Balancing Independence and Vulnerability of Older Adults | Part 2
“Balancing Independence and Vulnerability of Older Adults: What if Granny Wants to Gamble?” is a three-part special:
- Synopsis: An introduction and overview to the lecture.
- Part 1: Discusses women’s differing longevity and the differences in how men and women manage finances later in life.
- Part 2 (this podcast): Will talk about elder financial abuse and the perpetrators.
- Part 3: The final part will recommend steps that lawyers and others can take to protect autonomy of older adults, especially women.
“Balancing Independence and Vulnerability of Older Adults: What if Granny Wants to Gamble?” That’s the subject of today’s ACTEC Trust and Estate Talk.
Welcome to Part 2 of the Lecture “Balancing Independence and Vulnerability of Older Adults: What if Granny Wants to Gamble?” This podcast is a special edition of ACTEC Trust and Estate Talk. This is Susan Snyder, ACTEC Fellow from Chicago. Professor Mary Radford, ACTEC Fellow from Atlanta, Georgia presented the annual Trachtman Lecture in front of a live audience at ACTEC’s Annual Meeting in March of 2019. Our previous podcast offered an understanding of the lifespan of women, some examples of eccentric women, and their ability to, or not to, manage their finances – an insight into the potential vulnerabilities surrounding financial capacity that comes with aging. Today she will continue her lecture with a discussion of elder financial abuse and who commits it, how we can help protect the autonomy of older adults and understand what the law can do to protect against such abuses.
Continuation of the Lecture
Again, you have heard the statistics. The symptoms of Alzheimer’s disease right now are showing up in about 5.8 million Americans. Of those, 5.5 million are aged 65 or over. The number of Americans living with Alzheimer’s disease is expected to be 14 million just by the year 2030. So basically, in addition to Alzheimer’s disease, there are other emotional and physical states that can affect our ability to assess risk and our vulnerability. Things like depression, narcissism; all sorts of possibilities there. So basically, what the studies are indicating is that we are all, whether we think we are not, probably experiencing some age-related decline in the specific neural systems that allow us to make complex decisions.
So again, the question: why are these issues so particularly important to women? Well, as I mentioned before, older women in our society are vastly outnumbering older men. So, the good news, if you are a woman, is that you are going to live five years longer than the average male. The bad news is that the consequence of this longer life can be dire and unexpected. So, for example, there’s a Merrill Lynch study that estimates that the average woman will have 139 percent higher healthcare costs than the average man. Those numbers vary a lot depending upon the studies, but what they are basically saying is that an average of an additional 194,000 dollars that women are going to need to keep because they are going to need to spend it on their health. As we have also seen, older women are more likely to be alone than older men.
Women as “elder orphans”
Let’s look at that for a minute. What sociological factors are causing older women to be the ones who are alone? Well, a couple of things have happened. Obviously, the life expectancy statistic that I mentioned. In addition, every year approximately 800,000 people become widows or widowers —700,000 of those people are women. The divorce rate for people aged 50 and over has doubled in the past decade and the divorce rate for people aged 65 and over has tripled, even though it has levelled- off or gone down in the younger generations. And of course, lots of divorced individuals re-marry, but there’s a gender gap again, in that men tend to re-marry far more than women.
And another factor that contributes to this “solo status,” if you will, of women is that many women in the baby boomer generation chose to either have fewer children than their parents or no children at all. In fact, between 1970 and 2010, the number of women who were childless at the end of their childbearing years doubled. And in addition to that, parents are now outliving their children due to a number of factors, obesity being one of them. So basically, people who used to depend upon their children are now living beyond that. So this phenomenon is creating a group of people that are sometimes referred to as elder orphans or sometimes referred to as unbefriended adults, and scientists estimate that about, again 25 percent, and remember that’s going to be a different percentage whether you are male or female, 25 percent of us are at risk of ending up as elder orphans. And then the problem is that as a result of that, those elder orphans are going to face increased threats to their health. They are going to be increasingly isolated. They are going to be vulnerable to the people who prey on vulnerable elders. In fact, the typical victim of elder abuse is described this way — between the ages of 70 and 89, white, female, frail and cognitively impaired. She is trusting of others and may be lonely or isolated.
Elder Financial Abuse
So now, we have to zero in on the depressing topic of elder abuse, in particular, elder financial abuse. A 2009 report pointed out that two thirds of the reports to Adult Protective Services — and that’s where elder abuse is reported — two thirds of those involved a victim who was a woman. The same report said that people who have dementia are at greater risk. And, of course, remember I told you two thirds of the people with Alzheimer’s are women. It also said that social isolation is a factor that’s often correlated with elder abuse. And again, remember all these women are living alone. So, we have a perfect storm, if you will. We have women of means, alone, isolated, vulnerable due to cognitive loss, trusting by nature versus the vast array of predators and scammers who are out there in our society.
So, what is elder financial abuse? Well it doesn’t really have a definition legally and societally it doesn’t really have a definition, but I think we all kind of intuitively know what it is. It’s basically another individual using the elder’s money for his or her own interest and without the elder’s consent. And it can take so many forms. It can be as small as pilfering by the caretaker. The caretaker who goes to the grocery store with the older woman’s money and keeps the change. It can take the form of somebody who forges documents for someone who is cognitively impaired. Somebody who influences an elder adult or even, as in Ms. Cochran’s case, it can be abuse that is perpetrated from outside by outsiders. Just a few examples of that, we talked about Ms. Cochran’s lottery winnings. How about the phony phone call from the IRS or Medicare that asks for potentially private, hopefully private information, social security numbers, things like that. The website that advertises prescription drugs or supplements, which actually contain harmful ingredients, or at the very least have never been tested to show that they do what they purport to do. The fake charity solicitations done by phone, and again think how many older people still have landlines. The purported creditor who shows up after the funeral because he read the obituary and tells the widow that her husband owed him money or the warning that pops up on your computer screen that says that there is a virus and you have to call this number and let these people into your computer to take care of it.
The FBI reports that in 2017 almost 50,000 people aged 60 and up lost some 342.5 million dollars just due to internet fraud. An earlier study has indicated that elder individuals lose somewhere between 2.9 million and in some other studies up to 36.48 billion dollars every year due to elder financial abuse, and the worst part is that that’s only the tip of the iceberg because other research indicates that only about one in every 14 cases of elder abuse is actually recorded.
Types of Elder Financial Abuse
So, what are some of the abuses that we need to watch out for with our older cohorts and colleagues? A couple that older people seem particularly vulnerable to: the grandparent scam. You have probably heard about this. Now what has happened is that the grandchild has exposed his or her entire life on social media, social media to which everyone has access, including the scammer. So, the scammer mines information from the social media and then calls up the grandparent and either pretends to be the grandchild, not so often, or a lawyer or law enforcement officer. And, “the child is in trouble and we need money; please send it right away.” And just as an aside, banks have gotten so suspicious of these large withdrawals of cash that the scammers now demand gift cards instead of cash.
Another to which men are more susceptible than women: basically, this is the sweetheart scam. The sweetheart scam usually begins with an online dating service. The scammers will send pictures of themselves that don’t exactly accurately reflect what they look like. (Okay, so it’s not that different from ordinary, online dating, right?) But then, the target is groomed over time and as the target shows himself to be more vulnerable, the grooming leads to more and more intimate interactions. Sometimes, as we found out in the Elder Law Committee meeting on Friday, sometimes even to marriage. But then a catastrophe occurs in the new lover’s life and money is needed. So, “please send money.” And what often happens here is that people not only lose that money (and there have been cases of between 500,000 and 2 million dollars given to these scammers), but they end up ashamed, humiliated and heartbroken.
Victims of Financial Elder Abuse
So, who are the victims of financial elder abuse? Well I have mentioned before, a couple of things. Certain factors that show up repeatedly in the reports. We have got the factors of cognitive impairment, being too trusting or not suspicious enough of other people, being dependent upon others for care, being socially isolated and being lonely. Now this description might lull everybody in this room to think “okay, I am good” and “that’s not going to happen to me.” However, there’s another group of victims that are called the high achievers. So, when a high achiever has cognitive impairment, he or she is a very attractive target for the scammers, for the obvious reason that the high achievements have led to a high amount of cash. But the thing with the high achievers is that it might be less apparent to those around them that they are being scammed, because they have what’s called reserved capacity. So, they are actually able to mimic the fact of capacity in a way that masks their own cognitive impairment. And in addition to that, it might surprise you that these high achievers are characteristically pretty proud people and they basically don’t want to admit that something is going wrong, so they won’t reach out to others.
Perpetrators of Financial Elder Abuse
So, who are the perpetrators of financial abuse? Well, obviously we have got those who live out in the cloud somewhere, like the kind who were scamming Sara Cochran, but sadly many of the perpetrators are closer to home. They are the trusted advisers, the attorneys, the accountants, the financial advisors of older people. They are their caregivers, and all too often, as with Brooke Astor, they are members of their family. There was a seminal MetLife report on elder abuse in 2011. It reported that 34 percent of the noted incidents, the incidents of elder abuse, were perpetrated by family, friends, neighbors or caregivers. But then, a later study had an even higher estimate. It said almost 60 percent of the perpetrators are family members, another 16.9 percent are friends and neighbors, and another 14.9 percent are caregivers.
So again, studies have isolated with these perpetrators certain characteristics that we need to look out for. You probably can guess what they are. Mental illness of some sort, drug or alcohol addiction, unemployment or financial problems, gambling, and a heightened sense of entitlement on the part of the child. Now perhaps not surprisingly, the closer the relationship between the perpetrator and the victim, the less likely it is to be reported.
Why is that? Well for some people it’s simply the embarrassment of having been scammed. They just don’t want to report it. Other victims are really not absolutely certain that they have been abused, due to their cognitive impairment, or that what happened was “abuse.” So, was it abusive for the older son who’s down on his luck to convince his mother to buy a house and a new car for him? They don’t know. So, they don’t report. Some victims fear further abuse and other victims are afraid that the person who is abusing them, who is also the person who is caring for them, is going to abandon them. Some of the victims feel that in a sense, at some level, maybe the children do deserve that money that they took. Maybe some misplaced sense of guilt about not giving them enough love in their childhood. Other victims just don’t want to air the family’s dirty laundry and, God forbid, do not want to be responsible for sending a family member to jail. But basically, and perhaps saddest of all, many of these victims realistically understand that the cure for this abuse may be worse than the harm. They have the fear and as I point out, it is a realistic fear that when they reveal their own vulnerability and their own victimization to their family, their family members are going to institutionalize them or adult protective services is going to take away their freedom. So, ask ourselves, what other crime in our society does reporting and prosecution carry such a tremendous risk to the victim of losing her own freedom?
Elder Abuse Laws
So, as I mentioned earlier, society is waking up to elder abuse. We have federal laws. The Senior Safe Act was just enacted last year. The Elder Abuse Prevention Act in 2017. They are coordinating efforts by the federal agencies to basically make sure that we get a grasp on this problem. In addition to the national initiatives, the states have all responded resoundingly to the problem of elder abuse. Virtually every state has enacted a statute that requires certain people– they are called “mandatory reporters”– to report suspected elder abuse to the Adult Protective Services. And in addition, some states– not many yet, but some states have enacted statutes that are criminal statutes in that they perhaps criminalize something that’s not really criminal, such as undue influence. But it’s criminalized if it’s inflicted upon an elder individual. Others of these criminal statutes enhance the penalty if a crime like fraud or theft or identity theft is, in fact, again perpetrated on an older individual.
Now, these initiatives are certainly laudable. Rightfully, they prioritize the safety and the security of elder persons, but there are some subtle and perhaps more hidden concerns here. These statutes run the risk of stereotyping all elders as weak, fragile, confused and vulnerable. Sometimes these statutes are not going to be effective and they may have the unintended consequence of robbing the freedom of an individual who doesn’t need to be protected. So, this brings us back to that question that I raised at the beginning, the question of balance. How do we protect our grandmothers and our grandfathers from the predation that’s out there, while at the same time respecting and guarding their autonomy? So, in other words, if granny really has solid, sound, cognitive abilities and she has the resources and she can afford to do it, why shouldn’t we let her gamble?
Autonomy of Older Adults
So, before we talk about the balance, let’s examine, for just a few minutes, the whole question of autonomy. Why is it such a value, at least in my mind? Why should we protect granny’s autonomy? Well, first of all, I will define autonomy basically as the freedom to pursue your own life’s choices without forced intervention by anybody else, and by anybody else I mean the government or family members. It is maybe easier to describe autonomy if I describe what happens when it’s taken away.
So, for an elder individual, it can be either taken away through a private mechanism or through a public mechanism. For the family who has decided that granny shouldn’t be able to keep her money or be able to gamble anymore, they can privately, again, bring a petition to have a guardian or a conservator appointed for her or they can institutionalize her. As far as the government is concerned, the government, again, can come in with an elder abuse report. APS comes to the door. A plan is put in place, and sometimes even law enforcement is involved. So, what does that mean? Well, if granny is institutionalized, if she goes into a nursing home, she can’t make basic decisions such as what she wants to eat, when she wants to eat and even whether she can lock her door. (Now the Center for Medicare and Medicaid Services is aware of this and they are starting to pass some regulations about that.)
What about if a guardianship is imposed? Well, all you have to do is look at any state guardianship laws and you see what granny loses. She loses the ability to decide if she wants to marry. She loses the ability to consent to medical treatment. She even loses the ability to decide where she wants to live. And if a conservator, sometimes called a guardian of the property, is appointed, she also loses the ability to handle all her tangible or intangible property. So, in other words, she will lose the ability to buy the clothes she wants to buy, to take the trip she wants to take and to play the games she wants to play (except maybe bingo).
So, this loss of autonomy, this loss of personal independence, is a loss of control, and not only philosophically is it the antithesis of one of the basic values in our culture, but studies have shown that there is a tangible negative effect when people lose control over their lives. One study of institutionalized patients, again patients in nursing homes, showed that those patients who were given a choice in the various small activities of the day and a sense of responsibility; they exhibited far greater activity, more happiness, increased interpersonal action and significant improvements in their health as opposed to the control group who could only do what they were allowed to do. So just as we know, again, that elder financial abuse and all elder abuse can have both psychological and physical results, so too can robbing an individual of her autonomy.
Achieving the Balance Between Autonomy and Protection
So, I have a few modest suggestions, and I stress the word modest, for trying to achieve this balance between maximizing the protection of vulnerable adults without needlessly sacrificing the precious autonomy of those who don’t need our protection. And my suggestions are going to fall into those three categories I mentioned earlier:
- What can the law do?
- What can lawyers do?
- What can all of us in this room do?
What Can the Law Do?
So, let’s start with question number one. What can the law do? Well, let’s look a little bit more closely at those state reporting laws that I talked to you about. Remember, these are state laws that signify certain people as mandatory reporters. They must report under some penalty, whether it’s a fine, misdemeanor or something like that; they must report suspected financial abuse, suspected physical abuse, suspected abuse of an elder. An elder usually in these state laws is referred to as somebody who is aged 65 or over.
Now these state laws, these elder abuse reporting laws, are modeled after child abuse reporting laws. And, again, there is absolutely no problem with trying to flesh out revelations of a crime that is usually basically hidden. So, the underlying presumption of the law is that the victim is either too incapacitated or too vulnerable to take any action to protect herself. And as we have already seen, older individuals are generally perceived as vulnerable, feeble and in need of protection. And for older women, this so-called “weaker sex,” you can see this is a double whammy of stereotyping.
So, how does the state justify this intrusion into the private lives of individuals? There’s an age-old doctrine called parens patriae, and basically under this doctrine, the state, the king here, the state is the parent of all of its citizens and consequently needs to take care of its vulnerable citizens. But again, the key behind parens patriae is taking care of those who are vulnerable. But many of these state reporting laws don’t focus on vulnerability. They focus sheerly on age. So essentially, what they do is tell us that age equals vulnerability. These basically infantilize older adults; they objectify older individuals. They assume that all elders are in need of this well-meaning governmental protection. And the price that some elders may pay, as I have mentioned, if they fall into this undifferentiated class of older individuals, then the state will intervene.
So, let me just put this simply. Okay, I, Mary, age 64, can “make up for the sobriety of my youth” by perhaps lending inappropriate amounts of money to my son who’s out of work, or better yet buying extravagant presents for my new boyfriend. (Sorry, Lee.) But if I wait until I am 65, then my doctor, my psychiatrist, my counselor at church and maybe even my lawyer is required to report if any of them suspect that my actions might be elder abuse.
So, what’s going to be the consequence of this? Well, if I know about this, I know at age 65 that not only will my actions be questioned, but they might even be ridiculed, then I am going to stop going to my doctor and I am going to stop talking to my therapist and I am going to stop seeking counseling at church and even stop confiding in my lawyer. So, with this in mind, my first suggestion is simply – take age out of these statutes. There are states that only use the term “vulnerable adult” without an age component. And, the research that I and my students have conducted indicates that those are perfectly efficient statutes.
So then, on the other end of the spectrum, remember I mentioned that a lot of states have these criminal statutes and the criminal statutes enhance penalties if your victim turns out to be somebody aged 65 or over. Well, the way these statutes are phrased is a little bit strange, because these statutes end up protecting criminals like the people who scammed Sara Cochran. For example, the District of Columbia statute enhances the criminal penalties for any crime, such as fraud, identity theft, etc., that, again, is perpetrated against an individual who is aged 65 or over, but then the same statute says it is an affirmative defense (otherwise known as “the perpetrator is not going to get the enhanced penalty”) it is an affirmative defense that the accused could not have known or determined the age of the victim because of the manner in which the offense was committed. So basically, the end result of this is that the ”Sweet Steaks of Australia” is going to be immunized, because they are going to say, “well, how could we know that Sara Cochran was over age 65?” So basically, my second suggestion is not to give them this immunization.
So, on the one end, I think it’s important to take age out of the reporting statutes. On the other end, a criminal who sends out numerous spam emails et cetera et cetera, and one of the people who happens to respond is Sara Cochran, who’s aged 79, and she sends a check, that criminal should not be immunized, should not be able to say, “oh, I had no way of knowing she was over age 65.” In other words, he ran the risk when he started this scam.
So, the third refinement that I’d like to see is going to sound kind of strange. It’s a kinder, gentler way of dealing with the abuse that’s perpetrated by people close to the victim, family members in particular. So, as I mentioned before, the big problem here, the biggest problem here, is that the family members are not going to report; for whatever reason they do not want to get their other family members in trouble. So, these home-grown financial abuses are largely going to remain undisclosed.
So, what are the alternatives? An alternative that is working in the few places that have tried it is a sort of a mediation or intermediation where a neutral facilitator comes in and speaks with the whole family or the whole support group and brings the problem to the surface. And often, once the problem is surfaced, it ends. So there’s an association called the Association for Conflict Resolution that has designed something called elder caring coordination that basically promotes the autonomy of an elder individual while still keeping an eye out for elder abuse that does not have an end, a possible end. And in Australia in 2015, almost 60 percent of the mediators who used mediation in the context of an elder potential financial abuse situation felt that they were able to curtail the abuse. So, like so many family situations, and I know everybody in here understands this, elder financial abuse by a family member is complicated. It’s not the scammer who scammed Ms. Cochran.
With mediation, you can take a nuanced approach to the nuanced problem. Mediation gives you an arena in which the problem can be discussed, and more importantly, an arena in which the victim actually gets to take part. Unlike when adult protective services comes in, the victim gets to take part in her own protection.
So, another way in which our laws could be worked on, at least to help, again, to guard this balance is through state guardianship laws. Now in 2017, the Uniform Law Commission, under the leadership I am happy to say of an ACTEC Fellow, Academic Fellow David English and with the cooperation and participation of other ACTEC Fellows – Molly Ackerly, Debbie Tedford and Linda Whitton – the Uniform Law Commission promulgated a new revised Guardianship Act called the Uniform Guardianship Conservatorship and Other Protective Arrangements Act. This modernized code stresses the importance of involving individuals in, again, their own protection, in making decisions about their lives. And there’s an article in the Act, Article V, that actually encourages the court to opt out of a full-fledged guardianship. Remember, I told you what happened with guardianship. All those rights are lost. But to opt out of that in favor of a more tailored solution that fits the problem.
So, it’s just a very simplistic example, but suppose we have, again, a housebound grandmother dependent upon her grandchild. She looks to him to meet all of her needs. The court typically would come in and decide guardianship or not. But under Article 5, the court can examine, with the help of a number of people who are in fact engaged in this kind of work, examine alternatives, maybe examine ways in which the grandchild doesn’t have such a big role to play in the grandmother’s life, or under this act, if the grandchild is appointed guardian, the act stresses that there will be oversight monitoring of the guardianship. The act prevents the guardian from isolating granny from the other family members and it still promotes granny’s ability to retain her independent decision making wherever she can. So, this has not been adopted widely yet, but I think it’s an important act for states to look at.
This concludes podcast 2 of 3 in our Special ACTEC Trust and Estate Talk. Please tune in for our final episode in the series “Balancing Independence and Vulnerability of Older Adults: What if Granny Wants to Gamble?”, which recommends actions that lawyers can take to protect the autonomy of older clients, especially women.
If you have ideas for a future ACTEC Trust & Estate Talk topics, please contact us at ACTECpodcast@ACTEC.org.
Latest ACTEC Trust and Estate Talk Podcasts
“Taxes Emerging in Europe to Pay the Costs of COVID,” that’s the subject of today’s ACTEC Trust and Estate Talk. Transcript/Show Notes This is Doug Stanley, ACTEC Fellow from St. Louis, Missouri. During the COVID pandemic in many jurisdictions in Europe, there had...