Chapter 7 Financial Exploitation
Library | Alzheimer's and the Practice of Law: Counseling Clients with Dementia and Their Families (ABA) (2013 Ed.) |
CHAPTER 7 FINANCIAL EXPLOITATION
Case Study
Sex for Signatures
On a warm Friday afternoon in Chicago, a boomer son and daughter of a physically healthy 86-year-old man named Eugene sat across the desk from a respected and experienced elder law litigator. They had come to see the lawyer for advice regarding concerns they had about their father and his new friend Olga. This is the story they shared.
"Dad married his high school sweetheart—that was our mom, Doris. They were married for over 60 years. Mom and Dad were always devoted to each other. For many years Mom suffered from debilitating diabetes, and then cancer. Mom loved Dad with all her heart. For the last 10 years, Dad has been Mom's full-time caregiver.
"Mom and Dad had always been very religiously conservative—but for the last fifteen years or so, Mom wasn't even able to attend church. After Mom's death, there was a funeral at the church. It seemed like everyone in the community turned out, because Mom and Dad were so respected. A woman named Olga attended the funeral whom none of us had ever met before. She warmly addressed all of the family members and expressed her condolences for our loss. She appeared to be about 65 years of age and fit as a fiddle.
"After the funeral, Olga began attending church and all of the older adult activities. She publicly declared her faith and volunteered to help out wherever she was needed. After a while, people told us that everywhere that Dad went, Olga was sitting right beside him. I think our dad was quite flattered to have the attention of a younger woman, after all those years of caring for Mom. The relationship seems to have become romantic within a matter of months after Mom's funeral.
"We children had noticed that Dad was becoming 'a little forgetful,' but we considered that just a normal part of old age. Dad has always been close with all of us kids, and he told us about Olga. We were very happy for him to have a companion and to be getting out of the house. Everything seemed to start out okay—but during the last few months Dad has become more withdrawn from family activities. He doesn't call or return calls like he used to. He stopped sending birthday cards to the grandkids (which always had a $50 bill in them). Some of us kids attempted a trip home to see Dad for Thanksgiving—but we were told quite bluntly, 'No, please don't come. I'm going to have Thanksgiving with Olga and her family.'
"Right after Thanksgiving we got a call from a lifelong family friend who is Dad's accountant. He urged us to visit Dad, because he had been visited by Dad and Olga. He indicated that substantial changes in ownership of assets were being discussed. He recommended that we contact you, Mr. Attorney."
After listening to this story, the wise yet cynical lawyer stated, "From my experience, this is probably a case of professional financial exploitation—especially due to the fact that your father may suffer from a bit of dementia. I think it's very probable that there is sexual activity going on between Olga and Eugene. I refer to this as the 'sex for signatures' scam."
Immediately the son and daughter stood up, outraged. "Sir—you have no business insulting our family and our father. Our dad has always been an upstanding man of the faith! I resent your comments and your lack of empathy!" After saying that, they promptly left the office.
On the following Monday morning, the first call into the lawyer's office was from the son and daughter, who had spent the weekend at the dad's house. As soon as the phone was answered, they blurted out to the lawyer, "We can't believe it! You were right. During the weekend we heard the unmistakable sounds of intimacy coming from our father's room. And that's not the worst of it! There was a brand-new Lexus sitting in the driveway, for which Dad had taken out the loan. But the car title is in Olga's name."
The Most Fleeting Human Emotion
"I have observed over 200 contested guardianships with an elder abuse component. In my opinion, guilt is the most fleeting human emotion. From what I have seen, if the abuser had any guilt at the beginning when first reaching over and taking something from a frail, vulnerable senior, it didn't last long. Interestingly, it doesn't stop there. Over time, the thief rationalizes that they are actually owed the money by the parent or grandparent or elderly neighbor from whom they are stealing. Amazingly, it goes even further—to the point that, eventually, the bad guy sees himself as the victim!"—Shay Jacobson, RN, MA, NMG (National Master Guardian), President of Lifec-are Innovations, Inc.
Financial Exploitation
Instances of financial exploitation are on the rise and senior citizens are frequent targets.
What is even more disturbing is that about 90 percent of the financial exploitation of seniors is committed by family members or people that they should be able to trust, such as caregivers.
Seniors, and especially seniors with dementia, are the perfect victims because they generally won't report the abuse. They won't report the exploitations for a variety of reasons, ranging from being embarrassed to fear that if they turn in their relative or caregiver they will be put in a nursing home because there will be nobody left to care for them in their home.
Amy Flynn, an elder abuse supervisor at Senior Services, states that a significant amount of the financial exploitation cases that she sees involve an abuse of a power of attorney.
Flynn notes that the majority of the cases combine financial exploitation and emotional abuse. "They go hand in hand together because an abuser will manipulate mom or dad's emotions in order to exploit money from them. More often than not, those cases do involve some form of abuse of a power of attorney."
Case Study1
Financial Exploitation and Emotional Abuse
In a recent elder abuse case, the daughter constantly told her elderly mother, "You were never there for me as a child. You were a horrible mother. You never bought me the things that I wanted." The mother was suffering from dementia and the daughter convinced her to sign paperwork giving the daughter power of attorney for financial matters.
Soon after the documents were signed, the daughter used her mother's funds to buy herself a vacation home in Florida. Likely, the daughter felt entitled to the vacation home.
Another example of financial exploitation and emotional abuse is when adult children who have drug or alcohol problems move into their parent's home. The children often end up living off of the parent and then they become verbally abusive to obtain money for the purchase of drugs or alcohol. In some cases, they will get their parent to sign documents giving them power of attorney, thus providing easy access to money for drugs and alcohol.
Charles Golbert, deputy public Guardian and supervisor of the Adult Guardian Subdivision with the Cook County (Illinois) Public Guardian's Office, agrees that powers of attorney documents can be problematic.
"They're just too easy to fill in and forge or have somebody who doesn't have capacity to sign," he says. "People are entitled to rely on the documents as long as there is nothing facially problematic about them. They're very dangerous for that reason as well. In fact, I tell people powers of attorney are kind of the scariest documents that I know. I'd say they're the single most abused document we see in our financial exploitation practice."
Practice Pointer: Client Capacity Before Creating a Power of Attorney
It is very important to have a doctor examine a client if there might be any issue with capacity. (See chapter 2 and Rule 1.14.) Always err on the side of being overly cautious.
Amy Flynn has asked many lawyers, "Why did you go ahead and do this power of attorney paperwork when we have documentation that shows that the individual had dementia?" The lawyer will always respond, "Well, they appeared to be absolutely fine when I sat down and met with them."
One of the challenges with some forms of dementia is that it is very hard for a layperson to determine capacity, and even giving a Mini Mental Status Exam (MMSE) can still lead to a false conclusion that people have capacity but, in reality, don't understand the consequences of their acts.
An awful lot of lawyers treat powers of attorney as if they are an unimportant throwaway document, but in a senior's life (particularly one with dementia) it is not a throwaway document. It is empowering somebody to have an absolute license to steal.
It is worth revisiting author Kerry Peck's thoughts on the dangers of the misuse of a power of attorney from chapter 3: "Unfortunately, when a durable power of attorney for property is used inappropriately, it can be used on a regular basis to exploit individuals. People no longer use guns to rob banks; today they use a durable power of attorney. A durable power of attorney, when presented to an unsuspecting teller of a bank, will be used to withdraw massive sums of money."
Case Study.
The Crooked Attorney and a Broad Power of Attorney
Susie never married or had children and ended up outliving all of her relatives. As various family members passed away, Susie inherited their estates. Susie's last living relative, her brother, died when she was 66. After inheriting her brother's estate, Susie had about $350,000 in investment accounts and owned her longtime home outright.
Susie had no other sources of income and needed this money to last for the rest of her life. After her brother died, Susie had no family to look after her. When she reached her early 70s, Susie developed Alzheimer's disease and was soon unable to protect her interests. She began to rely more and more on the family's longtime, trusted lawyer to help her with finances. Susie was incapacitated, but the lawyer had her sign a very broad power of attorney agreement granting the lawyer virtually unfettered access to all of her moneys. Shortly after Susie signed the instrument, the lawyer started...
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