Civil Remedies For Elder Financial Abuse

Private civil actions for elder financial abuse under state law could include a complaint for restitution, compensatory damages, and punitive damages under one or more of the following.  The burden of proof for civil claims is usually "preponderance of the evidence."

1. Specific statutory causes of action for elder financial abuse or exploitation.
2. Fraud or constructive fraud on the elder.
3. Breach of fiduciary duty, or aiding and abetting a breach of fiduciary duty, to the elder.
4. Negligence.
5. Rescission of transactions that damaged the elder.
6. Conversion of assets stolen from the elder.
7. Actions for an equitable accounting of the actions of a fiduciary charged with managing the property of the elder, whether as a Trustee or an agent (e.g. under a Power of Attorney).  Section 116 of the Uniform Power of Attorney Act (“UPOAA”) allows for certain persons to petition a court only “to construe” a Power of Attorney or “to review the agent’s conduct” thereunder, and to grant appropriate relief, but only if the Principal lacks the capacity to revoke the Agent’s authority or the Power of Attorney.  The persons who may petition for this judicial relief include the following.

a.     The Principal or the Agent

b.    A guardian, conservator, or other fiduciary acting for the Principal

c.    A person authorized to make health care decisions for the Principal

d.    The Principal’s spouse, parent, or descendant

e.    An individual who would qualify as a presumptive heir of the Principal

f.    A person named as a beneficiary to receive any property, benefit, or contractual right upon the Principal’s death, or as a beneficiary of a trust created by or for the Principal, that has a financial interest in the Principal’s estate

g.    A governmental agency having regulatory authority to protect the welfare of the Principal

h.    The Principal’s caregiver or another person that demonstrates sufficient interest in the Principal’s welfare

i.    A person asked to accept the Power of Attorney.

Disinheritance statutes.  Several states (including Arizona, California, Illinois, Maryland, Oregon, and Washington) have enacted so-called “disinheritance statutes,” modeled after the more commonly encountered “slayer statutes.”  These laws preclude a convicted perpetrator of elder financial abuse from receiving benefits as a consequence of the death of the elder victim.  The abuser is deemed to predecease the victim for purposes of some or all of the following.

1.  Inheritance under a Will or Living Trust.
2. Inheritance under intestate statutes.
3. Receipt of life insurance proceeds as a designated beneficiary.
4. Elective share, statutory share, or homestead rights.
5. Fiduciary appointments under documents executed by the elder victim.
6. Benefitting as a permissible appointee of a power of appointment.

Registries of persons convicted of elder abuse.  Increasingly, Adult Protective Services agencies are creating and maintaining a registry of convicted elder abuse offenders that can be used to ascertain whether a prospective in-home caregiver (or other person with access to the elder) might have a history of, or propensity for, elder abuse.

Kristen M. Lewis, Esq., Member of the Special Needs Alliance and Fellow of the American College of Trust and Estate Counsel.