According to CARP (Canadian Association for Retired Persons), two-thirds of all elder abuse is committed by family or loved ones, with financial abuse often par for the course (Getty Images/Hero Images)
With the biggest intergenerational transfer of wealth happening right now, the risk of family financial abuse is at an all-time high, experts say.
Approximately $1 trillion in personal wealth will be transferred from one generation to the next in Canada between 2016 and 2026, with roughly 70 per cent of that in the form of financial assets, according to Toronto-based research firm Strategic Insight.
“It’s the crime [financial abuse] of the 21st century,” says Laura Tamblyn Watts, chief public policy officer at CARP (Canadian Association for Retired Persons). “It is a significant and growing problem.”
According to CARP, two-thirds of all elder abuse is committed by family or loved ones, with financial abuse often par for the course.
A 2015 survey, Into the Light, by the National Initiative for the Care of the Elderly, the presence of financial abuse was just 2.6 per cent representing 244,176 older Canadians. But the numbers are likely much higher, says Tamblyn Watts, as participants surveyed did not include those in assisted living or long-term care facilities, or those with cognitive impairment.
“We think, in terms of financial [abuse], it’s more like one in four,” she adds.
So, what does family financial abuse look like, and how does it occur? Here are three situations seniors need to be mindful of.
1) REQUESTING EARLY INHERITANCE
An adult child, grandchild, niece or nephew, for example, may feel they are entitled to the funds, since they will receive them eventually.
“[They’re thinking] I’ve got this particular need right now. I need something done to my house. I need to guarantee something,” says Tamblyn Watts. “Often what we see is they work their way into liquid assets, and at a certain point start to go after more fixed assets like mortgages and guarantees on homes and then into investments as well.”
Abusers may take it a step further, using grandchildren and pets as vehicles for financial assistance, restricting visits, or ceasing care, adds Tamblyn Watts.
“[A common tactic is to say,] ‘Either you give me your cheque or pension, or you’re never going to see your grandchildren again,’” she says, adding: “Where people don’t have grandchildren, pets are used as proxy.
“It’s a very common lever to pull.”
2) CREATING CO-DEPENDENCE
The abuser commonly takes on the role as caregiver, whereby care is exchanged, and used as leverage, for financial help.
One quarter of people that carry out financial abuse live with the victim, according to Kathy Majowski, board chair for the Canadian Network for the Prevention of Elder Abuse – CNPEA,. “So, it might be a spouse ... a child, [or] a grandchild who has some level of caregiver role,” she says.
The abuser may have a social issue, such as an addiction or mental impairment, exacerbating the dependency on the older adult, adds Tamblyn Watts.
“One of the big myths of aging is that older people are really dependent on younger people,” she says. “In circumstances that lead to elder abuse…we see that the younger people tend to be dependent on the older people.”
This dependency has repercussions on abuse victims, including social isolation, a lack of awareness and, in the case of cognitive impairment, total defenselessness, says Tamblyn Watts.
“The abusers are often insinuating themselves into their lives,” she says. “They also try to isolate the person, to reduce the number of intersections. Where they may have had more people reach in and be able to help through a faith community or club, a social group or other friends, now the older person is sleeping, or unable to come to the phone or there is some other reason why you can’t get ahold of them.
“Older people may not even be aware that they are being abused.”
Another challenge? Given the often-close relationship, victims typically don’t report the abuse, even if they are aware of it, shares Majowski. “They don’t want any trouble or shame to the family, or they are fearful of the abuser,” she says.
3) USING EXCUSES AND TACTICS
If it ever comes time to fess up, the abuser may claim their outlandish behaviour was sparked by physical, mental and/or emotional exhaustion from caring for their older relative, says Majowski.
“It’s a narrative that is used to excuse or justify the action,” she says.
Tactics such as making other family members or friends look like the perpetrators, while the abuser is the saviour are also used, explains Tamblyn Watts, describing a scenario where the abuser manipulates the victim into thinking others involved don’t have his/her best interests in mind.
“They use gaslighting techniques that makes it look so very innocent,” she says, “and it creates distress and again further isolates the older person.”
Finally, once an abuser sees their strategy work on one family member, they may try it on another. “It worked with mom, so maybe it will work with aunt,” Tamblyn Watts says.
BE IN THE KNOW
Stay armed against scammers with CPA Canada’s Fraud Protection for Seniors session—a free workshop conducted by a financial literacy volunteer that can be held at your local community centre, library or workplace.
Also, find out how fraudsters are using advances in technology to target seniors.
What can we do as CPAs?
While working with older Canadians who may be vulnerable to family financial abuse, there are signs to watch out for, and ways prospective victims can protect themselves, says CARP. If you have an older client who may be vulnerable to family financial abuse, be on the lookout for these signs.
• Your older client’s financial activity or situation has changed.
• There is a new person in your client’s life, perhaps even moving in, be it a friend or relative.
• There is a shift in your client’s behaviour, such as timidity, appearing scared, or limited eye contact.
• Your client’s physical appearance has changed; they appear disheveled.
• If you visit your client’s home, its appearance has changed, and/or it is disorganized and unkempt.
• Your client shies away from commitments, such as refusing to book an appointment with you.
HOW CLIENTS CAN PROTECT THEMSELVES:
• Educate yourself on the signs and symptoms of elder and financial abuse.
• Find a family member or friend you explicitly trust and make them your safeguard.
• Appoint a Power of Attorney, or review who you have appointed, and make any necessary changes.
• Seek social work, counselling or mediation support, if necessary.
• Work with a trusted financial adviser.
• Consider appointing a trust company to handle your estate.