101-year-old woman battling for home over handwritten deed

I read the attached article from www.sbsun.com about 101-year-old Lois Risse, and all I could think was "what a mess". How sad that this woman has to undergo the stress of this legal battle and the surrounding circumstances, when it could easily have been prevented.

It appears that since Mrs. Risse's husband died 30 years ago, the people around her may well have been taking advantage of her. She has made mistakes herself as well. Click here to read the story. Shortly after her husband's death, she sold her home to a friend using a handwritten deed. There was a verbal agreement that the deed would not be recorded until Mrs. Risse passed away, and an assurance by the buyer, Mr. Neff, that Mrs. Risse could live in the home for as long as she wanted.

The story became more complicated, including a friend who moved in and kept Mrs. Risse isolated from her neighbours, persuaded Mrs. Risse to buy him a motorcycle and didn't leave until the sheriff's office forced him out. Then of course, there was the adding of Mr. Neff's name to Mrs. Risse's bank account shortly after her husband died. Eventually the court appointed a conservator for Mrs. Risse to protect her from the people in her life, and the conservator, not knowing about the sale deed, applied for a reverse mortgage for Mrs. Risse. At that point, Mr. Neff recorded the deed.

Now everyone is in court to sort out various legal issues. On my reading of the article, each step forward seems just to lead to more questions.

As I mentioned above, most of this heartache and financial loss could have been avoided. The following are some of the errors that led to this situation:

1.  Creation of a hand-written document with no legal advice. The house was Mrs. Risse's largest and most important asset, and now she has lost it. An asset of this importance is worth the cost of seeing a lawyer for an hour to make sure it's protected.
2.  Verbally agreeing to terms that vary a written agreement without documenting them in any way. Now it's one person's word against another, and one of those people is 101 years old.
3.  Not keeping a record of money supposedly paid under the agreement. Apparently neither Mrs. Risse nor Mr. Neff can produce receipts for payment, though he insists it has all been paid. Now Mrs. Risse's bank records are being examined by strangers to try to piece together what happened, and neighbours are pitted against each other with accusations of taking advantage of Mrs. Risse.
4.  Adding Mr. Neff's name to the bank account. I can't imagine what purpose that would serve for Mrs. Risse. Now it's almost impossible to figure out where money went and to verify Mrs. Risse's claims that her money was disappearing.

Unfortunately, many of the mistakes made here are made pretty often. People seem to think that insisting on legalities or formalities between friends or neighbours is insulting. This story is an example of what can happen even when you trust someone.

Protecting Canada's Seniors Act

Did you know that a new law called "Protecting Canada's Seniors Act" has now been enacted? To read a commentary about it by Audrey Miller of www.allaboutestates.ca, an expert on seniors' issues, click here.

This new law, also called Bill C-36, makes an amendment to our existing Criminal Code. It does NOT create a new crime of elder abuse. What is does do is add a bit more juice to a judge's power to punish someone who is guilty of elder abuse.

In our Criminal Code, there are a number of things that a judge can take into consideration when deciding what sentence a person should get for a crime. Some are aggravating factors that would cause the judge to give a harsher sentence. These would be things like the accused having a record of similar crimes.

The judge can also take mitigating factors into consideration. These are things that would cause a judge to give a lighter sentence, such as a thief returning what he stole.

The aggravating and mitigating circumstances that a judge can consider are set out in section 718.2 of the Criminal Code. The new law, Bill C-36, adds a new aggravating factor - that being “evidence that the offence had a significant impact on the victim, considering their age and other personal circumstances, including their health and financial situation”.

In other words, the judge may consider giving a harsher sentence to someone convicted of elder abuse.

Now we just have to figure out how to make sure that elder abusers actually end up in court. That will be no easy task, partly because so many perpetrators are family members and know exactly how to conceal their actions and persuade their elder family members not to expose them.

For those of you interested in elder abuse issues, I'm adding some new links to the "interesting links" section of this blog. Hope you find them useful.

Michigan woman arrrested for embezzling father's funds using Power of Attorney

Here's an example of exactly what not to do when you're appointed under a Power of Attorney. Renee Bullock of Michigan has been arrested and accused of embezzling $140,000 of her father's funds while acting under her father's Power of Attorney. Her father was in a nursing home, and she spent the money on vehicles, tanning and nail salons rather than pay the bills at the nursing home. Honestly, how could anyone think that situation would go undetected? Click here to read more about this story.

I notice from reading the news story that one of the things Ms. Bullock is accused of doing with her father's money is paying back payday loans. I wonder whether her father was aware that she was having money problems. It's never a good idea to appoint someone with money shortages or money management problems as your Power of Attorney. The fact that the person you appoint is one of your children will not change the fact that they will be tempted to use your money for the things they can't afford, as this story illustrates. Elder financial abuse by a family member is, unfortunately, very common.

Although this story is American, the same things happen in Canada. Our criminal law includes a specific offense for those who steal money using a Power of Attorney, as it is considered a position of trust.

Cop and wife charged in elder abuse case

If ever there was a cautionary tale about neighbours, this is it. An American police commander and his wife befriended their next door neighbour, who is elderly and of diminished mental capacity. The commander and his wife are accused of taking control of the neighbour's estate by putting everything into a trust they control, and by getting her to sign a will leaving everything to the commander. He's in jail now, waiting for his trial.

Please stay in touch with the seniors in your life. You never know who might be taking advantage of them, and you might be able to prevent it. The story doesn't say whether this particular elderly woman has family, but the financial abuse was discovered by an organization that checks in on seniors. Elder financial abuse can be perpetrated by anyone from family members to neighbours, as this story sadly shows. Click here to read the story from the San Francisco Chronicle.

Assisted suicide opens the door to grave abuses of the elderly

Recently I had a conversation with friends about an aging relative in palliative care. My friends suggested that the elderly relative, who is in enormous pain and who is not going to recover no matter what is done, would likely wish to end his life medically if he had the choice.

Looked at from that perspective, legal euthanasia or assisted suicide seems like a humane option. My response to my friends, however, was immediately to point out that legalizing euthanasia would be opening a floodgate of abuse. Perhaps it's all the years I've spent trying to protect people (mostly seniors) from the financial predators in their lives, but I can envision one hell of  a lot of greedy individuals shortening their relatives' lives for financial gain.

Every day I hear rationalizations such as "I'm taking my mother's life savings because she doesn't really need it, living in a home as she does, and I'm going to inherit the money one day anyway". You'll notice the excuse has absolutely nothing to do with what the parent wants. It's all about the kids not wanting to wait any longer for their inheritance. Is it really such a big step to get to convincing oneself that the elderly parent doesn't need to be alive anymore?

Yesterday's edition  of the Toronto Star addressed this very issue in an article entitled "Assisted Suicide Opens the Door to Grave Abuses of the Elderly". Click here to read the article, which gives a good overview of the issue. While many seniors will automatically believe that this couldn't possibly happen to them, I have to remind them of the depressing fact that seniors are robbed, defrauded and physically abused by their closest relatives every day. None of those people thought it could happen either.

The illustration shown here was attached to the Toronto Star article cited, and is credited to Paul Lachine/Newsart.

Preventing financial abuse by power of attorney

The general public is gradually becoming aware that financial abuse of seniors is rampant, and growing. We'd like to think that it's as simple as guarding our parents from door-to-door scam artists, but it's not; much of the abuse happens at the hands of family members.

Front and centre in this whole debate is the Enduring Power of Attorney. While a useful tool for seniors, it can become the instrument of financial abuse in the hands of the wrong person. A pair of recent articles in www.advisor.ca address this situation. The article suggests that a trusted, long-term financial advisor can help prevent abuse of a senior by a family member mis-using a power of attorney. I tend to agree. It's an interesting read (and I don't just say that because I'm quoted in the articles!) so click on the links below if you'd like to check out the articles.

Click here for part I

Click here for part II

Troubling trends in 2011 census: more risk of family disputes, more chance of elder abuse

Statistics on their own can be deceptively boring. Their impact and power come from putting them into context. I've attached an article here from Whaley Estate Litigation that does just that. It gathers together various stats recently released as part of the 2011 census and paints a picture of how Canadian lives and families have changed.

The article reaches the conclusion that the changes in Canadian society have resulted in much more complicated family arrangements. I agree that this is a problem, since so many people still don't get proper wills made. They leave their blended families or same-sex spouse to fend for themselves, often in lengthy, expensive estate litigation, when they could have saved them the trouble by having a good will done.

Another important conclusion reached by the article is that people are living longer, the incidence of dementia is rising, and more fragmented families mean less support for seniors. Nothing is as painful as a family fighting internally over a parent and his or her finances. And few things are as shocking as a senior, all alone in the world, being abused at a care facility.

If you'd like to read more, click here to see the article.

Should parents be forced to protect themselves against financial abuse by their kids?

A recent editorial in the Canadian Medical Association Journal has made some suggestions for changes they'd like to see implemented across the country to help combat elder abuse. Recently I read a very good article in www.50plus.com that discusses the suggested changes. Click here if you'd like to read that article.

One of the points made in the article is that locking up those who abuse seniors is not enough, and that the underlying causes of the abuse must be addressed. I agree with both parts of that statement, but my experience with elders who have been (or are currently being) financially abused makes me believe that there is still more to the puzzle of preventing elder financial abuse.

Here's the issue. Many older people either know or suspect that they are being financially abused by their kids who are acting under powers of attorney. But they wouldn't call the police or confront the child or in any other way even suggest that one of their own children could be doing such a terrible thing. They explain it away in terms of the child having lost everything in a divorce, or having lost his or her job, or simply being the baby of the family. In other words, they are so busy parenting this supposedly adult person that they put the child's welfare ahead of their own.

I have personally spoken with elderly persons whose children, grandchildren, nieces or nephews have drained the older person's accounts, leaving the older person with little or no resources to live on. Locking up abusers isn't an option because these abusers won't ever be accused; their parents, grandparents, aunt or uncle will never, ever, speak out publicly against them.

I'm a parent. I get the concept of parents helping out the kids. But parents who draw up legal documents placing the kids in charge of the money are simply not willing to include clauses in the documents to help reduce the possibility of financial abuse. They feel that including these clauses would insult the child or send a message of mistrust.

This seems overly selfless to me. I would not want to be 85 years old and living on public pensions because my child stole my life savings, and I didn't prevent it because I didn't want to insult her.

My perspective, not surprisingly, is about what the legal profession can do. I've had so many conversations where I've tried to introduce checks and balances into power of attorney documents, only to have the parent refuse to even consider the possibility that a child could misbehave.

My son/daughter would never do that, they say. Sometimes they're right. Other times they underestimate the lure of easy money when the child has lost a job, or has a gambling addiction, has a spouse applying pressure, or simply feels entitled.

I suggest to the parent that they include a clause compelling a child acting under a power of attorney to give a full financial accounting to the other kids once a year. I suggest that the document direct that anyone who acts as power of attorney and is found to have taken money should forfeit that amount of money from their inheritance. I suggest that they use a trust company as a co-power of attorney to provide expertise and a second set of eyes.

Once I say the clauses are optional, the parent opts out.

Perhaps we as lawyers need to build non-optional clauses into our power of attorney documents. Maybe we need to insist that clients protect themselves as best they can by refusing to prepare powers of attorney that don't contain safeguards. Can this be done? Should it be done? We as lawyers have to let the clients choose their own paths, but are we doing enough to make clients aware of the dangers of signing powers of attorney documents that don't contain any safeguards?

Insisting on preparing only those documents that contemplate a child committing elder financial abuse would be a major sea-change for the legal profession, but we all need to contribute what we can to the solution.

How seniors can fight identity theft

Identity theft is a concern for everyone, but unfortunately seniors are often targeted. The attached article from Investopedia gives some good tips for seniors to help protect against this type of invasion. Click here to read the article.

Elderly Senior's Extravagant Gifts Spark Litigation

It happens time and time again. An elderly person gives money or expensive gifts to someone who is helping them. In a famous case, Huguette Clark gave $37 million worth of gifts to her nurse, doctors and other caregivers.  Whenever an objection is raised to extravagant gift-giving, the recipient of the gift will say that the gift was given voluntarily. But were they? Or was the elderly person manipulated? How on earth can anybody tell?

An American court has decided to get to the bottom of the gifting by Ms. Clark, who died at age 109. The representative of her estate has demanded the return of the gifts, declaring that they were only given because Ms. Clark was manipulated by those around her. Click here to read more about this from lawyer Kyle Krull.

I'll be really interested to see what the court comes up with in terms of distinguishing between gifts that really are voluntarily given, and gifts that are only made when a senior is subtly (or not so subtly) influenced by self-interested people. As anyone with an aging parent can attest, determining whether a senior has been financially abused can truly be a tough question.

US targets financial abuse of elderly

The LA Times newspaper has a story about the US government cracking down on those who perpetrate financial abuse on seniors. Click here to read it. I'm very glad that the prevention of elder financial abuse has gained enough awareness to light a fire under legislators. Unfortunately so far nobody has come up with much in the way of preventing abuse by a senior's own family members, who are by far the most common perpetrators.

Here in Canada we already have laws in place that would deal with theft and fraud by family members (and others of course) but they are not widely used. This is partly because the crimes themselves are under-reported. Seniors are embarrassed by being fooled, and many hesitate to point the finger at one of their kids even when it's crystal clear that the child has stolen money.

There is also the fact that when children have been given power of attorney by their parents, and then take money for themselves, they usually defend themselves by saying their parent directed them to take the money as "thanks". It can be extremely difficult to determine whether that is true or not.

In any event, this move by the U.S. is a step in the right direction.

Financial advisor gets 5 years for elder financial abuse

I'm attaching a link to a news story from Florida about William Abruzzino, who was apparently an attorney (American word for lawyer), financial advisor and insurance agent. He was in charge of the finances of Marlene Scippa, an elderly woman who was suffering from Alzheimer's disease. He stole more than $200,000 of her money and a judge sentenced him to five years in prison for doing so. Click here to read a much more detailed version of the story.

The impact on Mrs. Scippa, not surprisingly, is huge. Her ability to pay for the long-term care she needs is now threatened through no fault of her own.

I notice that the story quotes at least two of Mrs. Scippa's family members, those being her brother and her niece. I don't have all the facts, but it occurs to me to wonder why neither of them was acting as Mrs. Scippa's trustee instead of the jack-of-all-trades financial advisor. It appears from the story that Abruzzino became the trustee upon Mrs. Scippa's husband's death, meaning he would have been named as the trustee in the husband's will.

No doubt Mr. and Mrs. Scippa had their reasons for appointing their financial advisor as their trustee rather than family members. The reason might well have been pressure from Abruzzino. Mr. Scippa's estate was $1,000,000 and perhaps they thought this was too much for a family member to handle. Whatever the reason, a well-intentioned choice made in good faith went completely wrong.

I encourage anyone who feels they might not want to appoint family members as exexutors or trustees to look into using a trust company. The kind of fraud perpetrated by Abruzzino doesn't happen in trust companies. As they are owned and run by banks, trust companies are highly regulated by law and banking policies, and there is never any one person with access to sums of money. And it costs less than you think.

On a final note, the rules must be different in Florida than they are in Canada as Canadian lawyers are not allowed to give investing advice to clients. Of course that assumes Abruzzino knew and followed any rules.

Despicable son gets 10 years for ripping off Mom using Power of Attorney

Having just posted a story about how kids pay for the parents' lack of planning, I'm now going to share with you a story about how a parent paid for trusting her own son. Click here to read the story.

You wouldn't think trusting your own kids would be such a devastating mistake, would you?

In my seminars I always talk about true situations in which parents have appointed kids who never should have been allowed anywhere near Mom or Dad's finances. How do these kids get appointed in legal documents anyway? The parents sometimes don't want to hear or believe anything negative about their own children so they go ahead and appoint them anyway. Sometimes it's pressure from the kids. Sometimes parents think it's the law that they must appoint their children. And then there are those - and there are lots of them - who don't really want the kids in charge but are afraid of offending them if they choose someone else under their Power of Attorney.

I certainly don't mean that the poor mother in this story deserved what she got for appointing her son. It's never the parent's fault if a child steals them blind. That responsibility lies squarely on the child, and in this case I'm glad this horrendous man was sentenced to ten years in jail for what he did to his mom.

But do what you can to protect yourself! Any parent who is thinking of making a Power of Attorney and appointing one or more of the kids should think carefully before doing so. Try to assess your child as realistically as possible (I'm a parent too; I know that's hard to do). Try to put the "he'd never take my money; he's my son" thinking aside and assess the situation more like hiring a person for a job. For example, ask yourself some questions about the child you're thinking of appointing. How has the child dealt with money during his or her life? What is his or her current financial status, and how secure is that status? Is the child always asking you for money? Does he or she have a steady income? Has he or she ever been involved in fraud or shady deals? Is he or she a spendthrift?

Asking these questions won't protect every trusting parent, but I certainly hope reading this post will prevent even one person from finding himself or herself penniless at the hands of a greedy child.

Watch out for financial exploitation of the elderly

I found this article from http://www.rightathome.net/ interesting as it talks about the various people who have used both tried-and-true and innovative ways to steal money from the elderly. It relies on statistics from a new MetLife study, which are American figures but still relevant to us here in Canada. It talks about how and why financial advisors might be in a position to help defend the elderly against fraud. Click here to read the article.

How do you know if an aging parent can't handle finances any more?

Last night there was a report on the news about an elderly woman with dementia whose daughter had arranged that two signatures (hers and her mother's) were necessary for a safety deposit box to be opened. Unfortunately the bank procedures weren't properly followed, the mother accessed the box without the daughter present, and now thousands of dollars worth of jewelry are missing. (Yes, I appeared briefly on that segment - if you blinked you probably missed me).

This story has led to quite a bit of discussion about how people know when an aging parent is experiencing dementia.

An important thing to know about dementia in an older person is that in the absence of some kind of injury (including stroke) or sudden illness, loss of mental capacity can happen slowly. And as with many types of change that take place slowly, it may take a while for isolated incidents to add up to a realization that a parent is experiencing dementia.

What are the signs that an elderly person might be having difficulty looking after their own financial affairs, and that it might be a good idea to step in? Here are some common signs:

-  the mail is piling up, unopened, at the senior's home, indicating that the senior isn't dealing with matters such as banking, insurance, investments, bills etc.
-  bills haven't been paid, sometimes resulting in the cut-off of important services such as telephone or heat
-  bills are being paid repeatedly due to the senior forgetting that he or she has already paid it
-  cheques are lying around instead of being deposited, or are misplaced
-  the senior has been, or could easily be, taken advantage of financially by scam artists, strangers or family members
-  irrational changes are being made to the senior's will
-  the senior can no longer manage small financial transactions such as paying a restaurant bill or making a purchase at a store, that he or she used to be able to do easily
-  large sums of money are withdrawn from the bank but the senior can't remember making the withdrawal or remember what the money was used for
-  the senior is transferring assets to friends or family members (including setting up joint bank accounts) for no apparent reason
-  the senior has made a new, recent friend who seems to exert a lot of influence on him or her, and to whom the senior is giving money
- the senior is experiencing a great deal of anxiety regarding money, such as being afraid to buy groceries or thinking he or she might be evicted from their home, even though there is enough money to pay the bills
-  the senior is making irrational purchases, such as cans of dog food even though he or she doesn't own a dog

Be careful about deciding that someone has lost capacity. Personality, personal wishes, and physical limitations all influence financial decisions, and the fact that you don't like what a parent is doing with money doesn't make the parent incapable. If you believe that your parent is experiencing dementia, make sure that he or she sees a doctor for that diagnosis.

Photo from http://www.dreamstime.com/

Protecting your parents: keeping the sharks at bay

The alarm bells over financial abuse of seniors have been sounded, and everyone is beginning to be aware of the problem. This article from http://www.money.cnn.com/ gives some excellent information on spotting what's going on and putting a stop to it. I like that this article also talks about seniors who receive inappropriate financial advice that is so wrong for them it might as well be illegal.

The article is American, but in everything but the details applies to us in Canada as well. Click here to read it. The attached photo by Alex Farnum is also from that article.

A growing trend: elderly parents marrying the caregiver

Several years ago I was involved in a strange file where the adult children of a wealthy man discovered after their father's death that he had recently married his housekeeper. As the law at the time stated that marriage revoked a will, the father's will leaving his estate among his children was overthrown. Each of the children hired a lawyer, as did the wife/housekeeper, and the fight was on.

The housekeeper had plainly preyed upon the man to get access to his assets. At the time, I'd never seen another case like it. Now, however, so many cases have come to light that they have their own title, that of "predatory marriages" or "predatory unions".

Could this happen to your widowed or divorced parent? What would that do to your family? What would it do your parent's financial security?

To learn more about this trend of elderly parents marrying the caregiver, click here to read an article by http://www.pollexestateplanning.com/ .

Stealing from Mom and Dad

The July 18 issue of Maclean's Magazine has an excellent article by Risha Gotlieb called "Stealing From Mom and Dad", which talks about how aging parents are being financially abused by their own kids using powers of attorney. I was one of a handful of people Ms. Gotlieb interviewed for the story. Click here to read it. The attached photo is from the Maclean's story as well.

Ex-broker fined $1-million in theft from widowed client

I'm certainly glad this fellow has been stopped. I wonder if there are other victims as well?

An interesting point raised in this article is that the regulatory body overseeing the brokers has the power to fine the ex-broker but doesn't have the power to make him return the $1.4-million he stole from his client. The ex-broker has also been charged criminally, a procedure that I'll be watching with interest. Click here to read the story from the Globe and Mail.

Materials & workshops for prevention of elder financial abuse

There are some materials available from the Canadian Centre for Elder Law that you might find useful if you are involved with financial affairs of seniors. We all know that elder financial abuse is on the rise but most of us don't really know where to start to prevent or stop it. It's fantastic to see that this organization is concentrating on educating both the seniors themselves and the community at large with these materials.

The first is Financial Literacy 101 - Protect Yourself. This is a self-contained train-the-trainer binder that allows agencies and communities to train their own volunteers to deliver educational workshops on financial literacy for older adults, following a peer education model. The binder includes the material for two workshops, as well as handouts for teaching volunteers to lead workshops. 

There are 2 workshops.  Workshop 1 is focused on powers of attorney and joint accounts, and workshop 2 discusses frauds and scams.  The trainer binder includes PowerPoint presentations for each workshop as well as participatory activities, handouts to highlight learning objectives, and evaluation forms.  The workshops were focus-tested in the Vancouver lower mainland area and have since been delivered at many locations.

The second is Financial Literacy 102 - A knowledge based approach to preventing financial abuse of older adults: a guide for professionals
This publication provides professionals who work with older adults with a general overview in relation to financial abuse of older adults as well as financial literacy and financial planning for older adults.  This publication is also intended to serve as a tool for in-house teaching of staff and volunteers.  

Click on the titles of the projects to go the CCEL website, where you will find more information. Some of the materials are downloadable from the site.