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It will soon be more difficult to financially exploit or abuse an elder adult in Maryland.  The Maryland General Assembly in its 2012 regular session passed legislation that makes it a requirement for banks and credit union employees to report suspected financial exploitation of an elder adult if they, while on the job, see or become aware of “behavior or unusual circumstances or transactions” that make them suspicious that the elder adult is being financially abused.  The law goes into effect on October 1, 2012.

The law identifies signs of such potential abuse as “unusual activity in an elder adult’s deposit accounts, ATM withdrawals by an elder adult who previously never used an ATM or debit card and suspicious signatures on checks.” The banks are required to establish a training program to help employees identify the signs of elder financial abuse and inform employees about the report requirements.   Abuse reports must be made either by phone within 24 hours or in writing within three days of the reasonable suspicion.  The reports are to be made to a local adult protective services agency, police department, or a State’s Attorney, and in some cases to a representative from the long term care facility where the elder adult resides.  Failing to file an abuse report can result in a civil penalty of as much as $5,000. 

Kevin Bress, an elder law and estate planning attorney with Pessin Katz Law, P.A. (PK Law) who has been practicing for over twenty seven years, is more than familiar with cases of elderly financial abuse. He has seen the exploitation occur when the perpetrator is a stranger to the elder adult as well as when he or she is a family member or caregiver. 

“But let’s not throw the baby out with the bathwater” said Bress.  A very legitimate transaction that Bress might advise is for a parent to make a large gift of assets to a child to prevent those funds from being lost to a nursing home in the future. 

“I had one client actually bring me the newspaper article about this new law and express fear that he would be in deep trouble if he took his mom to the bank to withdraw any significant funds” Bress said.  He explained this law’s implementation will hinge largely on how the bank personnel are trained to spot what one might call exploitation. 

Bress indicates that a good “work around” strategy exists for families who do not want to risk being investigated with each transaction.  Have the parent execute Maryland’s new Durable Personal Financial Power of Attorney document that has been bolstered by the drafting attorney with additional language to allow the child to move funds away from the parent.  The Maryland law that took effect in 2010 gave new strength to the Power of Attorney (see: ) and now it appears families will be needing that strength to avoid being reported to the authorities.

For more information about the new requirements and what it will mean for banks and their customers, contact Kevin Bress at 410-339-6767 or