Comparing a Power of Attorney to Dynamite

In Wilson Rawl's Where the Red Fern Grows, Billy says of his small hunting dog Little Ann, "Dynamite comes in little packages." In my opinion, financial powers of attorney are as dangerous as dynamite in terms of their potential consequences for ill. Inadequate financial powers of attorney are at the heart of numerous expensive and painful probate cases. I think financial powers of attorney are as important as revocable trusts and deserve as much attention.
In an article written by Linda S. Whitton, titled "Durable Powers as an Alternative to Guardianship: Lessons We Have Learned" (37 Stetson L.Rev. 2007), Ms. Whitton states there are three things to understand about durable powers of attorney as used as an alternative to guardianship.

1. A Power of Attorney is Only as Effective as the Willingness of Third Parties to Accept It.



2. A Power of Attorney is Only as Protective as the Agent is Trustworthy.



3. A Power of Attorney will Not Prevent Family Power Struggles over the Principal's Assets.

In this blog, I will address the first point made by Ms. Whitton.

The first point is spot on. If a third party refuses to accept a financial power of attorney, then the power of attorney is not very effective.

A word about this first lesson in terms of Utah law. As of the date of this entry, there is no Utah statute or Utah judicial decision that requires a third parto to accept a financial power of attorney or that offers any statutory redress against a third party for unreasonably refusing to accept a financial power of attorney. Utah statutory law governing financial powers of attorney is quite basic, essentially recognizing and authorizing the use of financial powers of attorney, but not much more. (U.C.A. 75-5-501 to 504.)

Therefore, in Utah, if a client is incapacitated and if third parties will not accept a durable financial power of attorney signed by the client, then the named agent has only two options: the agent can sue the third party to force acceptance of the power of attorney or seek a conservatorship.

So the question is, what can be done in Utah to encourage third parties to accept financial powers of attorney?

I have asked the legal departments of Zions Bank, Wells Fargo, U.S. Bank, Key Bank, and Mountain America Credit Union what they are looking for in financial powers of attorney that encourage them to acknowledge the agent's authority to access the principal's accounts. The responses are summed up as follows:

1. First, are the formalities honored? Is the document signed and notarized? (A few of the legal departments said they would be impressed if the principal's signature was witnessed, even though there is no statute requiring witness attestation.)



2. What is the liability of the third party in accepting or rejecting the power of attorney? The less liable these third parties are, the more likely they said they would be in accepting the agent's authority under the power of attorney.



3. How recent and well-organized is the document? The more "fresh" and readable the power of attorney is, the more likely these third parties will accept it.

With these ideas in mind, I suggest that financial powers of attorney include language at the very beginning of the document that releases third parties from liability for accepting the agent's representatives regarding the validity of the power of attorney (and places liability for abusing the principal or the power of attorney squarely on the agent). I suggest this language include clear language as to what third parties are and are not obligated to do in accepting a financial power of attorney.

Check out our website to learn more about financial powers of attorney.

Craig E. Hughes

How Can I Regain My Identity Once It Has Been Stolen?

The most important thing you can do if you find unexplained charges on credit cards, bills on your credit report, an unexplained notice you are being sued, or even an arrest warrant, is to take action quickly. Below are the starting steps of reclaiming your name:

• File a report with the police.


• Place a fraud alert on your credit reports.


• Close any accounts that you know or even think might have been tampered with or opened by someone else.


• File a complaint with the Federal Trade Commission.


• Put a Freeze on Your Credit.

How Can I Prevent Identity Theft?

There are many things you can do to reduce the risk of identity theft. The following is a quick guide to simple, but important ways to protect yourself and those you care about.

• Guard your personal information.


• Take your social security number off your driver's license and checks.


• Never carry documents containing personal information with you.


• Secure your mail and trash.


• Ask for a credit report at least twice a year.


• Consider removing your name from phone directories.


• Update computer protection regularly.

Credit reports can be obtained from one of the three major credit bureaus.
Equifax
Experian
TransUnion

Talking to Your Parents About Their Finances

I read an article in the Wall Street Journal's weekend edition. The article discusses ways for family members to approach talking to aging parents about their financial needs or concerns. The full article can be found here.

Search our website here for our family approach to estate planning.

Financial Abuse by Caretakers

The New York Times reports that estate battles are breaking out all over, on estates large and small, and oh boy are they nasty.

One story tells of a 99 year-old man who married his caretaker. Even though she wasn't in his will, his 48-year-old wife is suing for her statutorily defined share of his estate. His sons say he suffered from severe dementia.

Another caretaker is being accused of tricking a woman she took care of for eight years. Three years after the woman was diagnosed with dementia the caretaker drained the bank accounts and transferred the home into her name.

A good probate and estate planning attorney can ensure these types of situations do not occur. The way to do so is with comprehensive powers of attorney, thorough caregiver agreements, very tight amendment and revocation procedures in documents, complete funding of trusts, and clear and appropriate communication with beneficiaries and fiduciaries while you are competent. For Utahns, contact Hughes Estate Group, Attorneys, (800-422-0627) if anything mentioned in this article strikes close to home.

It's Epidemic

Elder abuse is a growing threat in Salt Lake City. Two very recent cases of horrible abuse and neglect have given law enforcement officers pause to rethink how they respond. Too often it is seen as a family matter, especially financial abuse. It isn't it is a crime. A local KSL news report quotes the county sheriff saying that Salt Lake city used to get six elder abuse cases a year, now it's a twelve a month and it's a crime that's underreported.
Law enforcement's Family Crimes Unit now holds monthly meetings to train more specifically for handling elder abuse.

When the ruthless prey on elderly victims, Financial Guardianship may be the only answer

Wall Street Journal has good article by Karen Blumenthal on just how ruthless and hard to stop are the scams against the elderly.

She writes of an aging patriarch in his 70s, an Ivy League-educated professional who sent thousands and thousands of dollars to strangers. Government agencies at all levels are fragmented by their jurisdictions and priorities and scammers are particularly bold and brazen, because they know they won't be caught.

In these tough financial times people are susceptible when they think they have a change to make up for losses in retirement savings, housing values, etc. It's particularly effective on the elderly who have lost some of their mental capacity, or are stressed by illness or loss of a spouse.

Once a person responds to a scammer, they become part of a sucker list that makes them a broad target as the lists are sold a over and over again throughout the world.

These predators spend a lot of time getting to know their victims and building up trust. They learn their target's interests, routines, pets, children, about their neighbors and their churches, and finally about their bank accounts. Through all of it, the victim often begin to consider the caller a friend.

In the end a financial guardianship maybe the only way to stop it.

Attorney Abuse

A California paralegal plead guilty to felony grand theft from an elderly person and was sentenced to two years in prison for inducing an 84-year-old lawyer to sell his law practice to him for $20.

The lawyer was suffering from early-stage dementia. . Paralegal Mario David Abernathy befriended the lawyer last year and gave him $20 as a down payment for the law practice valued at $750,000. Escrow closed on the practice, transferring it to Abernathy without any further payments.

The lawyer also signed a power of attorney giving Abernathy control of his assets and changed his will to benefit Abernathy’s mother and daughter. ocregister

H/T ABAJournal

Wes Bedloe working to stop Elder Abuse in Nursing Homes

The Oklahoman founder of a national watchdog group for nursing homes on Thursday called state and national governments to action to change how substantiated abuse cases are cited and how they influence the rating of nursing homes on the federal Medicare.gov Web site.

Wes Bledsoe, founder of A Perfect Cause, says that because families of nursing home residents rely heavily on this rating system, the information there needs to be accurate and complete, he said. Otherwise, the whole system should be taken away.

According to state inspection reports, Oklahoma nursing homes were ranked among the best in the nation. The truth is, the state led the nation not in quality of care, but in corruption.

FBI wiretaps caught the state's top nursing home official demanding kickbacks in return for doctoring nursing home reports for their owners.

The bribery convictions were vindication for relatives and advocates for the elderly who had been warning federal officials about the corruption in Oklahoma's nursing homes for years. According to a Congressional report, of the 393 nursing homes in Oklahoma, 68 facilities — more than one out of every six — had a violation that caused actual harm to nursing home residents or placed them at risk of death or serious injury.

Wes Bledsoe's grandmother, Eunice Allen, died a week after the corruption scandal broke. Inspectors had repeatedly cited the nursing home, Southern Oaks Manor, for harming patients, but little was ever done. His grandmother died of gangrene, and the family later discovered the the "doctor" who signed of on her care was not a physician.

Running into Trouble

Salt Lake Tribune is reporting that Chris Devine of Devine Racing, which owns and operates the Salt Lake Marathon has been accused of financing his marathon empire with money he stole from an isolated multimillionaire C. Robert Allen to the tune of $70 million dollars. Allen's family has charged in a lawsuit Devine and business partner Bruce Buzil of racketeering, fraud, and embezzlement. They describe the Allen as a mentally and physically frail man who was taken advantage of.

C. Robert Allen is the son of Charles Allen Jr. who left school to work on Wall Street at age fifteen. By 1933, he was highly successful and by the time of his death in 1996 left a fortune that was reported by Forbes as valued at 2 billion dollars.

After their initial meeting, the complaint charges that Devine took advantage of Allen's isolation and loneliness, visiting often, calling constantly and performing personal favors for him.

They claim Devine and Buzil sent expensive gifts to Allen including a $250,000 Bentley automobile, but used Allen's funds to pay for it all. Then they persuaded Allen to make several loans to their company, Superior Broadcasting Company, but Allen's family claims that it was just a shell company and it never owned a single radio station.

Beginning in 2005, family members tried unsuccessfully to force Devine to account for nearly $70 million in Allen loans.

Devine established the Salt Lake City Marathon, and purchased the Los Angeles and Las Vegas marathons. Runners, vendors and business associates from Los Angeles, Las Vegas, Salt Lake City, Chicago and New York for years have accused Devine of failing to pay bills on time and reneging on deals and has been sued at least four dozen times.

The bad business practices are especially hard on the runners, who make little, and have had to wait up to two years for their pay. See the rest of the story here.

Stealing Your Way to Heaven

From the Roanoke Times A Roanoke pastor stole more that $60,000 from relatives and used the money, in part for computers and a sound system for his church. The relatives were two elderly sisters.

The younger sisters was in her 80s, became ill and was placed on life support. She died the next day and her 91-year-old sister was grief-stricken. The pastor who was already executor over the younger sisters estate, convinced the distraught older sister to give him power of attorney over her affairs as well.

He then took the surviving sister, who was 91 at the time, to a lawyer's office and had her give him power of attorney over her finances. He then started taking money out of her account until another relative found out and put an end to it. He will be convicted of one count of embezzlement. Two other counts of embezzlement and obtaining money by false pretenses will be dismissed if he can pay back the $63,340 that he stole.

Questions for the Jury

Do you have any particular expertise on the top of wills and/or powers of attorney?

Do you have a will?

If yes, did a lawyer help you to write your will?

If Yes, and if you have a spouse or partner, what percentage of your assets have you left to him or her in your will?

If you have children, what percentage of your assets have you left to them in your will?

Do you have any views with respect to the gift tax or the tax laws in general that would affect your ability to be fair and impartial in this case?

These are questions for prospective jurors who will hear the case against Anthony Marshall, charged with looting his mother Brooke Astor's estate. Also charged is her attorney who did some estate planning for her.

I doubt that many of the prospective jurors have views about the gift tax or are even aware of it. Anyway it's going to be an interesting trial.

Really Awful

Olga Ostern suffered a stroke and doesn't remember the lawyer who came to her room to oversee her signing a power of attorney. Last week her daughter and son-in-law, Kimberly and Christopher Gerard, were charged with 18 counts of felony theft, four counts of misdemeanor theft, three counts of criminal attempt, and one count each of criminal conspiracy and misapplication of entrusted property.

Bank records showed that Ostern's daughter paid her own bills and her own mortgage out of her mother's account. From June 18, 2007, and Sept. 5, 2007 she wrote checks on her mother's account that dwindled from a balance of $1.3 million to just $1427.

They also stole the Ostern's home. The deed was transferred for the price of $1.00. They moved into the home took over the master bedroom and put their father, who was suffering from Alzheimer's disease, into the guest room. At one point Mrs. Ostern was told the house was no longer hers. Olga was bullied and eventually left when Christopher Gerard threw a large bag of coffee at her. She and her husband are now living with a son.

In less than four months they took $1,298,573 in cash. Add the value of the house which was worth 429,000, this woman and her husband were stealing at a rate of 21,594.66 a day, 899.78 every hour. From her own mother.

Beaver County Times & Allegheny Times March 26, 2009.

New Report - Elder Abuse a Growing Threat

PA Elder, Estate & Fiduciary Blog gives a good rundown of a newly issued study by Met Life Mature Market Institute here. The study is called Broken Trust: Elders, Family, and Finances.

"Elder financial abuse is a problem in every community and among all social strata. It is underrecognized, underreported, and underprosecuted.

From what source data were these key points and overview derived? News articles." (emphasis mine)

Every single day you can google "elder abuse" and come up with a news stories that should scare anyone with an older relative or anyone that is expecting to grow old. In other words all of us.

Here's the results of today's quick search . . .

Albertlea (MN) tribune.com
In December, Broitzman and Larson were charged as adults with 10 or more charges each, ranging from fifth-degree assault, criminal abuse of a vulnerable adult and mandated failure to report suspected abuse of residents at Good Samaritan Society of Albert Lea. Four others were charged as juveniles for mandatory failure to report suspected abuse.

The charges came after an investigation into allegations of abuse by the Albert Lea Police Department, the Freeborn County Sheriff’s Office and the Minnesota Department of Health. The details of the allegations surfaced after the release of the Department of Health’s report in August that concluded four teenagers were involved in verbal, sexual and emotional abuse of 15 residents at the nursing home in Albert Lea. The residents suffered from mental degradation conditions such as Alzheimer’s disease and dementia.

Danville Weekly
Aging and Adult Services Department Director John Cottrell takes issue with a report made last week by a Contra Costa County Civil Grand Jury that claimed that, as of January, the county had stopped providing services to protect elderly residents from financial abuse.

Cottrell said that while his department has been slashed to the bone in all of the recent rounds of budget cuts, it is still providing basic services to the elderly in the county.

In the past two years, nearly one-third of the 3,500 reported cases of elder abuse in Contra Costa County (population 1,024,319) were financial in nature. And of those, Cottrell said 50-60 percent were perpetrated by family members.

wtok Newton County, MS
Sheriff Jackie Knight said 30-year-old Ann Burnham, and her husband, Timothy Burnham, 32, were charged after allegedly whipping an elderly woman with a belt.
Knight said the victim was in her late eighties.

Osawatomie Graphic (Florida)
The Osawatomie Police Department investigated a possible case of elder abuse or mistreatment of a dependant adult Monday.

An 89-year-old female was transported by Miami County EMS to an area hospital from her residence at 607 First Street for treatment and evaluation, said Osawatomie Fire Chief DuWayne Tewes.

LA Times
Live-in caretaker charged with financial elder abuse, fraud and forgery
Police say Cindi Dee Powell bilked an 84-year-old Huntington Beach woman out of about $200,000 and put the woman's house at risk of foreclosure.

claimsjournal.com
Insurance Agent Carlos Chavez of Long Beach, Calif., has been charged with one felony count of elder abuse, three felony counts of computer fraud and four felony counts of grand theft, the California Department of Insurance announced. If convicted on all counts, Chavez faces a maximum of six years in prison. Bail is set at $130,000.

Chicago Tribune
On Tuesday, Heidi Leon of Bensenville, a 23-year-old nursing assistant, was charged with criminal neglect of a long-term care facility resident, criminal neglect of an elderly person and obstruction of justice in connection with the death of Sarah Wentworth, 89, whose body was found in an Itasca nursing home's courtyard after she was outside for perhaps as long as five hours.
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You can download the highly readable 40-page report at the PA blog linked to above.

Scam Alert

Whittier police are warning their community of inheritance scams. The victims are approached in parking lots. The scammer tells them he has to go back to Africa, but can't take his inheritance with him because of crime and fear of hostage taking.

The scammer flashes some money and asks if the victim can recommend a church to which the inheritance can be donated. Often a finder's fee is offered. The scammer then convinces the victim to withdraw money as proof that the scammer can trust the victim. They are told to drive around the block and when they return, the scammer and the money have disappeared.

The scam has been perpetrated in Whitter, La Habra, and Laguna Beach. Victims have been in their 80s.

Scam Alert!

Phone Scams target the bereaved families.

AARP

Callers claim that a deceased family member left an unpaid debt and threaten collection action. Often there is pressure to obtain personal information. Senior citizens are the target group for these scammers and the calls come shortly after the death has occured.

24 Congressmen against the Elderly - a fight to the death

These are the headlines for today's "Elder Abuse" Google News Search (last 24 hours).

Three more men charged in two elder abuse cases - The Flint Journal
Lake County elder abuse: Man, 71, beaten and bitten - Santa Rosa Press Democrat
3 former health care workers arrested for elder abuse - Bakersfield Now
Two arrested for elder abuse = Lake County Reccord-Bee (CA)
Three arrested in nursing home deaths in Lake Isabella - LA Times
Several Cases of Nursing Home Abuse in California - InjuryBoard.com, FL
Woman steals $85K from elderly woman = KTAR.com )Arizona)
Her family's legacy is gone and she will never know it = Minneapolis Star Trib
________________________________

Stimulus Package Funding - Abuse of the elderly

Voting 397 for and 25 against, the House on Feb. 11 sent the Senate a bill authorizing $9 million over three years for state programs to prevent abuse of the elderly and provide emergency services to abuse victims. In part, the bill would fund special police, court and prosecutorial units for protecting the elderly and direct the Justice Department to establish a national strategy for combating elder abuse.

Ted Poe, R-Texas, said: "Elder abuse is a serious issue facing the country, and whether (it) is happening in homes or senior care facilities, we must do what we can as a nation to protect these seniors. I believe that because seniors are often unable to defend themselves from mistreatment and abuse, that we must work together to prevent violence from occurring in the first place."

The Hall of Shame

Nay MO-2 Akin, W. [R]
Nay SC-3 Barrett, James [R]
Nay TX-8 Brady, Kevin [R]
Nay GA-10 Broun, Paul [R]
Nay TX-31 Carter, John [R]
Nay TX-11 Conaway, K. [R]
Nay GA-9 Deal, Nathan [R]
Nay AZ-6 Flake, Jeff [R]
Nay NC-5 Foxx, Virginia [R]
Nay AZ-2 Franks, Trent [R]
Nay NJ-5 Garrett, Scott [R]
Nay TX-5 Hensarling, Jeb [R]
Nay SC-4 Inglis, Bob [R]
Nay IA-5 King, Steve [R]
Nay GA-1 Kingston, Jack [R]
Nay GA-7 Linder, John [R]
Nay WY-0 Lummis, Cynthia [R]
Nay CA-4 McClintock, Tom [R]
Nay TX-19 Neugebauer, Randy [R]
Nay TX-14 Paul, Ronald [R]
Nay CA-46 Rohrabacher, Dana [R]
Nay WI-5 Sensenbrenner, F. [R]
Nay AZ-3 Shadegg, John [R]
Nay TX-13 Thornberry, William [R]
Nay GA-3 Westmoreland, Lynn [R]

Betrayed

Daughter charged in $1M theft from parents
By Dennis B. Roddy, Pittsburgh Post-Gazette

A Pennsylvania woman is accused of having tricked her elderly parents(both in their 80s) into signing over control of their home and savings, then moved into their house and wrote herself checks for everything from credit card bills to a country club membership.
She is accused of stealing or attempting to steal $1 million in cash and property.7.

She coerced her mother into signing a power of attorney while the elderly woman was hospitalized with a broken hip on July 3, 2007. Her father who has since been diagnosed with Alzheimer's disease, was already suffering dementia at the time he signed a power of attorney. The legal documents gave wide-ranging powers including the ability to add herself to the couple's bank accounts. The elderly woman told detectives that she thought she was signing documents that would temporarily allow her daughter to pay bills while she was hospitalized.

Please! Please! everyone! The time to make these decisions is long before you're sick. And review them at least yearly. No one believes that this can happen to them.

Two recent cases point to the success of local Elder Abuse and Exploitation Prevention Teams. In Michigan a man was convicted of stealing more than $50,000 from his mother. The theft was discovered during a routine guardianship review conducted by a caseworker. Other investigations have resulted in charges against a man for taking $37,000 from his blind grandmother. The teams are funded by a small tax called a senior millage. 1/4 of a mill from property tax is designated for senior services.



In Utah it is Adult Protective Services that is responsible for investigating abuse or exploitation and to provide protective services and help prevent abuse. The Utah Criminal Code provides for penalties ranging from class A misdemeanor to 2nd degree felony. Anyone who has reason to believe that any incapacitated or disabled adult has been abused is required to report it. Reports should go to statewide intake at 1-800-371-7897 or in Salt Lake County 801-264-7669.

At the national level a bill that was approved by the House but not yet by the Senate. (Elder Abuse Victims Act of 2008)H.R. 5352 would protect seniors in the United States from elder abuse by establishing specialized elder abuse prosecution and research programs and activities to aid victims of elder abuse, to provide training to prosecutors and other law enforcement related to elder abuse prevention and protection.