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Friday, December 9, 2016

Financial elder abuse is on the rise

To those of us who work with seniors and their legal documents every day, this headline is hardly a surprise. I agree with the author of the article, though, that the general public is not aware of just how prevalent elder financial abuse really is.

Click here to read an article from www.BoomerandEcho.com that talks about the rise of this type of abuse in Canada.

The article mentions abuse by children of their parents' Enduring Powers of Attorney, and I agree that more parents need to be cautious about appointing their children with blind faith that is misplaced. However, there is more that a parent can do to protect himself or herself when having an Enduring Power of Attorney prepared. Here are a couple of ideas for things that can be included right in your document:

1. A clause saying that if one of the kids acts under your POA, he or she has to give a regular, written accounting to someone of  your choice - your other kids, your siblings, your accountant, etc.

2. A clause saying that the POA cannot be used in any bank or other place unless and until it has attached a certificate from a lawyer saying that the person appointed under the POA had consulted the lawyer and was fully advised of what he/she can and cannot legally do under the POA.

3. A clause saying that if one of  your kids acts as your POA, on your death if any money is missing or unexplained, that is coming out of that child's share of your estate.

4. Specific instructions that the kids are NOT to give any money to themselves under any circumstances except as specifically allowed by your POA document.

Finally, seriously consider hiring a trust company as your executor and to act under your POA. They charge a fee but it's a reasonable fee, especially when compared to the risk of everything you own being stolen or squandered.

10 comments:

  1. Thank you for posting this, in particular the preventative advice. Such advice protects not only the senior, but also the person holding the PoA. Seniors advocacy groups could and should do more to provide such protective advice.
    I have a PoA from my widowed mother, assist her with both her daily and her longer-term financial needs, and have no intention of misusing that trust. But I have long been concerned that despite my ethical and professional stance, there may be times when others may accuse me unjustly of acting inappropriately. In the quoted story, we are made aware only of allegations of abuse, we are not made aware that the allegations may or may not be true.
    I am a financial professional, CPA, CGA and CFP, and have the necessary skills -- and professional ethical standards -- to provide the necessary financial support. I am grateful for any and all support available for the protection of seniors -- but also for protection available to me to protect me from what might be spurious allegations.

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  2. I'd rather have my kids steal it than a lawyer or Trust Company.

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    Replies
    1. That's a pretty cynical attitude. If you're interested in facts, you should know that there are no reported cases of trust companies stealing estate funds. They are highly regulated and audited. And if a trust company employee does one day go nuts and steal estate funds, at least the trust company has deep enough pockets to pay it back.

      Attitudes like yours are one of the main reasons that ethical lawyers like me almost never agree to be anyone's executor. It's not worth the fight. Why people think that a well-paid lawyer with a great future would risk everything to take a couple thousand dollars from someone's grandmother is beyond me.

      Lynne

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    2. Lynne,

      Based on your comments above, I would appreciate your feedback.

      I am acting as Trustee for my mother's estate. My mother was to be beneficiary to her sister's estate as per my aunt's holograph will. My aunt died 1.5 years before my mother.

      I have a dispute with the trust co appointed as administrator for my aunt's estate and I refuse to sign their release as among various other inappropriate actions, the trust officer permitted non-beneficiary (other relatives) unsupervised access to the estate home whereby numerous items were removed including two silver cutlery sets. These have an est value (as established through my own research) of approx $5K & $350, mostly due to silver value.

      The trust co initially refused to reimburse the estate but has since agree'd to pay $450 & $40 based on expected auction sale values as estimated by an auctioneer. Although these valuable items were listed in the home inventory with no values initially stated, no formal certified appraisals were obtained.

      I have been very forthright in detailing all issues as well as the expected remedies needed to conclude the administration. I have also escalated matters as high as the VP of the Wills & Estates division with no satisfaction obtained.

      The other beneficiary to my mother's estate has retained a lawyer to represent his interests and I expect I will be held liable for any shortfall to his portion if I were to sign a release for my aunt's estate without first ensuring my mother's estate receives the full value owning from my aunt's.

      Short of pushing matters before a Judge, as you mention regulations and audits, how may I have this matter investigated and potentially resolved?

      Both estates are located in Ontario but unfortunately, the court jurisdiction for my aunt's estate is more than 500 Kms away.

      Thank you for your reply and interest.

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    3. Mark, that sound very frustrating. I disagree that you would be liable for any shortcoming to his portion. No liability attaches to you for releasing the executor. It's still all on the executor to account to the beneficiaries.

      Going up through the channels is how the bank likes you to deal with complaints. Sometimes it seems as if there is no point to it except to give yet another manager something to do. Part of the problem with rectifying an estate issue is that 99% of bankers at all levels know nothing about estates. They're bankers, and estates are not their bailiwick. Hopefully working your way up through the trust company ladder will yield results as at least those people know their estate law.

      If you don't get satisfaction or it's simply being dragged out, consider contacting Canada's ombudsman for banking. The website is www.obsi.ca.

      Lynne

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    4. Lyne,

      Thank you for your reply.

      To clarify, the other beneficiary to my mother's estate, is not a direct beneficiary to my aunt's estate. My mother's estate is the beneficiary so as its executor, I must review the administration of the other estate and then sign a release only once satisfied that administration has been completed appropriately (as per your advice learned in this blog).

      Once I have finalized my estate administration, I will then need to obtain a release from my estate's other beneficiary which I anticipate will be a problem if my mother's estate value is reduced due to the 'theft' from my aunt's estate. I have kept him informed of all estate matters.

      I had previously received legal advice confirming my potential liability but that lawyer did not suggest even when asked, other methods to pursue the matter other than through court action. Unfortunately, court action for my aunt's estate will require me to retain a lawyer more local to that court jurisdiction - >500 Kms away. A successful court ruling can never be assured.

      If I do proceed with court action, the TC has threatened to then charge the estate a further $10K (+legal fees) over and above the executor fees already agreed and paid even as this legal action is a result of the TC's inappropriate & unlawful conduct and ongoing lack of cooperation.

      I recall contacting the ombudsman's office previously and being advised that trust co involvement in an estate, is not considered a 'banking' matter. No help there.

      You did state trust companies are highly regulated and audited. When it comes to estate matters, by who?

      I have been advised, estates maybe governed by the Ont. Min of Atty Gens office. What are your thoughts on my submitting to that department, a formal complaint or request for an investigation?

      While there maybe no documented incidents of a trust company stealing estate funds, in this matter, the TC created the conditions and permitted theft by others and then refuse to take responsibility to appropriately correct the situation.

      This experience and through feedback received, leads me to believe inappropriate and improper actions maybe more common by some TCs than might be reported. Unfortunately, a beneficiary may not know how to pursue action against a TC if inconsistencies are recognized and, too many beneficiaries are unaware of their responsibilities and believe whatever a TC may tell them. After all, TCs are supposedly experts in these matters and as per the name, are to be 'trusted'.

      Mark

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  3. Question about codicils. If one has a will and wishes to change the executor and nothing else, is a codicil acceptable for that purpose? This is for Ontario.

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  4. Once again Lynne is right. The most ripoffs come from family first, then friends, people you know & trust. I worked 23 years in real-estate sales specializing in estates in Toronto, every problem, was always from greedy relatives, ex-spouses, ex-girl/boy friends first. Lawyers & I had a hell of a time dealing with it. Ontario laws however are grossly inadequate, hence; my pending lawsuit to get laws changed to protect victims rather than make it very easy for criminal behaviour, stealing of spousal rights, matrimonial home, property rights etc. God bless Lynne & all like her who take the time to care. I spent 16 searching for one lawyer to help. Lynne was the only one until I found Trent Falldien here at home In Sudbury, Ontario who also is most grateful to Lynne for without her - my lawsuit to get laws changed did not stand a chance!!

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    Replies
    1. Thanks for the support, Trudi. I hope you'll keep me informed of the outcome of your case.

      Lynne

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