Undue Influence is defined as “influence by which a person is induced to act otherwise than by their own free will or without adequate attention to the consequences.” The concept of undue Influence is no stranger to Estate Planning attorneys and their staff. Undue influence is rapidly affecting our aging and disabled population in not only Washington, but throughout the United States. This results in millions of dollars in losses to the estates of those affected. Undue influence, and elder abuse, have become such a problem in the United States that the FBI has its own division to combat the rising cases of elder abuse and elder fraud, known as the Elder Protection Center. Elder financial abuse is so widespread and so prevalent that even a former CIA and FBI director became a victim. 95-year-old former director of the CIA and FBI, William Webster was the target of a Jamaican scammer in 2014 who offered him a sweepstakes prize of $72 million and a new Mercedes Benz. All Webster had to do to receive the money was pay $50,000. However, when Webster refused to participate, the scammer then started making threats that scared Webster and his wife enough to ask the FBI for assistance. The FBI eventually lured the scammer to the United States and arrested him.
The courts absolutely do not mess around when it comes to elder abuse or fraudulent estate planning. If a person can prove undue influence, or elder abuse as a reason for a transfer of assets, an amendment of an estate planning document, or the extension of gifts, a judge may declare a will or trust invalid and withdraw the gifts or conveyance. For this reason, it is essential that you recognize the marks of undue influence so you can protect your loved ones and your family before the influence results in substantial loss.
WHY ARE SENIORS VULNERABLE TO THIS TYPE OF ABUSE?
According to Forbes, the growing amount of elder financial abuse (and undue influence) is now so widespread, it has been dubbed the crime of the 21st century. While financial abuse can victimize anyone of any age, seniors are particularly vulnerable because:
- They have more wealth: Older baby boomers have a median net worth of $241,000, making them targets for those looking to take advantage of others.
- They have increasing difficulty with financial decisions: As we age, our financial literacy declines, causing us to lose the capacity to make sound decisions. However, while financial capacity declines, the level of confidence one possesses does not. This makes many seniors unaware of their high level of financial vulnerability.
- Advances in technology: While technology has brought many wonderful things to society in recent years, it has also increased the ways people can take advantage of others. Seniors are often unaware of how to protect themselves online and how to avoid being a target.
SIGNS OF FINANCIAL ABUSE
According to the Consumer Financial Protection Bureau, some telltale signs that indicate the possibility of elder financial abuse include:
- The senior’s possessions begin to disappear without explanation or with an explanation that doesn’t make sense.
- Seniors are told that they need to sign a document or make a decision now, or they will lose out on a possession or needed service.
- A person claims that he or she has the authority to manage a senior’s care or finances, but doesn’t have the proper documentation to prove it.
- Unpaid utility bills.
- Reduced communication with family members.
- The elderly individual’s checkbook or check register shows frequent checks made out to cash, or check numbers are out of sequence.
- New “best friends” who accompany the senior to the bank and/or are added as signatories on the senior’s bank account.
- Closing CDs or accounts with no regard to penalties.
- Frequent and costly gifts are provided to staff members and volunteers at the nursing home.
- Sudden changes to the senior’s will or other financial documents.
- An unanticipated transfer of assets to a family member or friend.
Aging Americans and their families can prevent financial abuse by:
- Carefully choosing a trusted family member to hold power of attorney over the elderly individual.
- Be wary of giving power of attorney to an adult child who is struggling with his or her own personal finances or has had trouble with addiction.
- Planning ahead, before your ability to make sound financial decisions declines.
- Seek advice from a reputable estate planning attorney regarding the protection of your assets.
- Never, ever giving financial information, such as your Social Security number or your bank account number, to anyone over the phone.
- Do not make financial decisions immediately – Always ask for details in writing, get a second opinion from someone you trust, and turn to an attorney before signing documents that you don’t understand.
- It’s okay to say no—even to family members and friends. Your money means your choice.
- If you have reason to suspect that a loved one is being financially abused, we recommend that you have a candid conversation with your loved one to try and understand what is happening. You may also want to solicit help from your loved one’s bank to monitor the account for suspicious activity.
Victims of elder financial abuse may also pursue recovery through a civil lawsuit. Experienced attorneys can evaluate the details of your case and explain your legal options. If you notice that your loved one names a non-family member as a beneficiary or fiduciary, or if he or she adds a non-family member to a joint banking account, explore his or her reasons for doing so more in-depth. If a fiduciary act in a way that reflects poor judgment or conflict of interest, take that as a red flag. You should also look for evidence of checks prepared by others but signed by your loved one. Pay extra attention if you notice that one child or another person is particularly dependent upon the elderly individual. When preparing your estate documents, avoid plans that favor one child, particularly a child who lives with the elderly individual – those can be breeding grounds for undue influence. Keep an eye out for excessive fees charged by financial advisors, trustees, attorneys or other professionals. Finally, if your loved one’s understanding of his or her estate and its true value are inconsistent, you may want to explore the possibility of undue influence more seriously.
We here at Jerimy Kirschner and Associates take undue influence and financial abuse extremely seriously. We always meet with our clients one on one to determine cognition and understanding. We work for our clients and advocate on their behalf, not on their families or beneficiary’s behalf. We pride ourselves on our ability to be sincere, kind and honest when handling your estate and assets. If you need help securing your assets, finances, and estate, please call us at 253.240.4444 – we promise we can provide you some peace of mind.