Critter Corner: New Virginia Law Helps Seniors Who are Victims of Financial Exploitation

Dear Magic,

I have heard about many instances of financial exploitation of aged or incapacitated adults, including my uncle who suffers from mild cognitive impairment and doesn’t always make the best financial decisions. Are there any state laws to help protect them?

Thanks!

Hal Pimm

Dear Hal,

Virginia recently passed legislation to help protect seniors and other vulnerable adults against financial exploitation by giving financial institutions more tools to help prevent this crime.

Both the Virginia House and Senate have passed versions of SB 1490/HB 1987, and it was signed into law in late March and will go into effect on July 1, 2019. According to Virginia state senator, Mark Obenshain, “This bill addresses the issue of financial exploitation of older Virginians, which has been on the rise in recent years.”

The law gives financial institutions the ability to “refuse to execute a transaction, delay a transaction, or refuse to disburse funds” if the institutions believe in “good faith” that the “transaction or disbursement may involve, facilitate, result in, or contribute to the financial exploitation of an adult.”

“What we’ve been finding is that sometimes, seniors are exploited by their caregivers or some relative by taking them to the bank and removing cash from their accounts. Once the cash is removed, it’s hard to get it back,” Virginia State Representative David Toscano said. “This gives lending institution some more teeth to make sure that they’re not giving away the money of folks who are being exploited and can essentially stop it before it happens.”

The legislation also grants the financial institution’s staff immunity from civil or criminal liability for refusing to process transactions or for reporting suspicious financial activity as long as these actions are taken with due cause.

The Virginia Department for Aging and Rehabilitation Services reported 1,016 cases of financial exploitation last year. But because most cases go unreported, the agency estimated there were likely more than 44,000 incidents of exploitation that year, costing seniors or other incapacitated victims potentially more than $1.2 billion. The average financial loss per victim was about $28,000, state officials found. State lawmakers have been trying to address the problem since 2013, but legislation has failed in previous years.

Concern Over the New Law

Although this law is well intentioned, it is bound to have some unintended negative consequences. One big concern with this law is that it might make it more difficult for those families desiring to do legitimate and 100% legal Medicaid asset protection, something that the Farr Law Firm helps clients with every day, because banks may start refusing legitimate access to funds that need to be moved and restructured in order to be legally protected from having to be completely spent down on nursing home care. We anticipate the likelihood of having to file lawsuits against banks for our clients to gain access to their own money in order to protect their money in connection with the forced impoverishment that would otherwise occur in connection with a nursing home stay.

How to report elder abuse

To report suspected adult abuse, neglect or exploitation, call your local Department of Social Services or the 24-hour, toll-free Adult Protective Services hotline at 888-832-3858.

Get Your Documents in Order

I strongly suggest that your uncle get his estate planning in order, while he is still competent to make decisions for himself. He should make an appointment with the attorneys at the Farr Law Firm as soon as possible to do so!

Hop this is helpful,

Magic

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