How estate planning documents help prevent elder abuse


With age comes wisdom and weakness more often. While aging is inevitable, it can often be difficult to face as previous routine tasks become more difficult or require the help of another person. Suddenly, keeping up with the latest technology confuses the individual who abandons the project in frustration. Minds become devastated and scam artists become more creative which makes scams more difficult to identify. As a harsh background for this increased weakness, obedient children are rarely visited, and outings with friends become intermittent. Loneliness exacerbates feelings of helplessness that can accompany aging. These factors combined with the ongoing global pandemic and our growing reliance on technology for connectivity are creating the perfect storm for the exploitation of older adults. Studies show that one in ten people over the age of 60 has experienced some form of abuse. Our aging population has never been more vulnerable, and we have a duty to protect them.

Unfortunately, abuse occurs and often goes undetected until months or years have passed, and in some cases it is too late to take corrective action. Telephone and mail frauds come to mind as examples of rampant elder abuse; However, sometimes the abuse comes from much closer sources. A family member, old friend, or even a trusted caregiver may take advantage in case of need. These individuals may justify their behavior due to their increased presence in the lives of older adults. If this person provides access to some necessities such as riding a horse to the doctor or helping with groceries, the situation becomes more complex and ripens for abuse. Choose any newspaper or magazine or browse the news headlines on the Internet and you can find a story about the exploitation of the elderly. It is becoming increasingly common, although it can be prevented.

Obviously, it is difficult to attribute the problem to just one cause. Usually, several factors lead to an abusive situation. As the following example shows, it is a slippery slope. Suppose Denise took on check-writing duties to ease the emotional burden on her newly widowed mother, Molly. Molly is very grateful for Denise’s help and tells her she would like to thank her and offer to pay her grandson Graham’s tuition fees. If Denise turns down the offer, she clearly did nothing wrong. Here Denise had the opportunity to use the money for her own benefit, but she refused. Perhaps Denise’s sense of duty prevented her from stroking the check, perhaps she knew she lacked legal authority, or perhaps she simply wanted to avoid a fight with her brother after her mother’s death.

Let’s say several months have passed and Dennis moves Molly into Denise’s house because Molly starts wandering around the neighborhood. Although there are times when Molly looks like herself, she is in other places. The next time Molly mentions Graham’s tuition, Dennis immediately writes the check. Here, it is unclear whether Molly really intended for Dennis to use the money and whether Dennis had the authority to write the check. It depends on whether Denise is listed as a co-owner of the account or is acting in accordance with the authority granted by a power of attorney or as a successor trustee under trust. Even if Dennis is acting under a power of attorney or trust agreement, in most states, Dennis has a duty to act in favor of Molly. By paying Graham’s tuition fee, Molly likely violated that duty.

Now suppose Denise is in financial trouble and decides to write the check without any direction from Molly or to complete the payee on a pre-signed check. Although Molly has previously expressed her gratitude to Dennis, it is possible that Dennis lacked the appropriate legal authority to spend those expenses and could find herself facing accusations of elder abuse. If Dennis makes an equal distribution to her brother, Sonny, or if Dennis leaves her job to provide full-time care for Molly, it is possible that she is still beyond her authority to make distributions from Molly’s account. The previous example illustrates the difficulty of drawing a bright line regarding behavior, how easy it is for even a well-intentioned person to err, and the importance of protecting the elderly from this type of exploitation.

The simplest and most effective way to prevent elder abuse starts with a well-crafted property plan. The plan should include specific powers that can be exercised by the agent, de facto attorney, or successor trustee. A well-crafted estate plan that specifically forbids or provides express powers instructs the credit institution, financial institutions, and third parties about the principal’s expectations, even when the principal loses the ability to express those preferences. These clear guidelines mean that more people know what needs to happen, which reduces the potential for abuse.

Most states have enacted heavy-handed laws designed to prevent elder abuse. Many also have agencies designed to receive reports of abuse and intervene, if necessary. If a family member has concerns about whether the new father’s friend has nefarious intent, consult an attorney to discuss options and be sure to keep communication open and non-judgmental. Some of these scams elicit feelings of shame, making it difficult for the victim to admit what happened. An estate planning attorney or older attorney can help discern the signs of abuse and suggest checks, checks, and balances to protect against it.

It is important for us to look out for each other. As we continue to beat the ongoing pandemic, we need to encourage interactions and connection with family and friends. Periodically review estate planning documents to ensure that fiduciary assignments serve the client’s best interests. If an agent has experienced a change of circumstances, consider whether naming a trust agent or another trust agent entirely provides relief. These guarantees will help protect the most vulnerable people – the elderly. An experienced estate planning attorney can ensure safeguards are in place to prevent unauthorized access to sensitive information and hopefully prevent fraud.

Terina Stead, JD, MA (tax)
Associate Director of Education
American Academy of Estate Planning Lawyers, Inc.
9444 Balboa Street, Suite 300
San Diego, CA 92123
Phone: (858) 453-2128
www.aaepa.com

Terina Stead
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