The Problem
The population in the U.S. is aging rapidly with the 65+ age group poised to double within the next 20 years. An unwanted, yet invariable side-effect is that the occurrences of (financial) elder abuse will also experience a remarkable increase. As the level of incapacity progresses among the seniors in our population they become more vulnerable to undue influence leading to financial elder abuse. An example is – dementia. With 10 million people suffering every year from symptoms including memory loss, diminished decision-making and trouble communicating, dementia is robbing our older population of both their daily functioning and their agency. Already, a massive demographic of citizens are vulnerable to undue influence. This concerning trend sets the groundwork for a deeper look into “undue influence”, and how it affects incapacitated people.
What is “Undue Influence”?
Undue influence does not have a one size fits all definition. However, in every situation involving undue influence, common elements emerge: an incapacitated person, unable to make their own decisions, maintains a close relationship with an individual who possesses some level of authority over them. This enables them to make decisions on the incapacitated person’s behalf and ultimately manipulate the situation for their own benefit.
In a legal sense, some states define undue influence as when a fiduciary or confidential relationship exists in which one person substitutes his own will for that of the influenced person’s will. This usually occurs when a mentally or physically incapacitated person creates their will before their health issues begin, and someone convinces them to change their wishes after they are incapacitated. This could happen when a family member isolates the incapacitated person from other relationships, influencing them to distrust others and eventually pressures them to make certain decisions that they wouldn’t make if not persuaded. However, Executors, Advisors and loved ones can do their part to ensure that the wishes of the incapacitated person are being respected and carried out.
What can financial advisors and executors do?
Executors and Advisors should be aware that the overwhelming majority of undue influence is motivated by family members seeking (financial) benefit from committing elder abuse – children and spouses/partners may often be the key offenders. As a financial advisor or an executor for someone beginning to show signs of incapacity, which is preventing them from making their own decisions, it’s important to be aware of the threat of undue influence. An example is – to notice when the person has become highly dependent on a specific person for help with daily functioning, emotional or financial decision-making. Also, be aware if this specific person is seemingly always supervising or accompanying them in a way that seems to be allowing the person to exert control. These could be red flags that undue influence can occur shortly, if not already.
There are measures that can be taken to prevent your client or loved one from becoming a victim of it. Financial advisors could leverage a comprehensive estate planning platform to properly document their incapacitated client’s wishes and financial goals that were discussed when they were still able to make their own decisions. Both financial advisors and executors of incapacitated individuals should be watchful for repeated signs of growing incapacity – memory, hygiene, judgment, mood among other factors and maintain consistent communication with the incapacitated person’s family members and trusted caregivers to watch for any signs of undue influence.
How “smart” digital platforms can help
Another key observation is that prior to the introduction of online estate & inheritance planning platforms, undue influence was much harder to commit. It could take a long time to convince an incapacitated person to change their mind about their wishes and then visit the attorney’s office to get a modified will drawn up. In this new age of all-digital technology, online estate planning platforms make it simple and affordable for users to create estate plans and make unlimited changes (small and large) rapidly.
As a result, it’s more important than ever for such digital technology platforms to embed “smart” safeguards to uncover and detect undue influence from becoming more commonplace for our elderly population.
To prevent (financial) elder abuse from occurring in the first place, Executors, Advisors and loved ones are required to develop heightened awareness to safeguard seniors as they detect signs of oncoming incapacity. The Advisor Portal from OneDigitalTrust leverages “smart” technology to notify Advisors in cases where high(er) characteristics of (financial) elder abuse may exist.
Schedule a demo to see the OneDigitalTrust Advisor Portal in action.
By Alia Hardy
Customer Success Team