Financial Exploitation of the Elderly

Financial Exploitation of the Elderly 

Many a will contest or trust contest is prompted because a person's estate plan is changed shortly before the person dies. Sometimes a child who believes he or she deserves more than the other children instigates this. Other times, a stranger to the family is the one who encourages the change.

In Arizona, undue influence is presumed when one occupies a confidential relationship with the testator (the person who signed the will or trust amendment) and is active in preparing or procuring the execution of a will in which he or she is a principal beneficiary. This can happen in many ways. This sometimes happens when a parent and one child live close to each other, but the other children live in other parts of the country. In that case, the parent often relies on the local child for food, transportation and company. Our firm has also seen this in the context of second marriages, where the new spouse isolates the person and pressures the person to write his or her children out of the will and give everything to the new spouse.

Our firm often confronts situations of the mistreatment of elderly or vulnerable people often called "elder abuse". For instance, we have seen a case of a realtor who sold a house in Sun City, Arizona to an older lady. The realtor convinced the lady that she was going to be a good friend and help take care of the older lady. In fact, over the coming several years, the realtor hardly stopped by. It was the elderly lady's family members who actually made sure she had food and clothing, and was taken care of. It was the family members who visited the lady in the hospice. The realtor had been given authority to act as the lady's health care and financial agent under power of attorney documents. However, during the lady's final months in hospice, the realtor refused to bring clothing that the lady needed, refused to return telephone calls, and did not visit the lady. Who inherited the lady's estate? The realtor.

Arizona's elder abuse statute is one source of law addressing when activities that impact an elderly person cross the line and become illegal. A.R.S. 46-456 provides as follows:

46-456. Duty to an incapacitated or vulnerable adult; financial exploitation; civil and criminal penalties; exceptions; definitions

A. A person who is in a position of trust and confidence to an incapacitated or vulnerable adult shall act for the benefit of that person to the same extent as a trustee pursuant to title 14, chapter 7, article 3.

B. A person who is in a position of trust and confidence and who by intimidation or deception knowingly takes control, title, use or management of an incapacitated or vulnerable adult's asset or property with the intent to permanently deprive that person of the asset or property is guilty of theft as provided in section 13-1802.

C. A person who violates subsection A or B of this section is subject to damages in a civil action brought by or on behalf of an incapacitated or vulnerable adult that equal up to three times the amount of the monetary damages.

D. A person who violates subsection A or B of this section forfeits all benefits with respect to the estate of the deceased, incapacitated or vulnerable adult, including an intestate share, an elective share, an omitted spouse's share, an omitted child's share, a homestead allowance, an exempt property allowance and a family allowance. If the incapacitated or vulnerable adult died intestate, the decedent's intestate estate passes as if the person who committed the violation disclaimed that person's intestate share.

E. The provisions of section 46-455, subsections F, G, H, I, K, L, M and P also apply to civil violations of this section.
F. Subsections A, C, D and E of this section do not apply to an agent that is any of the following:

1. A bank, financial institution or escrow agent licensed or certified pursuant to title 6.
2. A securities dealer or salesman registered pursuant to title 44, chapter 12, article 9.
3. An insurer, including a title insurer, authorized and regulated pursuant to title 20.

G. For the purposes of this section:

1. "Deception" means that a person deceives an incapacitated or vulnerable adult by knowingly doing any of the following:

(a) Creating or confirming a false impression in an incapacitated or vulnerable adult's mind.
(b) Failing to correct a false impression that the person is responsible for creating or confirming in an incapacitated or vulnerable adult's mind.
(c) Making a promise to an incapacitated or vulnerable adult that the person does not intend to perform or that the person knows will not or cannot be performed. A person's failure to perform a promise is not by itself sufficient proof that the person did not intend to perform the promise.
(d) Misrepresenting or concealing a material fact that relates to the terms of a contract or an agreement that the person enters into with the incapacitated or vulnerable adult or that relates to the existing or preexisting condition of any of the property involved in a contract or an agreement.
(e) Using any material misrepresentation, false pretense or false promise to induce, encourage or solicit an incapacitated or vulnerable adult to enter into a contract or an agreement.

2. "Intimidation" includes threatening to deprive an incapacitated or vulnerable adult of food, nutrition, shelter or necessary medication or medical treatment.

3. "Position of trust and confidence" means that a person is any of the following:

(a) One who has assumed a duty to provide care to the incapacitated or vulnerable adult.
(b) A joint tenant or a tenant in common with an incapacitated or vulnerable adult.
(c) One who is in a fiduciary relationship with an incapacitated or vulnerable adult including a de facto guardian or de facto conservator.

If you know of an incapacitated or vulnerable adult who is being financially exploited or otherwise taken advantage of, please contact our offices right away.