There continues to be a problem of the elderly becoming victims of fraud. Approximately 20 percent of older Americans have experienced either investment fraud or financial exploitation.
Attorneys appear sympathetic to help out. Some nine out of 10 attorneys said in a survey they will take part in a campaign to address the issue.
In addition, the sponsors of the survey, the Investor Protection Trust (IPT), the Investor Protection Institute (IPI), and the American Bar Association (ABA) are launching an Elder Investment Fraud and Financial Exploitation (EIFFE) Prevention Program Legal. It will develop, test and implement a model national continuing legal education program for lawyers to: recognize clients vulnerability to EIFFE due to mild cognitive impairment (MCI); identify EIFFE in their clients; and report suspected instances of EIFFE to officials.
In addition, the recent survey showed that 91.4 percent of attorneys questioned say that elder investment fraud and financial exploitation is a “very serious” or “somewhat serious” problem.
“We know that a shockingly large number of older Americans are already victims of financial swindles and millions more are in danger of being exploited in such a fashion. Front-line legal professionals who deal everyday with older Americans are ideally positioned to spot the impaired mental capacity that can leave seniors vulnerable to financial abuse,” Don Blandin, president and CEO, Investor Protection Trust, said in a statement.
In addition, Charles Sabatino, director of the Commission on Law and Aging at the ABA, adds that because lawyers “play such a significant role in advising and serving an aging society, especially around financial matters, their role in spotting, preventing, and responding to financial exploitation needs to be as professional and effective as possible.” But he points out this is not an area in which “many are effectively trained.”
From the medical and biological side, there is a need for such a program. Damage to the orbitofrontal cortex of the brain can make people who have mild cognitive impairment “far less risk averse than they were before,” the organizations explained in the statement. Dr. Robert Roush, director of the Texas Consortium Geriatric Education Center of the Huffington Center on Aging at Baylor College of Medicine, stated that, “Normal age-related changes in financial decision making can be exacerbated by neurodegenerative conditions ranging from MCI [mild cognitive impairment] to some forms of Parkinson’s disease. This is why all professionals with fiduciary responsibilities to older people need to know that these conditions can place their patients or clients at greater risk of financial exploitation than otherwise might be the case.”
Concern about this area is not something that only elder law specialists or trusts and estates practitioners should be aware of; attorneys in different fields may need to address these issues. Lori Stiegel, senior attorney and EIFFE Prevention Program Legal project director at the ABA’s Commission on Law and Aging, gave the example of a business lawyer advising a client about selling a company.
“A lawyer who is ignorant of EIFFE and fails to recognize its signs may unwittingly participate in victimizing the client or fail to protect the client from harm, and as a result may face professional discipline and liability for malpractice,” she said.
In fact, the survey showed that 96 percent of attorneys questioned said diminished decision-making capacity makes seniors “very often” or “somewhat often “more vulnerable to investment fraud and financial exploitation.
Also, 27.3 percent of the lawyers, weekly or monthly, deal with the children of older victims of investment fraud and financial exploitation, who are either concerned parties seeking legal help for their parents, or, who are individuals accused of financial exploitation of their elders.
Overall, recent data show at least 10 percent of the elderly in the United States are victims of “maltreatment” every year. That bad treatment includes “physical, psychological/emotional, financial and sexual abuse; neglectful caregiving and being scammed by strangers,” the ABA explained. Some 90 percent of all elder abusers are relatives, according to a statement from the ABA.
In states like California, there have been increasingly more legal fights involving relatives over trusts in California. It used to put stepparents up against children of a deceased spouse, but now siblings are fighting amongst each other or with their older parents, Attorney Mary Gillick, who trained as a nurse and then went to law school, toldInsideCounsel. Often, it becomes financial elder abuse. “It’s vicious,” she adds.