It is no secret that Virginia’s population is getting older. According to the Virginia Public Access Project 15.93% of Virginia’s population will be over age 65 by 2020 compared to just 11.19% of its population in 2000. Some view the aging population as an opportunity for financial exploitation, but new legislation passed during the 2019 General Assembly session provides staff of financial institutions with the tools to proactively protect their clients without exposure to liability.
Prior to the new legislation, a staff member of a financial institution was permitted to report suspected financial exploitation to Adult Protective Services, either where the victim resided or where the exploitation was suspected to occur. However, the previous legislation failed to define or provide any guidance as to what rose to the level of “financial exploitation.” Furthermore, a staff member of a financial institution was not expressly permitted to take any additional steps to protect the suspected victim beyond making a report.
Newly amended Section 63.2-1606 of the Virginia Code more clearly defines “financial exploitation” as the “illegal, unauthorized, improper or fraudulent use of the funds, property, benefits, resources, or other assets” of an adult for “another’s profit, benefit, or advantage...”. It also provides several examples of financial exploitation, including “the intentional breach of a fiduciary obligation to an adult to his detriment” or the “intentional failure to use the financial resources of an adult in a manner that results in neglect” of the adult.
More significantly, Section 63.2-1606 now permits a staff member of a financial institution to take additional steps to protect suspected victims of financial exploitation without exposure to liability. Newly added paragraph (L) allows staff of financial institutions to “refuse to execute” or “delay” a transaction or to “refuse to disburse funds” for a period of no more than 30 days if:
the staff believes, in good faith, that such transaction or disbursement would lead to or contribute to financial exploitation or
they have actual knowledge that someone (such as the staff person himself or herself) has made a report of financial exploitation to Adult Protective Services.
So long as the staff member did not act grossly negligent or with willful misconduct then the staff member and the institution are immune from civil and criminal liability.
Financial advisors, bankers, investment managers and the staff at local banks see clients on a regular basis and often understand family dynamics better than other professional advisors, relatives and family friends. This also means they are frequently in the best position to observe financial exploitation of seniors and in the best position to act, if necessary. By passing such legislation the General Assembly recognizes the important role the financial industry plays in combating financial exploitation of Virginia’s aging population and has provided financial services professionals with the tools to protect their clients when needed.
Schooley Law Firm is dedicated to estate planning, elder care, supporting estate and trust administration appointees and staying on top of the laws that impact these subjects.