Prevention of financial abuse, focus of new institute at Brookdale Center on Aging

Aging, Spring, 1996 by Debra Sacks

The Jacob Reingold Institute at the Brookdale Center on Aging of Hunter College was established in 1994 to address problems of financial abuse of the elderly. This category of abuse includes forgery, misappropriation of cash withdrawals and other money, abuse of joint bank accounts, abuse of automated teller machines, fraudulent use of credit cards, and illegal transfers of property.

The extent of the problem is difficult to determine because of all the forms of elder abuse financial abuse tends to be the most under-reported, causing lack of public knowledge about issues relating to the problem and a limited commitment of resources to deal with it.

That available estimates of the extent of financial abuse of the elderly vary widely is therefore not surprising. Estimates range from 20% of all domestic elder abuse cases nationally, to 34% of all Adult Protective Services cases investigated in Arizona, to 63% of all completed Adult Protective Services cases reported by the Los Angeles District Attorney's Office (Narcea 1988, Blunt 1990, Los Angeles County District Attorney 1994.) Lack of uniform definitions, reporting requirements and data collection mechanisms, as well as the fragmented system involved in serving elderly victims of financial abuse, also contribute to the lack of knowledge of the extent of the problem and to inadequate resources to deal with it.

In the last decade there has been a marked growth in the nation's older population, with the greatest increase in the number of elderly of very advanced age (85+). Although advanced age cannot be equated with mental impairment, a greater likelihood exists that the so-called "old old" have some cognitive impairment that manifests itself through the inability to pay bills or purchase the necessities of daily living; the making of uncharacteristically large gifts; or an irrational belief that it is necessary to hoard or preserve assets to the detriment of personal health and safety.

Eventually, involuntary legal interventions may be necessary to protect the older adult from self-neglect or abuse by others. Such interventions might be a court-ordered guardianship or conservatorship or referral to Adult Protective Services. In recent years, "alternatives to guardianship" have been promoted by advocates of the elderly to reduce undue interference in the life of the allegedly incapacitated elderly, to enable elderly persons to maintain a lifestyle of choice consistent with their personal values and background, and to maximize their participation in financial or other personal decisions.

Alternatives to guardianship consist of daily money management (DMM) services or surrogate financial management services. DMM services might include: assistance with bill paying; credit management; applying for government and pension benefits; submitting health insurance claims; and banking. DMM services are frequently delivered as part of a broader case management function provided by social service agencies or private practitioners. Surrogate financial management services might be durable powers of attorney and/or springing powers of attorney (powers which take effect in the future and are conditional on a special circumstance, such as an illness); trusts; or joint bank accounts. These alternatives have in common that they are initiated and executed voluntarily when the principal has the mental capacity to do so, much like an advance directive for health care decisions. Another surrogate service which may be voluntary or involuntary is representative payeeship under the Social Security Administration or the Veterans Administration, an arrangement in which a third party receives the monthly government benefit check on behalf of the beneficiary.

Daily Money Management services, relative newcomers on the human services scene, are limited in that they can only be used while the elderly person has the cognitive capacity to direct the DMM personnel. DMM services may not be useful alternatives to guardianship in all cases, since court-ordered interventions may still be needed eventually when the older person loses the capacity to direct the DMM provider and has not appointed a surrogate or proxy in advance to manage finances (Wilber 1993). Also, powers-of-attorney and other alternatives to guardianship do not guarantee protection from potential abuse. Notwithstanding their limitations, however, DMM services and other alternatives to guardianship are critical for many older persons who need financial management assistance.

Anonymous Gift for Institute

The Brookdale Center on Aging received an anonymous endowment gift in 1993 to establish the Jacob Reingold Institute to collect information on the extent of financial abuse of the elderly and to strengthen prevention efforts by banking, law enforcement, health care, and social service case management agencies. The Institute's first initiative has been the "Elderly Financial Management (EFM) Project. The Project's initial phase has involved informal and formal fact finding, legal research, and consultations with state officials, legislators, banks, and law enforcement, health care and social service agencies.