Elderly nursing home residents are at considerable risk of financial abuse and family members should closely monitor trust fund accounts to ensure funds are not misappropriated. Financial fraud involving nursing homes is a growing problem in the United States. Trust funds are particularly vulnerable as it is easy for administrators to neglect to pay interest on these accounts, fail to insure the accounts, and fail to account for the assets within the accounts.
Understanding Nursing Home Trust Funds
Many seniors choose to have their nursing home manage their financial accounts when they move into the facility. The resident places the funds into the account and can use these funds to pay bills or obtain cash withdrawals. These accounts are supposed to earn interest the same as regular savings accounts.
“Nibbling” at the Balance
Most individuals who illegally withdraw funds from an elderly resident’s trust account do so in small increments. They “nibble” at the balance by making small purchases here and there. They do this because large withdrawals and purchases are likely to be noticed, while smaller withdrawals probably won’t raise red flags with those reviewing the account statements.
In many cases, this type of fraud can go on for years before it is detected. By then, the perpetrator has either drained the account or has moved on to another facility.
Oversight is Lacking
Nursing home staff who have direct contact with residents are required to pass a criminal background check. However, nearly half of states do not require background checks for office workers and those who have no patient contact. These are typically individuals who engage in financial abuse against elderly nursing home residents.
It is estimated that there are thousands of instances of trust fund abuse conducted by nursing home staff each year. Nationwide, only a handful of states require regular, partial, or occasional audits of trust fund accounts.
From 2010 through 2013, federal inspectors issued over 1,500 citations for failure to pay interest, failure to insure accounts, and failure to properly account for trust fund assets. It’s a significant number that highlights the clear and present risk of financial fraud.
It is also a number that highlights the need for greater oversight and enhanced protections for seniors. With financial abuse against seniors estimated to cost billions annually, family members and those responsible for the finances of elderly nursing home residents should take immediate steps to protect the individual’s finances.