on the other hand, seek to respect the wishes of elder persons, which often include a desire to retain their independence. Also, he notes that the greater the level and extent of protections established, the greater the cost. He concludes the problem may not be a need to reform the law or to create new laws, but a need to enforce existing law. Furthermore, he contends, any approach will necessi- tate reliance on the good faith and efforts of the people assisting elder persons with their financial affairs, whether it be a family member, a fidu- ciary, or a judge, and there is little that laws can do to make people more caring or diligent in their duties. PREVENTIVE MEASURES Because investigating and proving financial abuse is often difficult and because perpetrators often spend or dissipate assets before abuse is discov- ered, preventive measures are the preferred means for addressing financial abuse of the elderly (Central California Legal Services, 2001).54 A number 54Addressing elder abuse in general, a report of the U.S. General Accounting Office con- cluded that creating a high level of public and professional awareness of elder abuse was the most effective means for redressing elder abuse, more so than either mandatory or voluntary reporting laws (U.S. General Accounting Office, 1991).

430 ELDER MISTREATMENT of factors have been identified as likely to prevent financial abuse of the elderly, although this identification is generally derived from personal expe- rience rather than from empirical investigation. A variety of approaches for identifying or preventing financial abuse have also been proposed or imple- mented, although little systematic evaluation has been conducted of their effectiveness. These approaches can be organized according to the indi- viduals charged with preventing this abuse. Elder Persons or Family Members and Friends of the Elderly The first set of preventive approaches addresses steps elder persons and family members and friends of the elderly should take. Many advocates argue that the best measure is to prevent isolation by helping the elder person to stay in close contact with multiple friends and relatives (Hoban, 2000; National Clearinghouse on Family Violence, 2001; Podnieks, 1992; Quinn, 2000; Wilber and Reynolds, 1996; Zimka, 1997). Although, as noted, family members have been identified as the most likely perpetrators of financial abuse of the elderly, anecdotal accounts suggest that such abuse is not the result of a conspiracy among a number of relatives, but rather represents the actions of a single family member who has isolated the elder person from other family members or friends. Greater involvement of family members and friends of the elderly person can help prevent or rem- edy this isolation. Such isolation, it has been argued, can also be avoided by encouraging or helping the elderly person to be active in community affairs, senior centers, or religious or charitable organizations (Hoban, 2000; Na- tional Clearinghouse on Family Violence, 2001; Zimka, 1997). Advocates also emphasize the importance of educating the elderly to recognize finan- cial victimization (Coker and Little, 1997; Podnieks, 1992). Another series of preventive steps addresses transactions conducted with financial institutions. Recommendations include that checks received on a regular basis be mailed directly to banks to reduce the risk of theft (Hoban, 2000; National Clearinghouse on Family Violence, 2001; Zimka, 1997). Similarly, it has been suggested that routine bills, such as utility bills, be paid automatically from checking or savings accounts (Zimka, 1997). Arrangements might also be made that any effort to expand the number of individuals with access to an elder person’s bank account result in the notification or require the consent of a third party (National Clear- inghouse on Family Violence, 2001). Other steps identified to prevent financial abuse include arranging for the payment of bills by a trusted friend, family member, or bill paying service (Zimka, 1997) or asking a trusted friend or family member to review all papers before they are signed (Hoban, 2000; National Clearing- house on Family Violence, 2001). A written plan for repayment should be

FINANCIAL ABUSE OF THE ELDERLY 431 signed before money is loaned (National Clearinghouse on Family Vio- lence, 2001). References of people being hired to serve as caregivers should be carefully screened and attention given to a caregiver who tries to isolate an older person (Zimka, 1997). A number of suggestions have been made to prevent abuse of a durable power of attorney. It has been suggested that the elder person carefully choose a trustworthy friend or relative to act as the agent, appoint two trustworthy persons to act jointly thereby creating a check on their indi- vidual actions, establish a “springing power of attorney” that does not take effect until a specific event occurs such as the loss of capacity, and specify that the power of attorney does not take effect until two doctors have certified that the individual is incapacitated (Hwang, 1996). Important legal actions, such as preparing or revising a will and establishing a power of attorney, should be done with a lawyer’s assistance (Hoban, 2000; Na- tional Clearinghouse on Family Violence, 2001). When financial abuse is suspected, a number of courses of action have been suggested for elder persons or for individuals who are concerned about the well-being of the elderly. They include contacting a bank and requesting that it flag and observe activity in the elder person’s account, arranging for a review of account activity and associated signatures, trans- ferring funds to a new account or closing an old account, and requesting a bank investigation (Central California Legal Services, 2001; National Clear- inghouse on Family Violence, 2001). Similarly, steps can be taken to revoke a power of attorney and to request an accounting (Central Califor- nia Legal Services, 2001; National Clearinghouse on Family Violence, 2001). The Social Security Administration, the Veteran’s Administration, or a pension board can be notified of the possible theft of benefit or annuity checks, of a new representative payee, or of new arrangements for direct deposit or delivery of checks (Central California Legal Services, 2001). Finally, steps can be initiated to remove a perpetrator from the home of the elder person or to establish a guardianship to protect the assets of the elder person (National Clearinghouse on Family Violence, 2001). Financial Institutions A group of individuals frequently cited as being best positioned to provide early detection of possible financial abuse are employees of banks or other financial institutions who interact with the elderly person or pro- cess account activity (Choi et al., 1999; National Clearinghouse on Family Violence, 2001; Podnieks, 1992; Zimka, 1997). One commentator noted that “[b]ank employees, given their frequent contact with older clients who prefer personal bank visits to automatic teller machines, are often the first to spot suspicious banking activity that may be indicative of abuse” (Tom,

432 ELDER MISTREATMENT 2001). The NEAIS report concluded that “banks are in a good position to observe financial abuse and concerted attention should be given to how to better involve them” (National Center on Elder Abuse, 1998). Alternatively, some retirement communities provide financial advice and assistance to members of the community. For a description of one such service that provided assistance with daily money management, see Bassuk (2001). Many elderly individuals who are the most likely targets of finan- cial abuse are not members of such communities. Nevertheless, it has been argued that such models should be expanded to be readily available to all elderly individuals who need such advice and assistance (Bassuk, 2001). In general, a series of recommendations targeted at the financial indus- try and its employees have been generated to minimize financial abuse of the elderly (Commonwealth of Massachusetts, 2001).55 Among the steps recommended are that financial institutions employ training programs to help employees identify and redress such abuse (Commonwealth of Massa- chusetts, 2001; National Clearinghouse on Family Violence, 2001). Such a program implemented in New York provides instruction on who com- monly commits financial exploitation, typical scenarios that lead to finan- cial exploitation, ways to detect financial abuse, a model protocol for ac- tion, and prevention training (New York State Department of Law, 2000). Similarly, bank employees in Massachusetts received special training in the identification of possible cases of abuse of older persons’ bank accounts (Price and Fox, 1997).56 This training led to the identification of a number of cases of financial abuse (Price and Fox, 1997). Also, employees can be encouraged to tell older customers about good financial practices and ways to prevent financial abuse (National Clearinghouse on Family Violence, 2001). Along with the development of model programs, barriers limiting the banking industry’s participation in efforts to curb financial abuse of the elderly have also been identified. For example, bank employees may be hesitant to report customer financial information and potential financial exploitation because of privacy laws and confidentiality requirements that prohibit the disclosure of a client relationship or account information (Jack- son, 2000; Tom, 2001; U.S. Congress, 2000).57 In response, advance 55For a compilation of warning signs and suggestions generated specifically for Certified Public Accountants, see Rush and Lank (2000). 56The Massachusetts program is also being employed in California, Maryland, New York, Oregon, Utah, and Virginia (Commonwealth of Massachusetts, 2001). 57The banking industry has been reported to believe that statutes encouraging the volun- tary reporting of elder abuse do not adequately shield financial institutions from liability (Tom, 2001). However, others believe that exceptions within state and federal law allow

FINANCIAL ABUSE OF THE ELDERLY 433 directives have been designed that specifically permit banks to notify ac- count holders and other named parties of activity that is inconsistent with the account holders’ usual banking patterns (Tom, 2001).58 Alternatively, financial institutions could be included within the list of mandated report- ers of elder abuse, as in Arizona, although the banking industry has been reported to resist such inclusion because of its fear of additional govern- ment control over and involvement in its operations (Choi et al., 1999; Tom, 2001). Some states have instituted laws that specifically provide immunity to employees of financial institutions who had reasonable suspi- cion that a consumer is a victim of financial abuse and reported this infor- mation to the proper authorities (Jackson, 2000). Businesses Providing Services to the Elderly Businesses that routinely provide services to the elderly can also help minimize the potential for financial abuse of the elderly. For example, it has been noted that many utility companies offer helpful services such as direct payment plans, warning programs to notify customers before services are turned off due to nonpayment, and payment averaging plans (Central California Legal Services, 2001). Attorneys Attorneys are another group of individuals who may be well positioned to identify and respond to the potential financial abuse of the elderly. It has been suggested that attorneys be sensitive to the potential for financial abuse when drawing up powers of attorney or other legal documents (Podnieks, 1992) and proactively advise clients to limit the authority granted when establishing a power of attorney (Zimka, 1997). In addition, it has been suggested that steps be implemented to monitor an agent’s activity by requiring an annual reporting to an outside party of the financial transac- tions undertaken, including a listing of income and expenses (Zimka, 1997). Another avenue is to encourage attorneys to ensure that older persons who financial institutions to contact government entities and disclose otherwise private customer records and information concerning suspected violations of the law and that this would encompass elder abuse reports (U.S. Congress, 2000). 58A similar approach has been implemented in Canada, where older persons have begun authorizing their banks to monitor their accounts for unusually large transactions or unusual patterns of transactions, to subsequently raise concerns with the account holder, and to warn of the possibility of fraud (Smith, 1999). Resistance to financial advance directives has reportedly come primarily from larger financial institutions that cite additional paperwork and exposure to large class-action lawsuits as their reasons for not endorsing this approach (Smith, 1999).

434 ELDER MISTREATMENT sign financial and legal documents are fully competent to do so (Moskowitz, 1998a; Smith, 1999) and have not been coerced by family members or others into inappropriately disposing of their assets (Smith, 1999). Also, it has been recommended that lawyers inform older clients of their fundamen- tal right to asset control and personal decision making and explain to them the consequences of various legal actions (Moskowitz, 1998a). Fiduciaries A fiduciary appointed to act on behalf of an elder person by necessity exercises considerable control over the finances of the elder person. Al- though advance planning regarding financial affairs and the execution of a financial advance directive may be undertaken in an effort to avoid subse- quent financial abuse, such efforts have been undercut when the elder person’s designated agent engages in financial abuse (Kapp, 1995). A number of steps have been identified to minimize the likelihood of financial abuse by fiduciaries. For example, a need for greater numbers of specially trained fiduciaries has been asserted (Sampson, 1996). But most proposals call for improved tracking or accountability of the fiduciary (Nerenberg, 2000c).59 It has been suggested that in appropriate cases individuals who act under a power of attorney be required to prepare an annual statement setting out details of the year’s financial activities (Smith, 1999). Similarly, it has been suggested that guardians and conservators be subject to IRS- style audits that would be performed by a state agency that would ran- domly select a small percentage of guardianships or conservatorships to review their records and to investigate the wards’ situations (Beauchamp, 2001). Another suggestion is to delegate some of the duties of judges who are ultimately responsible for supervising conservatorships and guardianships to other officials who specialize in these appointments and who may be better situated to investigate them (Beauchamp, 2001). It has also been argued that too many elders are not represented at their compe- tency hearings, that assigned powers are overly broad and based on conve- nience rather than necessity, that statutorily required annual accountings often go unfiled, and that curtailed rights of the elderly are rarely reviewed and almost never restored, notwithstanding changes in the elder person’s decision-making capacities (Sampson, 1996). Some commentators suggest that the best solution is to avoid a conser- vatorship or guardianship altogether and to employ alternatives such as trusts, durable powers of attorney, representative payees, and joint tenancy 59For an annotated bibliography of materials addressing financial exploitation of the eld- erly by a conservator, see Sampson (1996).

FINANCIAL ABUSE OF THE ELDERLY 435 that are more flexible, less costly, and avoid judicial scrutiny (Beauchamp, 2001; Weiler, 1989). At the same time, it has been recognized that these alternatives may also present problems, including a lack of oversight and means to ensure assets are devoted to the elder person’s needs (Beauchamp, 2001; Heisler and Quinn, 1995; Weiler, 1989). At least one commentator has concluded no alternative is foolproof and “society may just have to rely on the person who takes care of the vulnerable and hope that that person does not take advantage of her position” (Beauchamp, 2001). Health Care Providers Finally, it has been suggested that health care providers are in a unique position to prevent financial abuse of the elderly (Bernatz et al., 2001; Lavrisha, 1997). Health care providers who see their elderly patients regu- larly may be in the best position to know if an older person’s mental capabilities have declined to such an extent that the individual is subject to financial abuse (Smith, 1999).60 It has been suggested, for example, that nurses in the community and in clinics are likely to encounter elder persons at risk and can assess the level of social support available, provide education on how to avoid financial exploitation, and make appropriate referrals to volunteer companion pro- grams and the like (Lavrisha, 1997). In addition, it has been argued that nurses have an ethical and often a legal responsibility to recognize and detect potential financial mistreatment and that gerontological nurses in particular can encourage the initiation of appropriate responses to financial abuse such as the establishment of a representative payee, a durable power of attorney, a trust, or a joint tenancy (Weiler, 1989). It has also been recommended that when a person is diagnosed with a disorder that dimin- ishes mental capacity (e.g., Alzheimer’s disease), health care providers should warn the patient and family members about the potential for finan- cial abuse and provide practical suggestions on how to avoid such abuse (e.g., by having a cosigner on bank accounts) (Bernatz et al., 2001). One physician has suggested that clinicians working with older people should consider including questions about financial affairs in their routine history and be particularly concerned when socially isolated and frail older people talk of unpaid bills, new friends who are visiting regularly and borrowing money, ongoing home renovations, or frequent large purchases (Cohen, 1998). 60At the same time, an assessment of individuals 70 years of age or older who were presented for treatment at a hospital emergency room found that one of the three areas with which patients needed the most assistance was the management of finances (medications and ambulation were the other two areas) (Fulmer and Cahill, 1984).

436 ELDER MISTREATMENT Education regarding financial abuse of the elderly, warning signs, and steps that can be taken to minimize or remedy such abuse could be targeted at health care providers who regularly provide services to the elderly. In addition, protocols for detecting elder abuse that include questions pertain- ing to financial abuse have been developed for physicians (Kleinschmidt, 1997; Tueth, 2000), nurses (Fulmer and Cahill, 1984), and emergency department professionals (Fulmer et al., 1992) and could be made more readily available to them. Social Services/Governmental Agencies Social services agencies may already be responsible for providing ser- vices to elder persons who are vulnerable to financial abuse and they could be assigned a specific or enhanced role in preventing such abuse. Alterna- tively, they could be given responsibility for providing financial assistance to the elderly. For example, as noted, some states have fiduciary abuse specialist teams (FASTs), which include expert financial and legal consult- ants, to help victims recover or prevent further loss of their assets (Bernatz et al., 2001). Such teams could be made available to elder persons seeking advice on or assistance with financial decisions as a means to prevent financial abuse of the elderly. Alternatively, assessment instruments for detecting elder abuse, which include signals of financial abuse, have been developed for caseworkers visiting elders in the community (Reis, 2000; Sengstock and Hwalek, 1986). However, one survey found little enthusiasm for involving social services agencies in these surveillance efforts, with caseworkers stressing that sort- ing out financial affairs was complex and time-consuming (Langan and Means, 1996). In addition, it has been noted that social service agencies have long recognized the need to provide financial assistance, including assistance with daily money management, but the scope and availability of such services vary greatly around the country and few free or low-cost programs provide a full range of such services (Bassuk, 2001). It is also likely that many elder persons would be reluctant to permit governmental agencies and personnel to become involved in their financial affairs. More- over, it has been noted that elders and their relatives are often not aware of financial-management services offered by community-based agencies (Choi and Mayer, 2000). FUTURE RESEARCH NEEDED Two of the leading authorities on financial abuse of the elderly have identified what they consider to be the important research questions. Nerenberg writes:

FINANCIAL ABUSE OF THE ELDERLY 437 [L]ittle is known about the extent or nature of financial crime. Apart from a few studies on telemarketing fraud, very little is known about other types of financial crime, including fraud by family members. Even less is known about the impact of financial crime on its victims, victims’ service needs, and promising approaches to meeting those needs. . . . Even less is known about victims’ mental health or social service needs and effective approaches to addressing them (2000c:70). In contrast, the NEAIS report (National Center on Elder Abuse, 1998) raised the following research questions: Are there characteristics of the caregiving relationships among younger family members who financially exploit their older relatives that could be affected by service interventions for the perpetrators? What are those interventions? Are there services or education for persons aged 60+ that would help them from becoming victims of financial abuse, particularly by younger family members? How can employees of banks be educated and encouraged to identify and report incidents of financial exploitation that may come to their attention while serving elderly customers? The analysis provided in the course of this report has also identified a number of research questions. Although greater attention has been given to financial abuse of the elderly in recent years, most of the accompanying commentary relies on anecdotal evidence, personal experience, or com- monly shared beliefs. There is a great need for a research foundation to be generated to inform the debate over how best to respond to this abuse. In addition to the many issues that have not been subject to systematic re- search, there is a need for existing studies that rely on small samples to be replicated at a national or regional level and for this research to be con- ducted in a methodologically rigorous manner. Conducting research on elder abuse in general has proven to be difficult (see Comijs et al., 2000; Thomas, 2000), and these same difficulties generally apply to research on financial abuse of the elderly.61 In addition, there are special challenges associated with conducting research on financial abuse of the elderly. These challenges include the absence of a consistent, objective operational definition of what constitutes financial abuse; ascertaining what impact, if any, cultural differences and subjective perceptions (especially those of the elderly person) should play; whether a minimal financial amount should be involved before financial abuse is considered to have occurred; particular difficulties associated with 61See Langan and Means (1996); Research on financial abuse is often quite limited, being based on very small samples or an investigation of case files of those elderly people defined by statutory agencies as victims of abuse.

438 ELDER MISTREATMENT detecting and establishing the occurrence of financial abuse; what role the intent of the alleged perpetrator should play; discerning the existence, rel- evance, and impact of the tacit acknowledgment and consent of the elder person; and whether, particularly for smaller financial amounts, a pattern of abuse is required or a single incident will suffice to establish abuse. The following questions also need specific empirical examination. What is the prevalence of financial abuse of the elderly? Because it is under- reported and difficult to detect, it is difficult to mobilize public interest in this issue without this baseline information. What is the impact of financial abuse on the elderly? For example, does it typically result in financial devastation and a loss of independence? What impact does it have on the health of the elder victims? What is its psychological impact, both short- term and long-term? In a world of limited resources, does financial abuse justify the same level of scrutiny or intervention as do other forms of elder abuse? What other forms of elder abuse co-occur with financial abuse and to what extent? Are reports of other types of elder abuse likely to address most instances of financial abuse? If financial abuse is a distinct phenom- enon, it may need separate and distinct responses. What types of financial abuse are most common? What are the charac- teristics of the victims? For example, are they socially isolated, where do they live, how old are they, what is their financial status, what is their cognitive state, what is their family history/status, and what is their ethnicity? Similarly, what are the characteristics of the perpetrators? For example, what are their motivations and how many are close family mem- bers, acquaintances, or caregivers of the elder person? What factors lead to financial abuse? For example, what is the nature of the interaction between victim and perpetrator and what risk factors associated with this interac- tion can be identified? What decreases the likelihood of abuse? For ex- ample, when do close family bonds buffer against financial abuse? What variations are associated with the cultural context in which the elderly person lives, and is it possible to develop objective standards that apply appropriately to all cultural groups? Such information is a prerequisite for developing and targeting interventions. What are the barriers to detecting financial abuse of the elderly? What are indicators that family and professionals can watch for that suggest financial abuse may be occurring? What are the best ways to identify financial abuse? What are elder persons’ perceptions of what constitutes financial abuse and how do they correspond with various professionals’ perceptions? How effective are reporting requirements? Does mandatory reporting result in different rates of identification than voluntary reporting? Do the various means of responding to financial abuse serve as deterrents for future financial abuse? Do these various means adequately meet the needs of elder victims? Which venue is most effective in responding to the

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Since the late 1970s when Congressman Claude Pepper held widely publicized hearings on the mistreatment of the elderly, policy makers and practitioners have sought ways to protect older Americans from physical, psychological, and financial abuse. Yet, during the last 20 years fewer than 50 articles have addressed the shameful problem that abusers—and sometimes the abused themselves—want to conceal.

Elder Mistreatment in an Aging America takes a giant step toward broadening our understanding of the mistreatment of the elderly and recommends specific research and funding strategies that can be used to deepen it. The book includes a discussion of the conceptual, methodological, and logistical issues needed to create a solid research base as well as the ethical concerns that must be considered when working with older subjects. It also looks at problems in determination of a report's reliability and the role of physicians, EMTs, and others who are among the first to recognize situations of mistreatment.

Elder Mistreatment in an Aging America will be of interest to anyone concerned about the elderly and ways to intervene when abuse is suspected, including family members, caregivers, and advocates for the elderly. It will also be of interest to researchers, research sponsors, and policy makers who need to know how to advance our knowledge of this problem.

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