She’s accused of stealing nearly $700,000 from the aunt she cared for — how longer lifespans raise the risks of elder financial abuse

“As people age and live longer, they oftentimes need more assistance managing their finances,” Andrew L. Hope, founder of the estate planning firm Hope Law, told Moneywise. “If this happens, it increases the possibility of these individuals experiencing financial abuse because they are no longer the only ones with access to their bank accounts, property, or other assets.”

The big questions now are: Did abuse happen here, and is this controversial case a sign that a big problem could get much worse as longer lifespans raise the risk of elder financial abuse?

Orr has been accused of abuse and mismanagement

According to the WSJ, many suspicious events occurred after Orr reappeared on the scene, with financial transactions related to Callahan’s estate raising such severe red flags that Callahan’s bank filed multiple reports with Adult Protective Services.

Issues went beyond Orr making unusual withdrawals and opening new credit cards in Callahan’s name, although Orr did those things too. Here were some other incidents:

• One report claimed Orr impersonated Callahan to request a $200,000 transfer, while another said Orr made an unusual request to cash out an annuity.
• A caregiver hired to care for Callahan said Orr owed her $31,000.
• Orr sold stock belonging to Callahan and failed to file a tax return, resulting in $312,000 of liability, including late fees.
• Orr visited an elder law firm, had new estate planning documents drawn up at a meeting that Callahan wasn’t at, and later brought Callahan to sign them. The documents named Orr as trustee and sole heir of a family trust.
• Orr even reportedly bought a $529,000 home in cash and titled it to herself, allegedly because Callahan was in a rehab facility at the time.

Because of the serious concerns, a private guardian was ultimately appointed to prevent Orr’s involvement and to ensure Callahan is properly cared for. The guardian already moved to evict Orr, retitle the homes, and undo the new trust due to undue influence.

From Orr’s perspective, though, she was simply managing Callahan’s challenging care needs and providing the support her aunt required. “Their whole narrative is completely false,” Orr, who is currently incarcerated and awaiting trial, told WSJ. “I would do anything to make sure she was well cared for, but everything got turned around. It just all fell to pieces.”

Are longer lifespans going to increase the risk of elder financial abuse?

Unfortunately, as lifespans increase, difficult situations like this one are more likely to crop up.

“Increased longevity often creates a longer window of vulnerability,” Scott Rahn, founding partner of RMO LLP, told Moneywise. “We’re increasingly seeing families deal with years, rather than months, in which an aging parent may be experiencing cognitive decline, illness, dependence on caregivers or increasing isolation.”

Rahn explained that this creates more opportunities for a vulnerable senior to be exploited after their capacity to understand complex transactions is diminished, especially if they still have substantial assets.

“Longevity also means the people who would have noticed something wrong, like a spouse, siblings, longtime friends, are often gone,” Stefanie L. DeMario-Germershausen, an estate planning attorney and partner at Angiuli & Gentile LLP, told Moneywise.

What can aging individuals do to reduce the risk?

One in nine seniors reports being abused, neglected, or exploited over the past year, and since just one in 44 cases of financial elder abuse is reported, there are many more who risk seeing their legacy disappear before their eyes. Those who want to reduce the chances of ending up in this situation must be proactive to try to avoid it.

“The most effective protection is to build safeguards while you are still able to direct the process,” Rahn said. Hope agreed, adding, “The best thing a person can do to protect themselves against financial abuse as they get older is to establish a comprehensive estate plan while they’re still able to make their own decisions.”

Hope suggested that this plan may include:

• A will
• A trust
• A durable power of attorney
• A health care directive

“For families with substantial wealth, we often recommend considering whether one person should have unilateral control over everything,” Rahn explained. He believes sharing responsibilities or involving a professional fiduciary will make it easier to detect exploitation. He also advises using technology such as credit monitoring and account alerts so that a trusted advisor is notified immediately if something seems amiss.

Finally, Somita Basu, partner and co-founder at Norton Basu LLP, suggested employing professionals to help. “In order to protect yourself, you should have a financial advisor and an estate planning attorney who are reviewing your financial holdings and your legal documents on a regular basis.”