MEREDITH | PC

Congress Addresses Elder Abuse by Guardians, At Last

This news will come as a relief to the many families grappling with the frustration of a court-appointed guardian, who is not acting in their loved one’s best interests.

Court-appointed guardians and conservators who are more concerned with their own gain than being responsible and caring about individuals and families, will soon be under the watchful eye of federal officials and subject to prosecution, as reported in an article appearing on creators.com, “Congress Steps Up to Control Court-Ordered Guardianships.”

It’s a long-overdue first act in thwarting the obvious abuses of this mostly secret system. Research shows there are at least 1.3 million Americans now living under guardianship control with $50-300 billion in assets—at risk for exploitation.

Both houses of Congress have passed the Elder Abuse Prevention and Prosecution Act, which is designed to bolster the laws on elder abuse, neglect, and exploitation, including those by telemarketers and email scammers.

Congress has also now finally acknowledged the nationwide issue of judges who pass over family and appoint outside for-profit guardians to handle the financial and personal affairs of the elderly. This can mean that hard-earned estates are wiped out, and inheritances end up paying the fees of total strangers.

There are many appointed guardians who help the elderly with no family members or unavailable family members to help them in their last years. These kind people handle all aspects of seniors' lives, such as medical matters, finances and funeral arrangements.

If President Trump signs the bill into law, the Department of Justice would assign at least one assistant U.S. attorney in each federal judicial district to investigate reports of wrongdoing by guardians. The assistant U.S. attorneys would have the authority to ask specially trained FBI agents to help with these investigations. The law would also mandate that the DOJ to set up an elder abuse resource group to facilitate information-sharing among federal prosecutors. Within 60 days of the president's signing the bill, Attorney General Sessions would designate a DOJ elder justice czar to run this new investigative process.

The Americans Against Abusive Probate Guardianship and other family-centered advocacy groups are pleased that Washington has now acknowledged there is a big problem with state guardianship systems that see judges declare absent citizens as "incapacitated," taking as truth the claims of one family member over all others and continuing to appoint questionable guardians in lucrative cases without much supervision.

AAAPG's research has found that federal investigators are already actively looking into questionable guardian practices in at least six states: New York, Pennsylvania, Rhode Island, Florida, Washington, and New Mexico, where a 28-count indictment on charges of conspiracy, fraud, and theft was recently unsealed against Ayudando, a private guardianship company. More indictments are anticipated against other guardians.

One thing this new bill doesn't do is address the problem with the judicial system. Judges appoint guardians with little or no follow-up, in a system that is so entrenched and unaccountable that only action on the federal level can remedy it.

Another way this legislation falls short is that it does not deal with the lack of monitoring of the number of Americans whose lives and estates are held in guardianship. There is no provision made for a centralized system whereby complaints can be lodged against unethical court appointees. With no means to track or register unscrupulous guardians, the legislation does nothing to stop them from being appointed again.

Reference: creators.com (October 7, 2017) “Congress Steps Up to Control Court-Ordered Guardianships”

Fake Law Firm Website Scamming Seniors

Here’s another reason to meet with your estate planning attorney face-to-face. An overseas-based scam is targeting the elderly with a website that uses photos and content stolen from real law firm websites.

A website purporting to be an estate planning law firm is the subject of a lawsuit from the Houston Bar Association, which is trying to get the site shut down. According to the Houston Chronicle, the fake firm, which calls itself Walsh & Padilla, is targeting elderly people and offering estate planning services.

In reality, the ABA Journal notes, in its article, “Fake law firm website uses real lawyers' pictures to fleece consumers, bar lawsuit says,” the scheme’s website appears to be operated from South Africa and uses photos of lawyers taken from real law firm websites. The scammers mail letters to elderly people telling them they’ll be getting life insurance proceeds, after they provide their bank account numbers and other financial details. One senior was scammed out of $14,000, the lawsuit says.

The bar association obtained a court order to shut down the website.  It is now trying to locate the web server and to serve the restraining order. The bar has also filed a criminal complaint with the local prosecutor’s office.

Walsh & Padilla marketed its real estate planning legal services to unsuspecting elderly clients on a website displaying professional looking attorneys attired in suits and ties.  However, a closer look by the Houston Bar Association discovered that the law firm was fictitious and the site was created to scam seniors out of their life savings. The site has actual contact information, including a working phone number with an automated voicemail system that connects callers to the box of partner “Jonathan Walsh.”

Walsh & Padilla was first noticed by the Houston Bar Association, when its president received a call from a Houston law firm letting him know that the photo of one of the association’s partners appeared over the name “Jonathan Walsh, B.A., J.D.”

An estate planning and probate attorney in Houston received calls from Canada.  He discovered that his estate planning law firm’s website had been duplicated by the fake firm. A Canadian resident was suspicious after being contacted by Walsh & Padilla, alleging that a relative in Houston left him a $6.2 million life insurance policy. Fortunately, the caller knew to question such an outsized claim, before sending his bank information.

Reference: ABA Journal (June 26, 2017) “Fake law firm website uses real lawyers' pictures to fleece consumers, bar lawsuit says”

Famed Rocker Jerry Lee Lewis Sues Daughter for Elder Abuse

Court documents have been filed by a rock ‘n roll legend accusing his daughter and her husband of spending his money, drugging him and forcing him to live in a filthy house.

This is not a pretty story, and it is proof that fame and fortune do not guarantee anyone a happy ending. Rock and Roll Hall of Fame member and musical icon Jerry Lee Lewis, 81, is suing his daughter Phoebe and her husband for committing elder abuse in a big way.

According to Hollywood Life’s article, “Jerry Lee Lewis Sues Daughter For Elder Abuse In Lawsuit: Shocking New Claims,” the singer, known for his hits from the 1950s like “Great Balls Of Fire” and “Whole Lotta Shakin' Goin' On,” accused his daughter Phoebe and her husband Ezekiel Loftin of taking at least $5 million dollars of his money and keeping him in terrible living conditions.

Lewis said that his daughter gave him drugs and made him stay in a moldy house, according to the court filings obtained by media outlets.

Reports state that Phoebe managed Lewis’s career from 2000-2012, while keeping the singer on “heavy cocktail of psychotropic drugs.” Lewis claims that he has had to resort to wearing an oxygen mask, because of the extent and prevalence of mold at his home.

Lewis also claims that his daughter forced him to tour the country, despite his poor health.

Lewis had previously filed a lawsuit against Phoebe’s husband Ezekiel for spending roughly $5 million of the singer’s money on luxury cars, real estate and plastic surgery, according to TMZ. Lewis recently added Phoebe’s name to the lawsuit.

Lewis’ immense musical and performance talents have long been accompanied by an equally outsized personal life. His marriage to daughter Phoebe’s mother made headlines in 1957 when it was learned that Myra Gale Brown was only 13, not 20, as stated on the marriage certificate, as well as being his cousin. In 2012, he married for the seventh time, to Judith Brown.

Reference: Hollywood Life (March 5, 2017) “Jerry Lee Lewis Sues Daughter For Elder Abuse In Lawsuit: Shocking New Claims”

Growing Problem of Elder Abuse Takes Many Forms

Telephone scams and theft of prescriptions pills are among the many different types of elder abuse, but in all instances, the numbers are rising.

It is estimated that more than $2.6 billion dollars are lost to elder financial abuse and exploitation, according to The Hillsdale (MI) Daily News in “Understanding Elder Abuse.” Another statistic of concern: The Administration for Community Living reports that one out of every ten people age 60 and older who live at home experiences elder abuse of some kind. Also, the administration reports that these numbers are probably on the low side because so many victims are unable to report the crime—or are afraid that reporting the crime will make their situations worse.

When it comes to scams, IRS phone scam are popular. A scammer calls a senior and threatens prison time because the senior owes the IRS money. In reality, the IRS doesn’t call people.

Unfortunately, many senior citizens are the target of scammers through phone calls, email and postal mail. Scammers can use charm, intimidation or scare tactics to convince their victims to hand over cash or credit card information.

Also, many seniors don’t look at their Medicare Summary Notices (MSNs), which are received quarterly. This provides details for all of the services received and what Medicare will pay. It’s not a bill. It’s a summary of services and Medicare payments. Keep a log of when you go to the doctor or have a test or treatment so you can compare what you actually received to what Medicare paid.

There also can be problems with seniors who become attached to a caregiver, whether paid or not. This can lead to poor choices, especially when a caregiver has financial or family issues and shares these problems with a sympathetic senior. Frequently the senior can’t afford to help financially but will still do so because of his or her attachment to the caregiver.

Theft of prescription drugs by family members is another problem for many seniors. One official noted that often seniors have to choose between buying medication and purchasing food or paying bills. When the medications are stolen, their situations become even more dire. Many social service agencies are working to reach seniors with a message that they can and should ask for help if they have been victimized. It is not how they expected to spend their golden years.

Reference: Hillsdale (MI) Daily News (July 13, 2016) “Understanding Elder Abuse”

Increasing Instances of Financial Elder Abuse / Dallas, Texas

States are looking for ways to protect seniors from a dramatic rise in financial elder abuse, but the financial industry is not yet comfortable with the role of reporting.

The number of financial fraud complaints from people who are 60 years and older in 2014 more than doubled from 2010, as tracked by the FTC (Federal Trade Commission). The huge leap may in part be attributed to an improvement in reporting these complaints, but regardless, the jump is enormous and must be taken seriously. The financial industry is pushing back against calls for legislation, saying that proposed new laws could result in a vast number of false reports.

The Wall Street Journal says that American retirees are exercising greater control over their finances with the decline in traditional pension plans. The article, "Officials Seek Clampdown on Elder Fraud," explains that the complexity of managing and investing savings poses a challenge, particularly as the U.S. population ages. Especially with more people projected to get dementia, this may open up the door to more exploitation.

Fraud can be anything from sweepstakes scams and bogus investment schemes to dishonest caregivers or family members stealing the senior's savings. In some instances, investment advisers or stockbrokers have been found guilty of churning accounts through unnecessary trades, resulting in high fees or losses.

Statistics show that seniors lost at least $2.9 billion to financial abuse in 2010. That was an increase of 12% in two years, according to Met Life. To help prevent this, a coalition of state securities regulators is proposing a model state law that would require financial advisers — including brokers at large investment houses and independent advisers and their supervisors — to report suspected elder financial fraud to both a state securities regulator and an adult protective-services agency.

The bill would require immediate reporting by a financial adviser who "reasonably believes that financial exploitation" of an older person "may have occurred, may have been attempted, or is being attempted." The proposed legislation affords brokers and advisers civil immunity from privacy violations for reporting suspected fraud and gives them the authority to place a hold temporarily on suspicious account disbursements.

Supporters say advisers and brokers are in a prime position to flag early warnings about exploitation. However, financial-industry trade groups are pushing back, arguing that the reporting requirement would overburden state agencies. And some financial advisers worry they could be hit with a lawsuit if they miss an abuse case since about 40% to 50% of all "red flags" of suspicious activity turn out to be false. This is according to the Securities Industry and Financial Markets Association, the main Wall Street trade group. But a "voluntary" reporting system would let securities firms look into these claims in-house before going to authorities.

Roughly half of the states require elder fraud reporting by certain financial professionals, but these laws don't always extend specifically to financial advisers. And all states have an adult protective-services agency to investigate reports of abuse, neglect, and exploitation of the elderly; however, dementia, embarrassment, or reluctance to report family members all contribute to low disclosure rates. In fact, a 2014 survey found that 44% of agency officials said financial institutions were frequently unwilling to provide a client's records, and 40% reported long delays obtaining these records.

Financial advisors say that when they suspect that one of their elderly clients is being taken advantage of, they are actually hampered by strict rules that govern the execution of trades and withdrawal processing. FINRA, Wall Street's own self-regulator, has recently drafted a set of rules that would allow firms to put a temporary hold on suspicious account disbursements, but there are no provisions for making reporting suspected fraud mandatory. There are also privacy laws that advisors say could be violated. This problem is not going away anytime soon – expect to see changes in the law and challenges in the coming year.

Reference: Wall Street Journal (December 29, 2015) "Officials Seek Clampdown on Elder Fraud"

The Growing Specter of Guardian Abuse / Dallas, Texas

The traditional and expected role of the court appointed guardian is to protect and look out for the best interest of the individual who they have been assigned to care for. Sadly, there are a growing number of cases where professional guardians, those who are not related to their wards, are taking advantage of their elderly wards, decimating estates and causing unnecessary hardship.

 

Guardianship is a fairly straightforward and basic function. A person who is not able to handle her or his own affairs, for any number of reasons, is assigned a guardian by the court, who is to act on their behalf for financial, medical and care-taking purposes. The guardian is charged with putting the interest of their ward first, and the guardian is entrusted with a great deal of responsibility.

 

However, as the Wall Street Journal reports, in "Abuses Plague Guardianship Systems Across the Country," the financial abuse of elderly people by guardians is rampant throughout the United States.

 

Court appointed guardians with no family relationship to the elderly wards too often act in their own interests and deplete the wealth of the wards.

 

This problem is mostly avoidable through estate planning. Part of a good estate plan is planning for end of life issues and getting a general durable power of attorney and a health care power of attorney. With those two documents, you can appoint someone you know and trust to look after your financial and medical affairs in case you are ever not competent to do so. Doing that can often make the appointment of a guardian unnecessary.

 

Even if a guardian is necessary, a court will likely appoint the person you have already designated as trustworthy whenever possible.

 

Do not fall victim to an abusive guardian.

 

Schedule an appointment with an estate planning attorney and get the documentation that you need to make your own decisions about who should look after your affairs if you are not able to do so.

 

Reference: Wall Street Journal (October 30, 2015) "Abuses Plague Guardianship Systems Across the Country"

 

New Legislation Enacted in Certain States to Protect Elderly Investors / Dallas, Texas

After a long and high profile life of philanthropic endeavors, socialite Brook Astor died in 2007 with an estate worth $200 million.  Two years later, her son Anthony Marshall was convicted of stealing millions from her. Astor suffered from dementia, and Marshall was paying himself from her assets. While not all families enjoy this level of wealth, the fact pattern is not all that unusual.  A large and growing number of Americans suffer from dementia-type illnesses and a equally large number of them will be taken advantage of by family members.

 

 

 

States are now trying to provide greater protection for elderly investors, according to a recent Reuters article titled “Protecting dementia sufferers from scammers gains ground in U.S.” Retail brokers – in three states thus far, have been permitted to help deter scams against people with dementia.

 

 

 

The laws, which are being examined by other state legislatures, allow brokerages to halt an older client’s request to transfer money to others (at least temporarily) if a wealth manager suspects that his or her customer may have dementia and may be unknowingly be the victim of a scheme.

 

 

 

More than 5 million Americans over the age of 65 have Alzheimer's disease, which is the most common form of dementia, the article says. Citing the Alzheimer's Association, that figure accounts for roughly 1.5% of the U.S. population. Experts say this could grow to 7.1 million by 2025. 

 

 

 

The elderly are often easy targets for con artists and unscrupulous family members. In fact, U.S. seniors lose approximately $2.6 billion annually to financial exploitation. And more than half of this financial exploitation is committed by friends, family members, or caregivers.

 

 

 

Elder financial abuse is frequently hard to detect, but the article explains that requests for large, "questionable" sums of money can often be a clear sign.

 

 

 

Philip Marshall (Anthony's son and Astor's grandson) commented that these new laws might have helped protect his grandmother. The younger Marshall is a professor of historic preservation in Rhode Island who recently went on sabbatical to devote more time to elder protection issues.

 

 

 

Brooke Astor was an heir to the Astor family fortune that started back in the 18th century. She passed away in 2007 at age 105, and had a $200 million estate. Most of this was earmarked for charities. Unfortunately, her son exploited part of her estate that was to be used for her personal expenses. He paid himself roughly $1 million for managing her affairs in 2006, as was revealed in a court proceeding.

 

 

 

Some have concerns about these laws and think that perhaps the government could empower wealth managers to interfere with legitimate transactions and keep elderly people from their investments, the article reports. FINRA, an industry watchdog, is also developing guidance on the issue, with input from the SEC, as brokerages have asked for clarity on this because of rules that require them to execute a customer’s transaction.

 

 

 

Roughly half of the states have laws that require employees of financial institutions to contact state agencies if they suspect an elder customer is being financially exploited. However, many of these laws do not include retail brokerage employees or allow those institutions to delay withdrawals.

 

 

 

Brokerages are often put in a tough position when this situation arises. Contacting concerned family members to question an elderly client's instructions could run afoul of laws about protecting privacy, as well as rules that require processing transactions on time. That said, following the client's instructions can help the customer who otherwise may fall victim to a con or abusive caretaker. As it stands in most states, brokers could be liable for taking action or honoring such a transaction.

 

 

 

Contact an experienced estate planning attorney for guidance on how trusts may be used to help curb this abuse.

 

 

 

Reference:  Reuters (July 1, 2015) “Protecting dementia sufferers from scammers gains ground in U.S.”