06/15/2014 05:46 pm ET Updated Aug 15, 2014

Treading the Line Between Good Intentions and Abuse

June 15th is National Elder Abuse Awareness Day. Although elder abuse is a painful topic -- one we'd all prefer not to read about or discuss -- prevention requires awareness, so here goes.

Elder abuse includes physical, emotional and sexual abuse, as well as neglect, but this post will focus on the most common form of elder abuse: financial exploitation.

We've all heard of phone, mail order and Internet scams that target seniors, but in the majority of cases, those who financially exploit the elderly are family members and close friends. (See here for some sad statistics and information on this topic.)

I know what you're thinking: "Really? So many people out there are robbing their parents? I'm sure I don't know anyone who does that."

I don't think people start out with the intent to steal from their parents. I think life-long relationships and caretaking roles create a certain coziness that causes a blurring of boundaries.

Here's a typical example: I received a telephone call from "Jane," a would-be client who heard that I handle elder law issues. Jane's mother was living with her for the past three years. Jane said that she had spent a great deal of money on her mother -- not just on food, clothing, and perhaps additional utility bills, but also on home improvements that were necessary for her mother's comfort. So far, so good.

Now, Jane's brother, John, who lives in another state, is demanding that their mother go to live with him. Jane is afraid that if Mom moves in with John, John will "get mom to change her estate plan." There have been no court proceedings, so there was no finding that mom is mentally incapacitated, but Jane feels that her mother is, in fact, mentally incapacitated. Mom has now been asking to go move in with John because, according to Jane, Mom doesn't know how to say "no" to John. Jane wants to bring a guardianship proceeding and be named Mom's guardian.

As Jane spoke, I had several questions. My first question was, "Okay, so you've been spending all this money on Mom. How much money, approximately, have you been spending every year?"

Jane's answer surprised me, as it seemed pretty high for one senior citizen with no major medical issues or expenses: Jane said she had spent, on average $75,000 per year on Mom. Jane hastened to explain that this was because her home had not been "suitable" for Mom and had required renovations.

"Interesting," I said. "What type of renovations did you do?" Jane said they had added a second floor to the house. Wow. Just for Mom -- how nice. "Oh, is Mom's room on the second floor?" I asked. No, Jane said, because Mom actually can't really climb stairs very well, but they had to move around the kids. They gave Mom one of the kid's rooms and moved that child upstairs -- to the new second floor.

"But how did an extra bedroom become a whole second floor?" I wondered. Well, now that there was another person living in the house, Jane apparently felt the need to expand her kitchen into another bedroom, so she put a second bedroom upstairs. Also, the roof needed work anyway, so it just made more sense this way.

I don't quite remember all of the things that Jane said. I recall growing increasingly concerned that Jane had used her mother's moving in as an excuse to do major home improvements that arguably did not benefit her mother at all.

Obviously, Jane is free to spend her money as she wishes. The question was, whose money was she spending? It's true that the way she had been talking, it sounded as though she had spent her own $75,000 per year on her mother.

However, one thing I have learned is to never make assumptions. I also learned to ask very specific questions. "Whose name was on the account that paid for these expenses?" I asked. It was Jane's own account, Jane replied, with more than a hint of indignation. Just to be sure, I asked, "Is anyone else's name on the account?" Surprise, surprise. Mom and Jane had a joint account. Which was originally Mom's account; Jane's name was added after Mom had moved in.

Jane finally realized what I was implying, and protested that she never takes money out of the account for herself, aside from "reimbursement."

Great. Reimbursement. "So then you've been saving receipts, right?" I asked Jane, already knowing the answer. By now Jane was offended. No, she didn't save receipts, but she would "never" use the money for any other purpose, such as for her own personal use.

By this point, it was clear to both of us that Jane would not be my client. Still, I had one final question: "Jane, you told me earlier that you don't believe Mom has mental capacity. How, then, did she have the mental capacity to add your name to her bank account?"

Before she could respond defensively, I explained myself. "Jane, if you want to convince a judge that you should be your mother's guardian, the judge will want to know how your mom added you to her account when you yourself believed your mom lacked mental capacity.

"The judge will also want to know how you can prove that you only spent your mom's money on your mom if you have no receipts to back yourself up -- especially since the additional floor in your home clearly benefitted you personally. Even if you had saved receipts, you would have a difficult time convincing a judge that there were no less expensive options available."

Unfortunately, Jane's thinking is not uncommon. Had Jane called me before her mother moved in, I would have told her this: If you think your mom lacks the mental capacity to properly manage her finances, then you can't, in good faith, ask her to add you to her financial account(s) or sign checks that you have written on her account(s). (Nor can you sign her checks for her if there's any personal benefit to you -- that would be fraud.)

I would be extremely hesitant about having Mom execute a Power of Attorney at that point, as well, and would only do so under an attorney's supervision.

Had Jane asked me about managing Mom's finances using a previously-executed Power of Attorney, I would have advised her to keep meticulous records and save receipts! Don't give anyone cause, at any time in the future, to cast aspersions or make claims against you.

Did Jane's conduct constitute "abuse" or "exploitation"? Arguably so. Jane's mom was vulnerable and mentally compromised. Although I'm sure it was never her intent, Jane used her position of superior power and influence to gain access to Mom's finances, which Jane then used for her own benefit.

On this National Elder Abuse Awareness Day, let's do our part to spread awareness to our friends and loved ones -- for the sake of our families and ourselves.