What Every Trusts and Estates Practitioner Needs to Know About Elder Financial Abuse

• Publication year: 2014
• Author: By Vivian L. Thoreen, Esq., and David G. Knitter, Esq.

WHAT EVERY TRUSTS AND ESTATES PRACTITIONER NEEDS TO KNOW ABOUT ELDER FINANCIAL ABUSE

By Vivian L. Thoreen, Esq., and David G. Knitter, Esq.^*

I. INTRODUCTION AND OVERVIEW OF THE PROBLEM

As the population of seniors continues to grow, elder financial abuse is becoming a preferred vehicle to obtain wealth. According to U.S. Census Bureau data, persons 65 years of age and older comprised 13 percent of the population in 2008.¹ The same group will make up nearly 20 percent of the population by 2030.² A report by the Superior Court of California, County of San Francisco, concluded that "all lawyers, regardless of specialization, will likely find themselves working with people over 60, the age group usually dealt with only by trust and estate attorneys," as one of the results of this growth of older people.³

Unfortunately, with the increasing senior population, there has been a corresponding increase in reports of predatory relatives, neighbors, friends, cons, and crooks taking financial advantage of the elderly. Elder financial abuse takes many forms and often goes undetected. For every known case of elder financial abuse, it is estimated that four to five cases may go unreported.⁴ One study estimates that the illegal or improper use of an elderly person's funds, property, or assets may have cost victims at least $2.6 billion in 2008.⁵

Financial abuse is real and devastating to the elder. Victims of financial abuse have a higher risk of death than non-victims.⁶ Suffering from financial abuse greatly impacts the elder's health, and often the elder's desire to live. A common result of the crime is that an elder is stripped of the financial means to stay in his or her own home and instead must move into a care facility.

Learning to identify potential perpetrators and understanding common scams and schemes is essential to combat abuse. Practitioners (and their clients) need to identify common red flags of elder abuse and the popular tools used by perpetrators in order to better advise their clients and help prevent and remedy elder financial abuse. Remedies can range from providing social service referrals or obtaining emergency orders, to enjoining the abuse or initiating litigation for the recovery of misappropriated funds.

As a result of the growing recognition of elder financial abuse around the country, protections in the form of community, social service and law enforcement responses have become an available resource to assist the elder. Elder abuse cases are now reported regularly in the media. Recent high profile cases have helped the public to become aware of the seriousness of the problem. Still, elder financial abuse is vastly underreported, often a low priority for prosecutors, and a problem that will continue to grow as a result of our changing demographics.

II. POLICY UNDERLYING ENACTMENT OF ELDER ABUSE STATUTES

The Elder Abuse and Dependent Adult Civil Protection Act (the "Elder Abuse Act"), set forth in Welfare & Institutions Code section 15600 et seq., reflects the Legislature's acknowledgment, among other things, that older adults and adults with developmental or other mental or physical disabilities "are a disadvantaged class." By enacting the Elder Abuse Act, the Legislature also recognized that cases of abuse involving these persons are "seldom prosecuted as criminal matters," and that few civil cases are filed due to "problems of proof, court delays, and the lack of incentives to prosecute these suits."⁷ The Legislature's intent in enacting the Elder Abuse Act was to provide that Adult Protective Service ("APS") agencies, local long-term care ombudsman programs, and local law enforcement agencies "shall receive referrals or complaints from public or private agencies, from any mandated reporter submitting reports . . . or from any other source having reasonable cause to know that the welfare of an elder or dependent adult is endangered, and shall take any actions considered necessary to protect the elder or dependent adult and correct the situation and ensure the individual's safety."⁸ In addition, the Legislature sought to enable "interested persons" to engage attorneys to take up the cause of abused elderly persons and dependent adults, which suggests the Legislature intended a broad definition of standing in the context of elder abuse cases.⁹

Originally, the Elder Abuse Act was designed to encourage the reporting of abuse and neglect of elders and dependent adults.¹⁰ While that remains a major component of the Elder Abuse Act as it stands in its current form today, the statutory scheme was later modified to provide incentives for private, civil enforcement through lawsuits.¹¹ The Elder Abuse Act now permits - and even requires - certain heightened remedies subject to statutory criteria and limitations, including attorney's fees, punitive damages, pain and suffering damages even after the abused elder's death, and fees for a conservator who successfully brings an elder abuse claim.¹²

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III. WHAT IS ELDER ABUSE?

Elder abuse includes a variety of conduct committed against an older, vulnerable adult and means any of the following:¹³

1. Physical abuse (which includes assault and battery, including sexual assault, unreasonable physical constraint, or prolonged or continual deprivation of food or water, and the use of a physical or chemical restraint or psychotropic medication for any purpose not authorized by the physician and surgeon)¹⁴;
2. Neglect (which is the negligent failure of any person having the care or custody of an elder or a dependent adult to exercise that degree of care that a reasonable person in a like position would exercise, or the negligent failure of an elder or dependent adult to exercise that degree of self care that a reasonable person in a like position would exercise)¹⁵;
3. Financial abuse (see Sections IV through VII below)¹⁶;
4. Abandonment (which is the desertion or willful forsaking of an elder or a dependent adult by anyone having care or custody of that person under circumstances in which a reasonable person would continue to provide care and custody)¹⁷;
5. Isolation (which includes [1] acts intentionally committed for the purpose of preventing, and that do serve to prevent, an elder or dependent adult from receiving his or her mail or telephone calls; [2] telling a caller or prospective visitor that an elder or dependent adult is not present, or does not wish to talk with the caller, or does not wish to meet with the visitor where the statement is false, is contrary to the express wishes of the elder or the dependent adult, whether he or she is competent or not, and is made for the purpose of preventing the elder or dependent adult from having contact with family, friends, or concerned persons; [3] false imprisonment; and [4] physically restraining an elder or dependent adult, for the purpose of preventing the elder or dependent adult from meeting with visitors)¹⁸;
6. Abduction (which includes removing and restraining from returning to California any elder or dependent adult, and removing or restraining from returning to California any conservatee without the consent of the conservator or the court)¹⁹;
7. "[O]ther treatment with resulting physical harm, pain, or mental suffering" ("mental suffering" means fear, agitation, confusion, severe depression, or other forms of serious emotional distress that is brought about by forms of intimidating behavior, threats, harassment, or by deceptive acts performed or false or misleading statements made with malicious intent to agitate, confuse, frighten, or cause severe depression or serious emotional distress of the elder or dependent adult)²⁰ ; and
8. The deprivation by a care custodian of goods or services that are necessary to avoid physical harm or mental suffering²¹

Broadly speaking, the Elder Abuse Act protects any California resident over the age of 18.²² Specifically, the Act protects 'elders,' that is, any California resident over the age of 65, regardless of that person's physical or mental limitations.²³ Indeed, an elder, as defined may have no limitations of any kind and yet that elder would still be entitled to the protections under the Elder Abuse Act. The Act also protects "dependent adults," California residents between the ages of 18 and 64 who have physical or mental limitations that restrict their ability to carry out normal activities or to protect their rights, including, but not limited to, persons who have physical or developmental disabilities, or whose physical or mental abilities have diminished because of age.²⁴ The definition of "dependent adult" also includes anyone between the ages of 18 and 64 who is admitted as an inpatient to a 24-hour health facility.²⁵

For purposes of this article, the use of the term "elder" includes "dependent adults," as defined by the Elder Abuse Act.

IV. WHAT IS ELDER FINANCIAL ABUSE?

Financial abuse is one of the many forms of abuse against an older or vulnerable adult.²⁶ "Elder financial exploitation is the illegal or improper use of an older adult's funds or property. It has been described as an epidemic with society-wide repercussions."²⁷ According to the National Center on Elder Abuse, elder financial abuse is the illegal taking, misuse, or concealment of funds, property, or assets of a vulnerable older adult at risk for harm by another due to changes in the older adult's physical functioning, mental functioning, or both.²⁸ Succinctly, elder financial abuse is taking, or assisting in taking, an elder's property for wrongful use, or with the intent to defraud, or by undue influence. More specifically, California defines elder financial abuse as follows:

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(A) Financial abuse" of an elder or dependent adult occurs when a person or entity does any of the following:

(1) Takes, secretes, appropriates, obtains, or retains real or personal property of an elder or dependent adult for a wrongful use or with intent to defraud, or both.
(2) Assists in taking, secreting, appropriating, obtaining, or retaining

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