Dementia and the Growing Prevalence of Elder Abuse

Not Winter Flowers

Not Winter Flowers

I was reading a list serve post yesterday that told of the member’s father (a retired attorney in another state) who got a call from a scammer claiming to be an attorney working on behalf of a grandchild in trouble with the law.  The post was essentially a “heads-up” kind of post to a new mutation on the old long lost grandchild scam.  You can read an article about how that scam works from the perspective of the scammer here.  Sadly, some other members of the list serve community reported a couple instances of this one when it worked successfully, relieving the loving grandparent of a sum of money.  One such scam was traced to a caller in the Ukraine!  If it sounds like it might never happen to an elder you know, think again – these folks are quite sophisticated.

This is an introduction to some news that I recently read about our neighbors in the UK: Dementia is the leading cause of death in England and Wales.  Read the BBC News article here.

This means that as other health challenges are effectively managed throughout one’s old age, dementia remains in the background so to speak, a silent killer.  It’s no surprise that the bulk of these dementia deaths were of women, as women tend to have a longer life span than men.  What I thought was particularly interesting was this figure: Dementia, including Alzheimer’s disease, accounted for 15.2% of all female deaths, up from 13.4% in 2014.  Is this due to more effective means of diagnosing Alzheimer’s (which ordinarily must be done with a brain autopsy or at least a slice of that organ’s tissue to identify those amyloid plaques)? Or is it due to an actual rise in the number of persons afflicted with the disease, as demonstrated in the graph in the article which shows it steadily overtaking heart disease since 2012?

Dementia is a leading side effect if you will – of our longevity.  This news doesn’t just impact our health and longevity of course, factors mightily in the need for further raising the awareness of elder abuse.  Folks with dementia are likely to be victims of some form of elder abuse, neglect or exploitation.   The burden on the rest of us to be able to detect elder abuse is crucial to our collective well-being.  The community plays a foremost role in the detection of elder abuse in its many forms and so community members – through meals on wheels volunteer, peers at a community center or members of a faith community, can play a major part in this effort.  I don’t want to minimize the importance of prevention, but I think our awareness needs to focus first on the detection of the myriad forms of elder abuse.

My introduction to this post was about a scam by someone posing as a person assisting a grandchild – but most of the reported cases do not involve “stranger danger” as it is called in the child welfare context.  Sadly, when the abuser or exploiter is an adult child or other family member (as the vast majority of such cases appear to be) the elder is faced with a difficult choice indeed because their ability to be maintained in their own home is severely compromised.  We have some battered women’s shelters, but no emergency housing for abused elders.   We simply must be able to move forward with the development of services for at risk elders and design some kind of basic architecture of supportive services.  Right now, everything is dependent on where an elder lives.   How many community resources there are largely depends on local and state funding because whether the detection resources, such as law enforcement and adult protection services, are adequately informed to detect elder abuse – makes a huge difference.

Here’s a link to a very informative program from Nashville Public Television.  Especially as we tout “aging in place” as the best kind of living arrangements for most elders, we must face what that can mean for them and the risks it can pose.  We must respond to this call for being present to our elder community members!  I will write more about what looks to most of us to be a challenging landscape of familial relations and unfamiliar ethical territory.

© Barbara E. Cashman 2016   www.DenverElderLaw.org

Elder Financial Abuse of a POA by an Agent – part I

Memorial to Parents at a Child's Wedding

Memorial to Parents at a Child’s Wedding

 

Here’s another post about elder financial abuse and exploitation.  This is the first of a series of posts about one particular aspect of elder financial abuse – the misuse of a general durable power of attorney (POA) by an agent.  As many of us either already know or just suspect. . . . quantity does not equate with quality of life as more of us are living longer!  This concern about how we manage our longevity and plan for incapacity is a phenomenon that will affect us in increasing numbers as the baby boomers continue to grow older.

Elder financial abuse defined: According to the National Center on Elder Abuse (ncea.aoa.gov), financial exploitation (also called financial abuse) is the illegal or improper use of a vulnerable adult’s funds, property, or assets. Financial abuse is a crime, and each state has its own definition of financial abuse.

Here’s an overview of some of the “landscape” of elder financial concerns.  Lots of folks were relieved when Colorado finally passed a mandatory reporting act which allows for much greater law enforcement involvement in such matters.   In the “bad old” days, most folks calling the district attorney’s office were told the alleged abuse or exploitation was a “civil matter” unless it was a sufficiently large amount of money.  I also think it’s helpful to consider this development in light of the Colorado Court of Appeals’ ruling from 2013 in People v. Stell, a criminal case with application to Colorado’s Uniform Power of Attorney Act.  You can read more about that decision here.

A friend told me about a recent issues of the American Bar Association’s GPSolo magazine that focused on elder law.  You can read an article about Advocating for Elders Suffering Financial Abuse and Exploitation here.

There aren’t a lot of statistics available about abuse of financial powers of attorney, but it has shown that most victims of financial abuse or exploitation retain capacity, meaning that the principal can put an end to the agent acting on the principal’s behalf.  This is important because of how a financial POAs work.  They require third party acceptance (by banks, brokerage houses and so forth) and so if an agent is behaving badly, the principal must take immediate steps not just to revoke the POA that gives the agent the authority to act, but the principal must also notify third parties with whom the agent transacted financial affairs or may have done so to inform them of the revocation of the POA and that the agent suspected of misbehavior no longer has authority to act on the principal’s behalf.

I have worked with elders who have been exploited by their children.  It is exceedingly difficult for most parents to come to terms with the fact that their child is stealing from them.  Telling a third party about this can be painful and embarrassing, and unfortunately that is what many exploiters bank on – that the elder will feel ashamed and will not seek assistance.   When an elder contacts me about this I assure them that the majority of the POA abuse cases do seem to involve adult children.  This is not to diminish the number of non-relative predators out there looking for prey in the form of an isolated and trusting elder who may be sucked into a too-good-to-be-true business deal or simply a plea from a stranger or “long lost grandchild” who seeks financial assistance in hard times.

The exploitation of an elder by an adult child agent under a POA does not seem to have any “typical” types of red flags, as they are often dependent upon the nature of the parent-child relationship.  This can complicate matters greatly, particularly if the adult child is one of several siblings and is working to isolate the parent so as to make the exploitation easier.  Many of these behaviors in the POA context – control over the parent’s finances, dictating choices an elder has previously made independently, other life activities involving the “care” of the elder, along with limiting access to others who might provide emotional support or making such communication difficult, bear a striking resemblance to the behaviors of a person using such tactics for their own gain in the form of psychological or emotional abuse.  When you couple an elder’s isolation and frailty with a person who withholds information from an elder and access to others who would be allies, this can be a very harmful mix.

When an agent under a POA keeps information from an elder and does so in a secretive or non-transparent manner, this is a serious “red flag.”  For this post, I will focus on prevention – what an elder needs to consider before signing a POA.

What are some steps people can take to help prevent financial exploitation by an agent under a power of attorney?

  1. Choose you agent carefully! This is by far the most important aspect of using a POA. Name someone you trust with money who isn’t secretive and can answer questions about finances without difficulty
  2. Have a good idea of what your assets are and communicate how you want them to be managed. This will help inform your agent about how they can discharge the fiduciary duty which the agent owes to their principal
  3. In the event of incapacity, it is important that the agent have an idea of what wishes are about what to spend first and how money might be invested or investments consolidated, so that these instructions can be written for the agent (not too detailed, because things are always subject to change); and whether the agent has the authority to make gifts.
  4. Picking an agent who will take extra care in matters regardless of the principal’s capacity. Keep in mind that capacity and competency are not typically either/or kinds of propositions.  Just because someone has been diagnosed with dementia doesn’t necessarily mean the person lacks capacity.  Conversely and more commonly, an elder often does not receive this diagnosis (which often isn’t conclusive of much of anything).  Dementia can often be a long and winding path with many periods of lucidity or intermittent “sundowning.”
  5. Remember that a POA remains revocable as long as the person retains capacity to revoke it.  The principal should have some idea of what would constitute grounds for firing an agent or revoking the POA and how easy or difficult this might be on an emotional level.

So what might this kind of POA abuse or exploitation look like?  Often the principal’s major asset is the home.  Is an agent transferring the principal’s interest or a partial interest in the principal’s home to the agent?  What I have seen on more than a couple occasions is an agent use a quitclaim deed to accomplish this transfer.  One was for “safekeeping” – the agent was afraid that a sibling was going to be given an interest in the property, so the agent transferred to herself first (!); and another transfer was “just in case” mom needed to qualify for Medicaid later one, at least that was the rationale for relieving her of her sole asset.

In my next post on this topic, I will be looking at the steps an elder can take to stop an agent and remedy a situation created by a misbehaving agent or an agent who has been financially exploiting or abusing an elder.

© Barbara Cashman 2015  www.DenverElderLaw.org

The Durable Power of Attorney and Financial Abuse of Elders

Four Generations of Family

Four Generations of Family

I’d like to start at the beginning with some terms. I’ve written about them before. . . .

A general durable power of attorney (POA) is an arrangement where one person (the principal) appoints another person (the agent) to act on behalf of the principal regarding matters specified within the scope of the POA.   Under The Uniform Power of Attorney Act, which is Colorado law, powers of attorney executed after Jan. 1, 2010 are by default “durable”  meaning it can survive the disability or incapacity of a principal.  A POA is an important tool people can use to allow others to assist them in the event they need help managing finances.  Another important detail of note is that the POA is also by default a “standing” power.  “Standing” means that the POA can be used as soon as the document is executed by the principal.  This doesn’t mean people rush out to use them.  I usually tell my clients that I hope they never have to use these documents (or more accurately, that their agents will never have to use them) but they are ready to go if needed.  Remember that one of the primary purposes for a durable POA is to keep people out of having to go to probate court for a protective proceeding like a conservatorship. One of my more important questions to a client when considering the use of a POA and who to name as agent concerns trust and accountability.

What is financial abuse of elders?  It can occur on different levels, including; Inadvertent or careless behavior; negligent misuse of a position of responsibility (like agent under a POA); and intentional misuse or conversion of an elder’s money or property.  Colorado’s new law will soon require certain persons to be mandatory reporters of elder abuse.  In Colorado we have AARP ElderWatch, which is a partnership between the Colorado Attorney General’s office and the AARP foundation.  You can get more information about that here.

What are Some Steps toward Prevention?

The National Criminal Justice Reference Service has a good and fairly up to date listing of resources about fraud and financial abuse of the elderly.

It is important to distinguish between types of elder financial abuse: by those scammers who are strangers looking  for easy prey in the form of isolated, lonely, physically or mentally challenged or disabled elders; by adult children, grandchildren or other family members or friends who may be “impatient heirs” who may not be willing to wait until the elder dies to inherit from them.  Temptation is simply too much for many people!

Transparency is another important safeguard for a principal and to help the agent understand there is both assistance and oversight available when needed.  If the agent knows there is likely to be someone “looking over their shoulder” – whether it is another sibling, a professional, or a reporting requirement, this can encourage good habits on the part of the agent that benefit the principal. Other considerations include:

having another set of eyes watching bank and investment accounts

using a professional fiduciary as agent or for bill paying purposes

What makes financial abuse or exploitation of elders difficult to detect?

  • Shame or embarrassment on the part of the elder, particularly when the abuser is a child;
  • Elders often feel a loss of autonomy and have discomfort with vulnerability;
  • Manipulation and Domestic violence type behaviors by person in control of the money; and
  • The fragility of elder’s emotional and physical health.

Elder law attorneys typically have a network of people and both public and private resources that can assist an elder victim of exploitation or abuse.  In a follow up to this post I will talk about the agent’s “job description” and fiduciary duties, along with some ways of detecting elder financial abuse.

 ©Barbara Cashman   2014    www.DenverElderLaw.org

Financial Abuse of the Elderly and the Durable Power of Attorney

You might be wondering about the ability of elder law attorneys to curb abuse of durable powers of attorney (POAs) by agents who are abusing their authority.  With the ready availability of durable power of attorney forms on the internet, it is simpler than ever to get such a document in front of an elder for their signature.  Unfortunately, it can lead to problems later on because many people don’t understand how a durable power of attorney (or general durable power of attorney, for financial affairs) is designed to work.

A general durable power of attorney (POA) is an arrangement where one person (the principal) appoints another person (the agent) to act on behalf of the principal regarding matters specified within the scope of the POA.   Under Colorado law, powers of attorney executed after Jan. 1, 2010 are by default “durable.”  What makes a POA durable is that it can survive the disability or incapacity of a principal.  A POA is an important tool people can use to allow others to assist them in the event they need help managing finances.

Sometimes I represent a principal whose agent under their POA is behaving badly.  What I often find with POAs is that very few people who have executed them (the principals) really understand how the document is designed to work.  Compounding the problem is the fact that many of the agents acting under POAs do not have a grasp of how they are to perform as agents and they are unfamiliar with the kind of obligations they owe to their principal.  I will use some examples to generally illustrate this kind of situation.

What Can Happen with an Ill-Informed or Rogue Agent:

 

  1. After the principal signs the POA, agent promises to take care of principal and then “takes over” everything and principal is left in the dark and made to feel helpless by their agent who is now “running the show” and not listening to what principal wants;
  2. Agent relishes the new found power over the elder parent – I have heard in this context the agent express  “I have absolute power of attorney over you” – you can imagine how this makes the principal feel – the principal who retains the ability to revoke the POA and fire the agent (as long as principal retains capacity to do so);
  3. Agent is acting under the POA  but is treating the principal’s assets as if they were his or her own assets and not those of the principal, as agent may mistakenly believe that this is one of the purposes of a POA; and
  4. Agent may think, believe, or try to convince others that there is nobody else in the family who cares about the elder principal (typically a parent or other family member), and therefore  whatever agent decides to do for the principal will be just fine, since no one else is looking out for the principal.

What the Law Says:

  1. The principal is “the boss of” the agent – not the other way round. The durable POA is a document designed to prevent the need for a protective proceeding (an expensive trip to probate court) and as such is designed to make the principal’s life easier by giving legal authority to an agent to conduct financial transactions on principal’s behalf.  The agent is under a duty, pursuant to Colorado’s Uniform Power of Attorney Act, to provide information to his or her principal.
  2. To the extent the principal is able, he or she directs the activities of the agent.  If principal is unhappy with agent’s job performance, they may revoke the POA and terminate agent’s authority.  This can be complicated if agent has already gained access to a principal’s accounts, as the third parties who recognized the POA and agent’s authority to act must be notified.
  3.  This behavior by an agent is known as “self-dealing” and is not allowed.  An agent owes his or her principal certain fiduciary duties to take care of principal’s assets.
  4. The majority of elder financial abuse in the POA context is perpetrated by an agent who states to others and may believe themselves – that they are the only one who is “helping” the principal.  Sometimes an agent may adopt tactics that are similar to those used by perpetrators of domestic violence – including verbal and emotional abuse, controlling access of others to an elder principal, and alienating the elder from others so that they will be less likely to come to the elder principal’s aid.

From this perspective, I see many disadvantages of a DIY (do it yourself) POA document.  When I prepare durable POAs for clients, I make sure there is the requisite level of trust that the principal has in the selected agent.

It is important that, if you do hire an attorney, they give you adequate information about the importance of naming the right person (especially about avoiding the wrong person) as agent.  As principal under a POA, you may also want to consider whether it is approrpiate for your attorney to be able to speak with your agent about using the POA – that typically requires a waiver of the attorney-client privilege.  Confidentiality is a hallmark of the attorney-client relationship.  If one of my clients, for example an elder principal who executes a POA, answers yes to my question about whether it is okay to speak with his or her adult child agent about how to execute the principals’ wishes according to the POA, I do my best to ensure the client understands what that means and I get that consent in writing.  If you are interested in more of the technical aspects of the fiduciary relationship owed by an agent under a POA to the agent’s principal, read my colleague Dennis Whitmer’s article here.

To assist in actually using the document for its intended purpose, I typically give my POA clients an instruction sheet so that when the client (the principal) talks to their agent about what they want done and under what circumstances they should act on principal’s behalf, the agent will have some instructions about things they must do for the principal and actions they must avoid.  I usually tell clients that I hope they never have to use their POA, but in the event it is needed, it is important that it be “ready to go.”

Mismanagement and abuse of authority by an agent acting under a POA is a problem.  Many elders feel ashamed to talk about the harmful actions of an adult child, and sadly, this can contribute to the loss of security and further isolation of an elder principal.   If you suspect that an elder is suffering financial mismanagement, exploitation or abuse at the hands of an agent under a POA, it is important to know that you can help – don’t wait until it is too late.   The Colorado Coalition for Elder Rights and Abuse Prevention has a helpful website with links to resources.  In addition to criminal penalties for abuse of a POA, there are also civil actions available for redress by a wronged principal.  In a recent trial (March 2013) in Jefferson County district court, a jury returned a verdict in favor of the plaintiff (principal of a POA) who sued her (agent under POA) daughter for abuse of a POA by transferring her mother’s interest in a house to herself.  On claims for civil theft, breach of fiduciary duty, breach of contract and unjust enrichment, the jury found for the plaintiff on all claims and plaintiff was awarded attorney’s fees and costs.  (Hoit v. Newbrough, 11-CV-5117)

 ©Barbara Cashman 2013     www.DenverElderLaw.org