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Financial abuse of the elderly comes in many forms. While many of the reported high-profile cases involve clever con men or opportunistic paramours, the harsh reality is that most perpetrators of financial abuse are the adult children of the victims. As a result, attorneys representing older clients should exercise caution in situations where this might be a possibility. Most current definitions of financial abuse focus on the misuse of assets. Misuse ranges from outright theft to more subtle activities like rent-free use of a home against the owner’s will. Although some argue that negligent mishandling of assets should be considered abusive, most state legislatures, in defining financial abuse, have chosen to focus only on intentional misuse of assets. There are many potential underlying causes and motivations for financial abuse. Greed seems the most obvious. Another common cause is a feeling of entitlement to the assets, frequently arising from the perpetrator’s relationship to the victim or from a history of the perpetrator caring for the victim. At the outset, then, the attorney should realize that financial abuse is frequently not easy to identify. The wide range of potentially abusive transfers coupled with the sometimes complicated motivations for the transfer deepens this difficulty. The situation often implicates the personal autonomy of the asset owner: If the asset owner knowingly and voluntarily makes the transfer, then it is not abusive. This makes determining whether a transfer is abusive very similar to determining whether a testamentary transfer was the product of undue influence. Accordingly, an attorney must always be sensitive to the asset owner’s mind-set. At the point at which the transfer is made involuntarily or unknowingly, there is financial abuse. COMPETENT? Any attorney who performs an asset transfer for a client should satisfy herself that the client is competent to make the transfer. Although only a small percentage of older clients suffer from the level of dementia that would deprive them of competence, dementia is more common in older clients than in younger ones. Consequently, an attorney representing older clients must take special care in ascertaining competence. This care does not end with the attorney’s determination that the client is competent to transfer the assets. The attorney should also consider whether special care should be taken in accomplishing the transfer to minimize or prevent allegations of elder abuse. For example, a letter from a client explaining the motivations for a particular transfer can do much to counter any allegation that the transfer was involuntary. An added bonus is that the attorney will frequently feel reassured by the ability of the client to express his or her reasons for transferring the assets. ‘WHAT MOM WANTS’ An adult child frequently accompanies an older client to an attorney’s office. This should raise several concerns in the attorney’s mind. First, the attorney should be absolutely clear with the client about who the client is. In most instances, the client should be the parent or the asset owner, rather than the child or the transferee. Remember also that many lay people who speak with an attorney believe that they are clients even though the attorney may not view them as having an attorney-client relationship; therefore, it may be desirable to clarify with the child that the attorney represents the parent. Second, the attorney must be confident that any transfers are made knowingly and voluntarily by the parent. Most experts suggest that an attorney should never implement a transfer of assets without talking to the older owner outside the presence of the adult child, to be certain that the client is making the transfer without any undue influence. On the other hand, the adult child can be an invaluable aid in ascertaining the wishes of an older client. The attorney must, however, be particularly sensitive to sensing any personal interest by the child that may be coloring the child’s version of what the parent wants. Thus, the attorney must use all his professional skill and judgment to assess the credibility and motivations of both the parent and the child in order to be certain that the transfer of assets being requested is voluntary. MANDATORY REPORTING Many states have statutes requiring mandatory reporting of elder abuse, including exploitation or financial abuse. In some of those jurisdictions, attorneys are among the mandated reporters. Most of the statutes require reporting when a person has a reasonable suspicion that an older person is being abused. These statutes put attorneys in a difficult position. Can an attorney report financial abuse, or does the attorney-client privilege prevent reporting? Under most states’ professional responsibility rules, the attorney cannot report if reporting would require revealing confidential information. One state, Texas, has expressly abrogated the attorney-client privilege in this context, but other states have expressly stated that the attorney-client privilege can serve as a defense to an action for failure to report. Many states that have mandatory reporting statutes have not addressed whether the privilege can serve as a defense to a charge of failure to report. In jurisdictions where the matter is unsettled, the attorney who suspects that a client is the victim of abuse is thus placed in a difficult ethical situation. Should he report even over the objection of his client? There are no easy answers to this question, although in these jurisdictions I come down on the side of reporting suspected abuse, particularly in cases where the attorney believes that the client suffers some cognitive impairment. Mandatory reporting statutes have not been widely enforced, although most provide some penalty for failure to report. Nevertheless, with all studies indicating that abuse is on the rise, it is likely that mandatory reporting statutes will be taken more seriously in the future. A CASE TO CONSIDER Attorneys are frequently asked to prepare a durable power of attorney for clients. Although this power does not accomplish an asset transfer, it frequently enables such a transfer in the future. Drafting a durable power thus implicates many of the concerns just raised. Consider 80-year-old Bill who comes to your office with his daughter, 50-year-old Marilyn. Bill insists that he wants Marilyn with him at all times because his hearing is “not so good.” Bill prompts Marilyn to “tell the lawyer what we discussed.” Marilyn tells you that her father wants an immediately effective durable power of attorney naming Marilyn as the agent. Is there any cause for concern? To answer this question, the attorney must assess whether Bill in fact understands what he is doing and the potential consequences of his actions. Given the facts stated here, there seems little cause for concern. But what if you know that Bill has two other children, both estranged from him? Is this cause for concern? What if you learn that Marilyn has a drinking problem and a history of financial difficulties? Assume that you draft the power for Bill, and six months later Marilyn appears at your office asking for advice. She tells you that her father has “lost it” and she has assumed complete control of his assets. In light of your conclusion that Bill was fine six months earlier, does this give you cause for concern? If Marilyn asks for your legal advice, can you represent her? Assume further that after Marilyn takes over her father’s financial affairs, she makes large transfers of his assets to herself and her children. You find out and question her about it. When confronted, she tells you that “Dad would have wanted it that way — he always took care of us financially.” Assuming that the durable power of attorney that you drafted for Bill allows the agent to make gifts to herself (which is common when the agent is a family member), has Marilyn acted inappropriately? Unfortunately, there are no easy answers to these questions. The situation requires the attorney to look at the parties’ actions and attempt to discern their motivations and competency. If the attorney decides that the daughter is overpowering the free will of the father and hence misusing his assets, the attorney should not allow any further transfers. In addition, the attorney may have a duty to protect the father, his client, by reporting the abuse to a protective services agency or to law enforcement. With elder abuse, including financial abuse, on the rise, we can expect to see further development of the body of law dealing with financial abuse. Attorneys are uniquely situated to detect financial abuse. Our access to the most personal financial records of our clients, along with our clients’ view of us as trusted advisers, makes us perhaps the most likely professionals to detect financial abuse. In this unique position, we must take care to avoid enabling financial abuse of our clients. Although the situations of potential financial abuse may seem to raise more questions than answers, we must make our best professional attempt to reach the right conclusions in each situation. Carolyn L. Dessin is a professor at the University of Akron School of Law. She has written extensively on the financial abuse of the elderly and can be reached at [email protected].

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