Financial Exploitation and Improvident Transfers
| Jurisdiction | Vermont,United States |
| Citation | Vol. 2011 No. 03 |
| Publication year | 2011 |
Spring 2011-#5. Financial Exploitation and Improvident Transfers
Volume 37, No. 1
Spring 2011
Gertrude was illiterate and had always depended on her husband to manage the family's finances. A week after her husband died, her nephew took her to a lawyer and told her she needed to sign some papers. She says she did not understand she was signing away her house for free. The nephew claims that Gertrude intended to give away her house without keeping a life estate, as a form of estate planning. The deed, however, stated that Gertrude retained the right to live in the home and had to pay all the relevant taxes and insurance. The deed was unclear about whether the right to live in the home was a life estate entitling Gertrude to exclusive possession. In the meantime, Gertrude's nephew locked most of the house to Gertrude, forcing her to live in her bare concrete basement with no toilet, and Gertrude may have inadvertently put her Medicaid eligibility at risk. (fn1)
Vermont Legal Aid has identified a form of financial exploitation in which attorneys and lawmakers are uniquely situated to make financial exploitation victims whole again: the transfer of a vulnerable adult's home or other property to a trusted person, or, improvident transfers. Some of the most tragic cases of financial exploitation begin with what a senior thinks is estate planning or Medicaid planning. Based on advice from misinformed or greedy family members, a senior believes that she needs to sign away her home. In other cases, the homeowner does not even understand she is signing away her home.
Hilda wanted to sell a piece of her property to her daughter. When Hilda went to the town clerk's office, the clerk told Hilda that she could not sell the property because she only had a life estate. Hilda remembered that her son had taken her to a law office a couple years ago. The son had paid for the attorney. Hilda was illiterate. Hilda thought she was signing "insurance papers." Hilda was actually signing a deed giving the remainder interest to her son while reserving a life estate for herself. The attorney did not explain the transaction to her. Now, after owning her land for decades, Hilda cannot sell or pass down her property to her other children, and Hilda may have inadvertently put her Medicaid eligibility at risk.
Seniors are often told by relatives that they need to sign away their homes as a form of "estate planning" in order to qualify for Medicaid and avoid probate. This attempt to qualify for Medicaid is more likely to disqualify the senior by triggering the long-term care Medicaid penalty for asset transfers. The completed transfer also prevents the senior from creating a more effective estate plan.
Frank sold his house to his son for $100,000 under the appraised value. The son justified the lower sale price by saying that Frank could keep living there while the son moved in and helped with expenses. Frank did not get any legal advice before the sale. The purchase and sales agreement drawn up by the son's lawyer said Frank was required to vacate the home and leave it "broom clean." The deed did not say anything about Frank retaining the right to live in the home. The son's lawyer had charged Frank a few hundred dollars for "deed preparation," even though the lawyer never talked to Frank about what he wanted the deed to say. Once the transaction was completed, Frank's son threatened to throw Frank out of the house, citing the purchase and sales agreement.
These improvident transfers can demolish a...
To continue reading
Request your trial