Elder Abuse: How Seniors and Their Money Can Be Legally Hijacked

While we like to think that most seniors have family members or at least lifelong friends to help them through their last years, many don’t. The term elder orphan is often used to describe these older Americans. While many have planned for this time in their lives by hiring attorneys to oversee the legal issues surrounding their potential need for care, others may not have been so wise. These seniors could be a prime target for a guardianship company that can swoop in and—legally—take over their lives, including their finances.

Even people who have children can run into this situation. An article in The New Yorker titled "How the Elderly Lose Their Rights" relates the horrifying details of one couple whose daughter struggled to fight the system that snatched up her parents: “A study published this year by the American Bar Association found that ‘an unknown number of adults languish under guardianship’ when they no longer need it, or never did. The authors wrote that ‘guardianship is generally permanent, leaving no way out—until death do us part.’”

As a former nursing-home administrator, Susan Hodges was disturbed by the way legal guardianship was being used to take advantage of many seniors. She was so disturbed, in fact, that she wrote a book titled A Breach of Trust: Your Life Belongs to Them Now. The teaser reads in part:

“You have a wonderful life. You’re running a business, have money in the bank, and get to visit with all your friends and family whenever you like. Then one day you wake up to find someone shoving a pill down your throat in some lowdown nursing home situated in a dangerous part of the city. Without your permission, they’re liquidating your business and making all of your money disappear. You do whatever you can to try to get out of this nightmare, but discover the people who did this to you are simply too powerful. Think it can’t happen to you? Think again. This is the true story of a newly licensed nursing-facility administrator (LNFA) and the people she meets.”

Hodges and HealthCentral communicated by email to explore the issues around guardianship. The following are her personal opinions, based on her experience as an LNFA.

HealthCentral: Susan, let’s start with the basics. What is guardianship?

Susan Hodges: Created by state law, guardianship grants an individual the power to make all decisions—personal, asset related, or financial—for an aged person who has been deemed incapacitated (fully or partly) by a court of law. A guardian’s duty is to protect all the interests and rights of an individual.

HC: Who most often applies for guardianship over an elderly person?

SH: In my experience, for-profit guardianship companies will apply. Lawyers and accountants may also apply.

HC: How is the process accomplished?

SH: I was not privy to any proceedings regarding the guardianship process. These were always conducted behind closed (court) doors and kept very private.

HC: Is it expensive?

SH: As an administrator of a nursing home, I can tell you that residents under guardianship complained that their assets, money, and freedom were stolen. They complained they were forced into the Medicaid program since everything they owned was taken by the guardian. No doubt, the court, lawyers, and accountants were paid. So, yes, it is expensive.

HC: How extreme do conditions have to be before someone can go to court to obtain guardianship?

SH: Aging can make a person very vulnerable. The quote “An aged person is like a potato chip; they can easily break” is true. This being the case, obtaining guardianship is easy even if a person still has the ability to comprehend and is able to perform daily tasks.

HC: Is guardianship reversible?

SH: Very rarely will a guardianship be reversed. It is extremely hard and expensive to overturn.

HC: Obviously, guardianship has great potential for abuse. How often does this happen?

SH: Having seen firsthand what guardians can do, I can say that abuse happens way too often. The court’s influence, power, and control make abuse difficult and almost impossible to stop.

HC: Your book, A Breach of Trust, calls the process “backward.” How so?

SH: We are a nation that should protect citizens’ rights and liberty regardless of age. No one should ever be granted the power to treat another person like a belonging, especially when that person is struggling with age-related issues. Seizing people’s lifetime possessions is bad enough, but also ignoring their civil rights, well, that’s unconscionable.

HC: If someone, perhaps a friend, suspects abuse of the guardianship, can this person actually do anything?

SH: Yes, they can report it to the Human and Health Services department, and/or to the agency’s local or regional offices. In addition, they can inform the police, who will investigate. However, when I made a report once, nothing was done. So, I wrote A Breach of Trust to inform people and make them aware of what was happening.

HC: How can an attorney, judge, or guardianship company gain control and deem an elderly person a ward of the state?

SH: A judge, behind closed doors, with only one physician present, can deem a person incapacitated. Once this happens, a lawyer (or judge) can gain guardianship and the ward can be put into any nursing home. The resident’s rights are often ignored since the guardianship has complete control. Everything a ward owns is taken over by the guardianship company. The guardianship uses the ward’s assets to pay lawyer fees, bank fees, real-estate fees (if a house is sold), and of course themselves. The ward has no say. Any papers such as power of attorney, medical power of attorney, or financial power of attorney will no longer be valid.

Of course, having power of attorney documents and wills is a very good way of trying to protect yourself, but they are not guarantees. You still can become a victim. Lawyers and courts can take control of you regardless of how many papers you have.

Owners of nursing homes have policies in place that do not allow a nursing home to be a guardian. One trigger that can put someone under guardianship, whether that person has private-pay or Medicaid coverage, is if there’s no one who can represent him or her because family and/or friends have passed away.

I suggest seniors consult an attorney, financial adviser, and personal physician to get answers on the best way to handle their affairs. One way to avoid this abuse is to talk to professionals who can tell you how to set up trusts.

Carol Bradley Bursack
Meet Our Writer
Carol Bradley Bursack

Carol Bradley Bursack is a veteran family caregiver who spent more than two decades caring for a total of seven elders. This experience provided her with her foundation upon which she built her reputation as a columnist, author, blogger, and consultant. Carol is as passionate about supporting caregivers work through the diverse challenges in their often confusing role as she is about preserving the dignity of the person needing care. Find out much more about Carol at mindingourelders.com.