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Elder Financial Exploitation | An Innocent Child's Dilemma

Elder Financial Exploitation.jpgIt's natural - even good - that we should desire peace and avoid conflict. This desire might pale in the face of injustice. Families strained by the financial exploitation of a parent by a sibling or other close relative find themselves conflicted over calling out wrongdoing or trying to keep the appearance of harmony. That said, there are times in our lives when common decency and respect for the dignity of others will call us action - to painful confrontation. We pay a price for this.

There are common elements to elder financial exploitation stories - stories that clients, potential clients and readers of my book tell me. The focus of an elder financial abuse story can be mom, dad, grandpa, grandma, aunt or uncle - but let's make it easy for discussion - it's mom.

Mom is 84 years old. Dad died five years ago. Mom owns the family home in a trust that she and dad set up when they were in their sixties. The trust also owns securities, bank accounts and some other investments. Mom and dad's trust, consistent with their expressed wishes in their joint lifetimes, provides for equal division of assets to their three children after both of them pass away. This long mutual intent for family equality will be under siege.

Mom's health begins to fail soon after dad dies. Mom's grief is evident - as is her anxiety over making financial and life decisions previously made by dad. Paying bills, insuring the house, paying taxes are all great challenges for her - dad always took care of these things.

At our best, during family challenges our families gather together - even if geographically or emotionally distant - and try to work out the protection of a widowed parent. It's not always easy - one child may take a much greater financial burden while another will assume a greater presence and help in mom's everyday life. Given that most of us - all of us - lack perfection - it is normal that the strains of unequal burdens might create emotional tensions. We live with this and understand that this is life - there are times when we are the greater recipients of generosity and others where we are called to be more generous. So, this is a given. There are events of elder financial exploitation that go beyond this given.

Let's call her Doris. Doris and her two sisters are mom's living children. Doris is the baby. She has encountered suffering in her life - an early divorce, off and on addictions, and difficulty in holding jobs. Her sisters have suffered with her - have reached out to her - they do not wish her ill and they have at various times tried to help her. Now that dad is gone, Doris moves into mom's house. It starts fine - Doris will have a home, she will help mom, and the family will benefit from her presence. Family members understand that Doris is dependent on mom for income, housing, and food. This dependence continues, but a new kind of dependence grows. Mom becomes dependent on Doris. Doris now pays the bills with mom's money, does housekeeping, shopping and all driving. For whatever reasons, that which began as helpful to mom becomes very harmful.

Mom gives Doris her power of attorney. All bank accounts and the Schwab accounts, previously in the trust, are put into mom and Doris's names. Doris takes mom to a lawyer unknown to the family, and mom changes the trust to leave everything to Doris. Doris is very secretive about this and threatens mom that Doris will leave if mom shares this knowledge with anyone. The threat is not merely one of Doris's departure; the warning includes a promise that mom's house will be sold, and mom will be put into a nursing home. Mom's assets will be taken. She will be penniless. There are more than threats - Doris isolates mom from her two daughters, other family members and friends. Phone calls don't go through, and any family visits to see mom are impeded by Doris. This storyline is familiar to those who have suffered through similar events.

Mom is now clearly in a stage of dementia. As far as the family can tell, Doris is keeping mom from doctor's visits, and mom is in nearly full isolation from the family. Family meetings take place, and no one quite knows what to do. Doris and mom will not attend these meetings. A family member calls me - he read my book - The Wolf at the Door: Undue Influence and Elder Financial Abuse - and he hopes that I might have some answers. I wish that I had more answers than I have, but I'll share what I know.

Mom is in a precarious position. She has not been deemed to be incapacitated by the terms of her trust or other legal authority such as a conservatorship. Anecdotal evidence might point to mental incapacity, but this is not enough. Doris has the power of attorney and for the most part stands legally in mom's shoes. Doris's sisters, mom's other children, know that any challenge to what is going on will likely have blowback - payback against the innocent sisters. So, what do you do?

I start with immediate concerns for mom's mental and physical well-being. Most local California police departments are willing to do a welfare check on mom. This sometimes works but many times doesn't. It's very difficult for law enforcement to find "the smoking gun" on a home visit. Mom will likely know that Doris will punish her if she says anything wrong. The same goes for visits from adult protective services (APS). This can be an enormous point of frustration for members of the family.

There are some opportunities for judicial intervention - opportunities but not easy to accomplish. Doris owes her mother a fiduciary obligation as the holder of her power of attorney. Other family members can make Doris account for her actions since Doris became the holder of the power. Many times the holder of a power of attorney like Doris, who is isolating its maker, will become over-confident and abuse the power - an abuse that will show in an accounting. Litigation over a power of attorney is not without costs - oftentimes the defense of the abuse of the power is funded by the innocent maker's funds - diminishing the estate even further and adding on to the misuse of the power.

So, it comes down to this: there are really no ideal and simply executed remedies. Each case has its own facts. The quest to protect mom from wrongdoing is worth it - even if not easily accomplished.

At Hackard Law we safeguard beneficiaries who have substantial estate, trust and elder financial abuse cases where we think that we can make a significant difference and there are wrongdoers who can be made financially accountable for their wrongdoing. We represent clients in most of California's large urban areas including Los Angeles, San Diego, Sacramento, Alameda and Santa Clara.

If you would like us to hear your story, call us at 916 313-3030.

Elder Financial Exploitation | An Innocent Child's Dilemma from Hackard Law on Vimeo.

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