Watching an older parent or relative’s savings decline can be unsettling. A lifetime of careful saving may begin to disappear, leaving families wondering whether the money is paying for necessary care or whether someone is taking advantage of a vulnerable person.
In my estate planning and administration practice, one of the most important distinctions I help families make is the difference between legitimate spending and financial exploitation. Not every shrinking account signals abuse. But unexplained transactions, secrecy, and sudden changes in who controls the money deserve attention.
The priority should always be the older adult’s wellbeing, not preserving an expected inheritance.
Ordinary Expenses Can Consume Even a Substantial Estate
Healthcare and personal care are often the largest expenses families underestimate.
In the New York and New Jersey metropolitan area, I have seen families pay more than $15,000 per month for nursing home care and approximately $10,000 per month for assisted living. In some circumstances, home care approaches $40 per hour. When someone needs assistance around the clock, the monthly cost can approach $30,000.
These are examples from my practice, not universal rates. Actual costs depend on the provider, location, services, and level of care required. The larger point is that even a substantial estate can decline quickly when care continues for years.
Housing expenses also continue. Property taxes, insurance, maintenance, repairs, and renovations needed to accommodate mobility limitations can place additional pressure on savings.
Longevity creates another challenge. A financial plan built around retirement through age 85 may look very different if someone lives to 95 and requires increasing assistance along the way.
A declining balance, by itself, does not tell the whole story. Families need to understand what care is being provided, what it costs, and whether the spending serves their relative’s needs and wishes. In Dwyer v. Valachovic, 137 A.D.3d 1369 (3d Dep’t 2016), a New York appellate court rejected an attempt to pursue speculative allegations about account activity where there was no evidence that the person holding a power of attorney had used it for the account in question or received the allegedly missing funds.
Warning Signs That Deserve a Closer Look
Financial exploitation is not always committed by a stranger. Family members, friends, neighbors, caregivers, and people entrusted with managing money can misuse an older adult’s assets. The conduct may involve taking money without permission, failing to repay loans, overcharging for services, or accepting payment for work that is never performed. (CFPB)
In my practice, undocumented “gifts” and “loans” are recurring sources of concern. A relative may discover that an older adult has paid for someone else’s vacation, jewelry, business venture, or personal expenses, with little explanation and no reliable record of what was intended.
That does not automatically establish exploitation. It does create questions that become harder to answer when the older adult has memory problems or difficulty understanding financial transactions. In Pascale v. Pascale, 113 N.J. 20 (1988), the New Jersey Supreme Court recognized that a confidential relationship can raise a presumption of undue influence when a lifetime gift is challenged, but upheld the gifts after finding sufficient evidence that the donor understood and voluntarily made them.
Warning signs include:
- Large or repeated withdrawals that the older adult cannot explain.
- Unusual transfers, checks payable to cash, or sudden changes in spending.
- Unpaid care bills or ordinary household expenses despite apparently adequate resources.
- Pressure to change a will, trust, deed, or other important document.
- A caregiver, friend, or relative who insists on speaking for the older adult or prevents private conversations.
- Fear, confusion, or unusual deference when a particular person is present.
- Sudden secrecy about finances or a new person exercising control over accounts. (CFPB)
These are warning signs, not proof. Their purpose is to prompt a careful review rather than an immediate accusation. (CFPB)
Put Safeguards in Place Before a Crisis
Planning is much easier when the older adult can understand the decisions being made and clearly express personal wishes.
A thoughtfully prepared durable power of attorney can authorize a trusted agent to handle financial matters. A healthcare proxy addresses medical decision making, which is a separate responsibility. Both deserve attention, but neither should be treated as a substitute for choosing trustworthy people and establishing appropriate oversight. (CFPB)
A power of attorney is also not a guarantee against abuse. It gives another person significant authority, and that authority can be misused. In Matter of Ferrara, 7 N.Y.3d 244 (2006), the New York Court of Appeals held that even a power of attorney expressly allowing gifts to the agent did not permit gifts that virtually impoverished the principal and contradicted his estate plan. The New Jersey Supreme Court has likewise distinguished authority to act under a power of attorney from a gift of the principal’s money to the agent. State v. Kennedy, 61 N.J. 509 (1972). The Consumer Financial Protection Bureau specifically identifies requiring the agent to provide regular financial reports to another trusted person as a protective option. (CFPB)
In my practice, I sometimes discuss whether two agents should act together. That can add oversight, but it can also create delays or disagreements. The right arrangement depends on the people involved, the older adult’s needs, and the practical realities of managing care and finances.
The goal is not simply to sign documents. It is to create a workable system of authority and accountability.
Make Transparency Part of the Plan
I encourage families to discuss financial oversight before anyone becomes suspicious or a crisis occurs.
With the older adult’s participation and appropriate permission, a periodic review can address care expenses, major purchases, gifts, loans, and changes in who is helping manage money. The conversation should focus on whether the person’s needs are being met and whether financial decisions reflect that person’s wishes.
Transparency does not mean every family member is entitled to unrestricted access to private information. It means agreeing on appropriate oversight rather than leaving one person with unchecked control.
Good records matter as well. Agents managing someone else’s money should be able to explain transactions and support them with documentation. That accountability can help protect the older adult and reduce disputes over what happened to the funds. (CFPB) In Matter of Metz, 238 A.D.3d 1477 (4th Dep’t 2025), a New York appellate court upheld a surcharge for checks the agent could not adequately substantiate.
Act Promptly When Something Does Not Add Up
When a family suspects exploitation, I encourage a measured but timely response.
Start by recording specific concerns. Preserve available account statements, checks, invoices, messages, and other relevant records. Note dates, amounts, explanations given, and who witnessed concerning conduct. The Consumer Financial Protection Bureau recommends documenting warning signs and keeping records of communications so that the information can be provided to authorities. (CFPB)
Depending on the circumstances and who has legal authority, an attorney may evaluate whether to request an accounting, seek records, or pursue other protective measures. In my experience, waiting until the money is gone can leave families facing difficult proof problems and expensive litigation.
Suspected financial abuse can also be reported to Adult Protective Services or appropriate law enforcement. If someone faces an immediate danger, call 911. (CFPB)
Protect the Person, Not Just the Estate
My concern about elder abuse, particularly financial exploitation, was a major reason I entered this practice area more than 15 years ago.
An older adult’s savings should support that person’s care, comfort, independence, and choices. Spending money for those purposes is not a failure of estate planning, even if it reduces what beneficiaries eventually receive.
The real concern is money being diverted through pressure, deception, or abuse of trust. Thoughtful planning, reliable records, and appropriate oversight can make it easier to distinguish necessary spending from exploitation and to respond when something is wrong.
ABOUT THE AUTHOR
Barry E. Janay, Esq., is the founder and principal of The Law Office of Barry E. Janay, P.C., an estates, trusts, and business law firm with offices in New York and New Jersey.
This article provides general information and is not legal advice. Appropriate planning and protective measures depend on the circumstances and applicable state law.
Barry E. Janay, Esq. is a seasoned New York and New Jersey attorney with over 20 years of legal experience, focusing on estate planning, probate, business law, and complex legal matters. As the founder of The Law Office of Barry E. Janay, he provides strategic, results-driven legal guidance to individuals and businesses navigating high-stakes decisions.
Barry has served as senior counsel and general counsel across multiple industries, bringing deep expertise in regulatory compliance, contracts, and corporate strategy. Known for his direct, no-nonsense approach, he helps clients resolve legal challenges efficiently while protecting their long-term interests.
He is admitted to practice in New York, New Jersey, and multiple federal courts, and has been recognized for his professional excellence and client-focused advocacy.
