June 15 is World Elder Abuse Awareness Day. Elder abuse encompasses a range of behaviors including physical abuse, emotional abuse, sexual abuse, neglect, unreasonable confinement or restraint, and financial exploitation. In 2022, Dane County Adult Protective Services investigated 472 calls of elder abuse. Sixty-nine percent of those calls were substantiated as elder abuse. Of those calls, nearly 29% were for reports of financial exploitation. Fifty percent of the abusers were family or close friends of the victim. Researchers estimate that individuals over the age of 60 lose over a billion dollars annually because of financial exploitation[i]. One study found that financial exploitation occurs in 1 out of 18 cognitively intact, community-dwelling adults each year.[ii] It is estimated that Dane County residents lost an estimated $1,352,794 last year due to financial exploitation.
A common thread in reports of financial exploitation is the presence of a joint account. Joint accounts are often quick, easy ways for individuals to grant someone else access to their funds to help them with money management. But, due to the structure of joint accounts, individuals may unknowingly be giving someone ownership of their money. State statutes controlling joint accounts explain that joint account holders are equal owners on all funds within the account regardless of whose money is deposited. Additionally, statutes protect co-owners from liability to the other owners. Co-owners do not have a legal obligation to the other co-owners to explain what they did with any of the money within the account.
Depending on the reason for opening a joint account, there may be options that create the same result with better protections:
I want my family member to be able to easily access my money to pay my bills for me and help me manage my money. You can designate someone as a Financial Power of Attorney at your bank only. The bank will have you sign a form indicating that you want someone else to have access to your account. Importantly, indicating someone as a Financial Power of Attorney means that they can only use the money for your benefit and they have to account to you how the money was spent. It does not give them the authority to keep you from your money.
I don’t want my heirs to have to go through probate. If you do not want your heirs to have access to your money while you are alive but want them to easily have access after your death, you can designate a “Payable on Death” beneficiary on your account. The beneficiary will have no access or control of your account while you are alive. After your death, they will complete some paperwork with the bank and be given any funds available.
I want my family to be able to pay for my funeral. Many individuals want to ensure their final arrangements are covered in order to reduce any burdens on family. If you do not want someone to have any access to your money until funeral arrangements are needed, consider burial insurance or a funeral trust.
Protect yourself from being at risk of financial exploitation. Before giving someone access to your accounts, discuss with your bank the pros and cons of different available arrangements. Tell your bank what your goals are for granting someone access and ask what they think the best arrangement would be to achieve those goals. Also discuss with tax and estate professionals to make sure that any bank designations do not affect your overall estate plans. Take your time. This is an important decision that should not be rushed. Regardless of what arrangement you choose, check your account statements monthly and report suspicious activity to your bank. Never give anyone your password to view online accounts. It is much simpler to take precautionary measures now than to attempt to recover lost funds later.
Lauren Hamvas is an attorney with the Elder Rights Project at Legal Action of Wisconsin, which provides free civil legal assistance to individuals who have been victims of elder abuse. If you would like assistance, contact our intake line at 1-855-947-2529.
[i] Office of Financial Protection for Older Americans, “Suspicious Activity Reports on Elder Financial Exploitation: Issues and Trents,” February 2019. Available https://files.consumerfinance.gov/f/documents/cfpb_suspicious-activity-reports-elder-financial-exploitation_report.pdf
[ii] David Burnes, Charles R. Henderson Jr, Christine Sheppard, Rebecca Zhao, Karl Pillemer, Mark S. Lachs, “Prevalence of Financial Fraud and Scams Among Older Adults in the United States: A Systematic Review and Meta-Analysis”, American Journal of Public Health 107, no. 8 (August 1, 2017): pp. e13-e21.
For more information on how to take action to protect each other from abuse, neglect and exploitation see this World Elder Abuse Awareness Day flyer.
