A new series of studies by experts from the Gerontological Society of America (GSA) highlights the pivotal role banks and financial professionals can play in the fight against elder financial abuse. The GSA's special bulletin, the Public Policy & Aging Report, shows the importance of instituting safeguards to protect American seniors from fraud and financial exploitation, a phenomenon that has reached emergency levels in the United States and poses no less than an "economic threat." In estate, trust and probate litigation, we've seen how elder financial abuse constitutes a significant danger precisely because it can destroy a family's wealth - generations of sweat, tears, and hard work - practically overnight.
The latest edition of the Public Policy & Aging Report confirms that the scale of elder financial abuse in America and the heightened vulnerability of our elderly neighbors and loved ones rightfully serve as cause for alarm. According the study, older adult US households contain $18.1 trillion in wealth, over a full third of all homes. With a decline in cognitive abilities and the onset of conditions like dementia and Alzheimer's, seniors are at higher risk of exploitation or falling victim to fraud. It's a sad fact that the majority of the time elder financial abuse is perpetrated by a family member - a wrongdoer who takes advantage of their position to empty out bank accounts, hijack estate assets and even unlawfully change wills in their favor. The damage from elder financial abuse is staggering - every year anywhere from $3 billion to $36 billion is lost due to this crime. Top this off with civil lawsuits and probate and trust litigation, and the costs are truly staggering.
There are ways for the financial industry to prevent and stop elder abuse when it hits their doorstep, however. Along with his colleagues, Dr. Peter Lichtenberg has developed a financial decision-making scale that can be implemented in order to test capacity among elderly bank clients:
The banking industry can improve its interactions with older adults by creating proactive planning programs, recognizing signs of cognitive impairment, dementia, and financial exploitation and by learning new methods of assessing financial decision-making abilities... There is a need for real-time assessments and interventions if financial exploitation and decisions made by older incapacitated persons are to be curbed.
Lichtenberg's scale has proven effective in distinguishing seniors with capacity for making sound financial decisions from those who can no longer do so. With these and other safeguards in place, bank employees can form a first line of defense against perpetrators of elder financial abuse. In coordination with authorities, medical personnel and attorneys who represent victims of elder abuse, financial professionals should make a valuable contribution in the fight against exploitation of our elderly loved ones. The mission is simple - prevent elder abuse and protect elders' wealth and well-being. Let's get to work.