Elder Financial Abuse - Seven Key Elements to Combat Financial Abuse

By: George F. Dickerman
Submitted: 2008-07-02 16:23:51
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Elder financial abuse has existed for as long as elders have owned property and money. This article will discuss seven key elements to identify and combat elder financial abuse, and to recover what was wrongfully taken.

Key # 1: Age
In California, an "elder" is defined as someone 65 years of age or older. Age is an important factor because an "elder" is entitled to the remedies provided under the Elder Abuse and Dependent Adult Civil Protection Act, known as "EADACPA".

Key # 2: Mental Capacity
Probate Code 811 provides a list of mental categories that a psychologist or medical doctor can use to assess an elder's mental capacity. When you read this statute, you might think that you'd need a Master's Degree in order to pass this "test".   It covers such assessments as logical thinking, analytical ability, and memory. However, a poor score in any one category does not warrant a determination that the elder lacks sufficient mental capacity.

In elder financial abuse cases, the mental capacity assessment must be focused in the context of a particular transaction, and the conclusion will be whether or not the elder possessed mental capacity at the time of the transaction.

For example, the question may be whether an elder had the mental capacity to sign a grant deed that transferred title of a home to a caregiver. In performing the mental capacity evaluation, the psychologist or psychiatrist will make this determination based upon the elder's performance when the assessment is given.

The bottom line purpose of the test: At the time the elder signed the Grant Deed, did s/he have the mental capacity to understand that title to the home was being transferred to the caregiver?

This can be a challenging task for the evaluator, particularly when the Grant Deed was signed three years or more prior to the mental evaluation. It then becomes a forensic evaluation, and the mental capacity issue may have to be determined by a review of the elder's medical and/or psychological records during the months leading up to the date the Grant Deed was signed. Sometimes, no such records exist and the evidence of mental incapacity must be obtained from other sources.

Key # 3: Identifying Elder Financial Abuse -- Undue Influence

First of all, not all "influence" is undue. A wife of 40 years certainly "influences" her husband, and vice versa. There is nothing inherently wrong with this type of influence.

The type of influence that is "undue" takes place when one person takes advantage of another's weaker state of mind. There are statutes and numerous cases that provide both definitions and factual backgrounds to illustrate various scenarios when such undue influence was used to manipulate and coerce an elder into unknowingly parting with their property and money.

Key # 4: Combating Elder Financial Abuse -- EADACPA
The EADACPA statutes, under the Welfare & Institutions Code, provide nearly every remedy under the sun.   Interestingly, EADACPA was enacted to provide an incentive for lawyers to take on elder abuse cases. Before EADACPA, attorneys were reluctant to accept such cases because their clients were often of ill-health and would sometimes die before their case went to trial. The right to recover "general damages" for pain and suffering would also die. A lawyer may have worked hundreds of hours on the case, and then "lose" because his client passed away before trial.

However, under EADACPA, the case continues even if the elder passes away during litigation. The elder's family (successor in interest) is entitled to post-mortem recovery for pain and suffering, along with all other remedies allowed. Now, attorneys are more likely to accept such cases and devote the time and energy needed to litigate.

To prove an EADACPA claim, it must be shown by "clear and convincing" evidence that the defendant's acts were done with "malice, oppression, fraud or recklessness". This is a much higher burden of proof than the standard of a "preponderance of the evidence" that is required in most other civil cases.

However, a successful EADACPA claim will allow recovery of special damages, general damages, punitive damages, attorney fees and costs, as well as the potential for "enhanced remedies".

Key # 5: Common types of elder financial abuse
Elder abuse occurs in a myriad of ways. Somewhat ironically, the majority of perpetrators are the ones to whom the elder often devoted his/her life to: their children.

Financial powers of attorney are a classic form of financial abuse. Given this document, the "agent" can perform any financial transaction that the elder could, including mortgaging or selling the home and withdrawing money from bank accounts. Placed into the wrong hands, this document can become a "license to steal".

Often, the elder signed the power of attorney many years ago and has forgotten all about it. Or, the bad son or daughter simply tricks their aging parent into signing.

A typical scenario involves a son or daughter who uses manipulation and trickery to have title to the elder's home transferred. Often the home is owned outright, and the perpetrator can easily obtain an equity line of credit or other type of loan.

Unfortunately, these loans are often defaulted on for non-payment, leaving the elder to face eviction proceedings -- totally unaware of how they became a victim.

Key # 6: Civil and Criminal Litigation
Fortunately, there are remedies available. Many of these cases are both civil and criminal in nature.

Penal Code Section 368 is very similar to the EADACPA statute, and can be prosecuted by the District Attorney's Office -- if they have the resources and personnel. California mandates that each county have an elder abuse prosecution unit; however, some counties lack sufficient funds and can spare only one deputy district attorney to handle all of the cases. They are often overwhelmed and unable to promptly respond.

Civilly, these cases can be brought under the EDACPA statues. If the client is 70+ years old, then a motion for preferential setting can be brought that requests a quick trial date. If granted, then a trial must take place within 120 days.

Key # 7: Recovery of property & money
Acting quickly is critical. Action must be taken immediately to stop the perpetrator from stealing any more property or money.

If title to a home has been transferred, then a Notice of Pending Real Property Claim (lis pendens) must be recorded with the County Recorder's Office where the real property is located. Remember, this is a notice of a "pending claim". The "pending claim" is the civil lawsuit that has been filed with the Court. There must be a pending court case (challenging ownership to the property) before a lis pendens can be recorded.

If the bad guy is making withdrawals from bank accounts, then the bank must immediately be notified. Remember: all bank employees are now "mandated reporters" and must alert law enforcement when elder financial abuse is reasonably suspected.

Understanding these seven key elements will assist elders, their family and loved ones to prevent financial abuse and to take quick action to recover property and money when such abuse has already occurred.

Article source: Expert Articles