Michael Hackard joined Prudent Money Radio Show's host Bob Brooks to talk about estate and trust disputes in the context of the newly-released Alzheimer's, Widowed Stepmothers & Estate Crimes. Thanks to Bob for a great interview!
Michael Hackard: Thank you for having me back, Bob.
Bob Brooks: You know, it's all about the money. And money can bring about the - I know that you see this - the absolute worst in people, and especially during already difficult situations such as Alzheimer's or a death of a parent. And I guess you find that most people who didn't commit the estate crime didn't even see it coming.
Michael Hackard: Yeah, I think you're right about that. People always in these kinds of cases just express surprise. It's like they didn't see it coming, and you know, even when it's come, they have a hard time believing it. Of course, particularly siblings feel that way, but it also happens when families have been taken advantage of by caregivers or neighbors. It's a surprise.
Bob Brooks: Well, and I appreciate your passion for this subject because that you know, Michael, I'm a big believer in that you talk about these things on the program. And then I have people like yourself come on and talk about it. And this gives this gives the listeners an idea of what to look out for and when we're to get more information, so that you know, hey, this is something that doesn't look right, and I need to do a little bit more investigation.
Michael Hackard: Yeah, you're right, and we could talk about that in terms of how to spot financial abuse, some of the things to look for, and what are some common stories that you see in this area.
Bob Brooks: Well, let's start with disinheritance. A person, of course, has every right to cut someone out of their will or inheritance. Give some examples of when the disinherited have a case, and when they don't have one.
Michael Hackard: The primary examples have to do with undue influence or changes in estate
plans when someone, like with Alzheimer's, who lacks capacity. Now, not all Alzheimer's patients lack capacity, but the idea of undue influence is very old. It goes back into our common law, and it basically means successive persuasion that causes another person to act or refrain from acting by overcoming that person's free will and results ultimately in inequity. So where you see it arise, often people, maybe they lack capacity; or maybe they're simply disabled; or they're lonely; or they're isolated. They have dependent problems or emotional distress, and someone takes advantage of that, someone close to them. So oftentimes where you see it in families that are have been together over the years, and that, you know, are loving families is in the last times or last - maybe it's the last year, or it could be the last week, but that there's someone close to the person who is very ill and convinces that person that everyone else has abandoned them, and that there's only one person that stands between them and being ousted and out on the street. And that's the person, of course, who wants to take everything. And that happens with some frequency. Now, of course, I see it because that's the practice that we're in, so, you know. But it's surprising how many people will have stories, and they'll say, "Well, yeah, that didn't happen to my own family, but it happened to my neighbor, or it happened to somebody that, you know, I'm teaching with or whatever." But it's fairly common.
Bob Brooks: That's a tough situation, obviously, Michael, and I don't know that most people would even - they'd be pretty hurt, pretty mad that that would happen. I mean, what kind of steps do you take legally if something like that happens? Then how do you even prove it?
Michael Hackard: Yeah, great question. And that's why I think it happens with frequency is because it is very tough to prove. But the kind of things that you'll often see is isolation. So you see, maybe it's a grandparent or maybe it's a parent that you're normally close to, and they have a caregiver who basically says when you call, "They're sleeping. You can't talk to them." Or if you show up at the door, "Oh, they're sleeping," or maybe it just gets outright and says, "They don't want to talk to you." Or when you show up at the house, the caregiver is always there, listens in on everything. And another common occurrence is that there's a baby monitor in the room where the elderly person is, so everything that person says is basically overheard by the caregiver. So that's isolation. There are various ways to report it, and I'm not going to say they're all successful because they aren't. But most states have Adult Protective Services statutes, so you can ask Adult Protective Services to go look in on the person. In those areas in our country where say, law enforcement is more proactive, you can actually call law enforcement and say, "I'm afraid that my mother is being taken advantage of. Will you please stop by?" I've seen that successful a few times, but more often than not, truly the only inquiry that law enforcement can make is, you know, "Are you okay?" And of course, the elderly person who's somewhat cognitively impaired is likely to say, "I'm okay." They're not going to say, "Well, my caregiver's cutting me off." They may not even know it.
Bob Brooks: Now, I would assume that if this happens to an individual that these cases are somewhat time-sensitive. I mean, you've got to take action fairly quickly. How does that work?
Michael Hackard: Yeah, it is. This is very helpful to take action quickly. There are different ways to take actions, as I said about APS and law enforcement. The other thing is try to get together a family meeting, all family members that are involved with the senior or elder, so that may be with everyone there, they can address it and ask for transparency. Seek transparency. Seek out, you know, what bills - what unpaid bills the elder has. And what other, you know, are there checks out there with unfamiliar signatures and those kinds of things. That's certainly one way. Recently I've seen more and more families that will actually hire investigators. And they'll go out and find - I've had this one happen - where they're investigating a caregiver and find out that the caregiver and or a sibling of a caregiver did a similar action four or five years ago to someone else. So that can help. And I recently spoke to a group of investigators here in California, and so many of them identified that they wanted to learn this area because they heard from people more and more that they needed the assistance of investigators.
Bob Brooks: This is Bob Brooks, and you are listening to the Prudent Money Radio Show. Thank you so much for joining me today. Talking to attorney and author Michael Hackard about his book Alzheimer's, Widowed Stepmothers & Estate Crimes. This is a good book. This really gets you up the curve on what you need to know if you're in a situation like this with just what to be careful about, what to look out for and what you need to know. You want more information, you can always go to hackardlaw.com. Michael, you mentioned a unique situation where - there's a situation where there's cognitive decline. Let's just say, we'll say the grandfather simply mistakenly left someone out of the will. What do you do if that happens?
Michael Hackard: If it's a simple mistake... Is it pretty common? It is, and it's even - you see it occasionally where people are misnamed. You know, because it's someone with cognitive impairments has forgotten the name of their grandchild or even their child. Those are harder to cure if there wasn't active involvement of a wrongdoer. But where you had active involvement of a wrongdoer, you know, is saying, "Well, by not including my sister Susie, I'm going to get that much more, then." It's easier to overcome on the basis of undue influence.
Bob Brooks: Just a little bit about blended families, and this is one of the conversations that I have when I'm talking to somebody that hasn't necessarily taken care of their estate planning and second marriage. Talk about the potential problems, just in case that there's somebody listening hasn't really thought through this. Because if you go without doing an estate plan, you really could create a lot of
Michael Hackard: Yeah, I'll talk about it. And I'm not picking on widowed stepmothers, so let me start with that. But let me also point out just statistically, women are living longer than men. I was born in 1950, and I, you know, now I'm supposed to live 10 years longer than I was supposed to live in 1950. I'm thankful for that. That's right. And so but there are 11 million widowed stepmothers in this country and less than 3 million widowed stepfathers. So the more typical scenario is this, say, in a second or even a third marriage. And now, if it's a long marriage, so say the second marriage is 35 years, then it's not good going to be entirely surprising that children of the second marriage are going to receive a good part of the estate on the death of the survivor. And we're going to assume for these purposes the survivor is that widowed stepmother. So what happens, though, is there's some statistics. Only about 20% of children get along with their stepmother, and so you often times see estates where the father -the biological father of the first family - changes his estate plan near the end of his life, sometimes to just benefit the stepmother. We're gonna call her the stepmother - solely to benefit her. And then other times to benefit her or her children and cut out all the biological children from the first marriage. And there are a lot of celebrity cases like that. But what's more common are people that, you know, you and I know and run into all the time. And that's a major problem. That whole stepmother problem, that's the reason I write about it because at one point I looked at my just my practice, and I saw about 50% of the cases had to do with stepmothers.
Bob Brooks: Yeah, you write about Alzheimer's and that's something that's near and dear to my heart because my stepmom went through do it. And, you know, let's say that when the individual is of sound mind -the Alzheimer's hasn't really become an issue yet - and they can make decisions on their own, they right up the will and/or a trust. And you would think that, well, everything was taken care of just the way that he or she wanted things to occur. So we know what could go wrong. And thinking that really everything is all tied up, but what could go wrong, Michael?
Michael Hackard: Yeah, what could and what does go wrong is as they lose their memory, their short-term memory, so they're, you know, they've got impaired cognitive ability. And what happens is again, they might even forget that for 40 years in their life they always were going to provide for their children, their biological children. But during the last months of their life, when maybe the biological children have been cut out, or they're only dealing with one child or with the caregiver, that's their complete life at that point. And if they are going to be taken advantage of and they have a lawyer that will do it - and I'm always very critical of that, but nevertheless there are lots of lawyers that will make those changes. But then their life's very limited, and they see that caregiver or the sole child, whoever it is, as the sole beneficiary of their estate. I've been working on this area because it's so common. And there are a few things that leading estate planners in the country say that you can do. And one of them is while the person has cognition, is for that person is to appoint a trust protector. Now that trust protector could be their most trusted child. And the trust protector, it could basically be that the trust shall not be amended without the consent of the trust protector. So you kind of have an insurance policy built in there, so that even if you're kind of going off the rails, or me, if I'm going off the rails, that I have some trusted person who says, "Mike, you can't change that trust without my consent." And that that's a little bit of an insurance policy which helps.
Bob Brooks: You know, it's really interesting to hear you talk about this because I think I would I would fall in the same the same spot. I would just assume, but it's not a good thing, that everything would be just fine. It's almost like you put a lock and key on the estate planning because while they were of sound mind, then they're not of sound mind, but nothing can change. But you're saying, "Hey, happens all the time." And what's even more disturbing is that there's attorneys that can take care of that - they doctor up the paperwork or whatever they need to do make that happen.
Michael Hackard: Right. We take depositions of attorneys all the time, and there are lots of people who like to beat up on attorney, so I don't want to just beat up on attorneys. But it always surprises me when somebody - you just see the crazy things that some attorneys will do, such as change an amendment from someone who doesn't speak English. I recently had that one, and so a trust attorney, you know, puts together a very sophisticated document in English to say, a Spanish speaker. He is not a Spanish speaker and can't explain the document to the Spanish speaker. So in that particular case, he brings in an assistant who only speaks a little Spanish, probably about like me. Enough to count. So, nevertheless, he oversees the signature of a very sophisticated document and claims somehow that the maker of the document, the signer on the document, knew what was going on. But I have lots of different experiences. It's surprising, and when family members hear of these things and they find out they've been cut out, it's like, "Are you kidding me? There are lawyers that would really do this?" Well, there are some. Yeah, it's disturbing is what it is.
Bob Brooks: Michael's book is called Alzheimer's, Widowed Stepmothers & Estate Crimes: Cause, Action and Response in Cases of Fractured Inheritance, Lost Inheritance and Disinheritance. If you have more information you can go to hackardlaw.com. So talk a little bit about some of the things that if you have a parent who does have Alzheimer's, what could you do - what could you be doing to protect them?
Michael Hackard: Okay, first of all, try to have transparency fully on their estate plan, and even if a parent has Alzheimer's, they still may have sufficient capacity to make an estate plan or to change an estate plan. We've gone so far as at times to have such a parent interviewed by a geriatric psychiatrist just to show and to have a record that there is sufficient capacity. But the the danger area is to look out for unpaid bills and checks or documents with unfamiliar signatures. I had a case once where a woman in her 90s was to be paying her caregiver, I think, two thousand dollars a month, $1,000 every two weeks. And what the caregiver was
doing was presenting a thousand dollar check per day and telling the senior that that was her paycheck for the month or for half the month. And I think that she took close to a hundred thousand dollars in about four months. So the other thing, just you kind of have to really watch if the phone calls are being cut off, the visits are being prohibited, or the constant presence of the caregiver. I talked about baby monitors. Those things you've just got to watch. And also understand that none of us virtually are prepared to deal with it. So if you can, seek out counsel. But even in seeking out counsel, the counsel won't necessarily know what to do. I mean, I know a lot of the things to do, but I still see cases where there's not much I can do, not yet.
Bob Brooks: And you talk about situations where you actually - you feel like it's in the best interest to remove somebody that's a trustee. And you give the example of a trustee that, you know, has an addiction problem. Obviously who's probably going to make questionable decisions. How do you even go about doing that, especially if it's maybe a family member?
Michael Hackard: Well, you try to get those - yeah it's probably a family member. And because it's very common that dependent children - I say dependent, and the children may not be working. They're living at home with the parent. They really don't have any income. It's the parent who's paying for their bills and their lodging. So when those people are and oftentimes addicted, so addicted to alcohol or drugs, when they get to be the trustees, you know that that estate, that trust, whether the person's living or not, it's going the wrong way. It's just going the wrong way. So oftentimes it'll be the sibling, you know, a sober sibling of that person who will be able to bring in action in almost any of the states where this occurs to remove that trustee. Now most of the time, the courts are going to prefer that the replacement trustee be a professional trustee. And states have different licensing statutes on that. It's hard to - I've done it before, but it's very hard to replace one sibling with another sibling, because the court often times treat that like, "I don't want to get in the middle of this family argument, but we're gonna put somebody in there who is safe."
Bob Brooks: Well, unfortunately, things can get messy, and you really need to know what you're doing, and being being aware is the first place to start. That's what Michael does with his book Alzheimer's, Widowed Stepmothers & Estate Crimes. If you want more information, hackardlaw.com. Michael, so good to have you on the program.
Michael Hackard: Thank you for having me.