Category: Elder Law
By all indications, the abuse of Powers of Attorney to misappropriate assets is on the rise.
When a grantor gives powers to an attorney to manage the grantor’s property, it allows the attorney to assist the grantor in managing property, and in fact to take over management of property altogether if the grantor does not monitor the situation. Often the very goal of the grantor is to allow someone else to completely take over management of one’s property due to age, potential incapacity or other reasons, so the grantor has no intention to monitor.
This is often a reasonable choice, and the law holds attorneys to a high standard to protect grantors. However, the potential for abuse is immense. Abuse can be willful or simply negligent, but in either case the damage can be devastating and irreversible. In many cases attorneys who stray from their duties are never made to account, although they have that obligation. Often they live with the grantor and have little or no oversight. The legal fees in securing justice are generally high, and the chances of recovering on a judgment can be low. In the result, legal proceedings might be impractical, however blatant abuse may be in a given case.
The best defence against this problem is awareness, so these varied results from a quick internet search are somewhat encouraging: a Florida law firm website; an excellent Vancouver Sun article; a synopsis of a TV news story; the New York Attorney General’s website; a news report of a Philadelphia trial; and a news release from Prince Edward Island’s provincial government commenting on the problem for World Elder Abuse Day.
This is the tip of a very large iceberg: by all indications lawyers, financial institutions, governments and of course the public will be wrestling with a growing problem for years to come.
Thanks for reading.
A massive $110 million lawsuit has been brought by the Attorney General’s office in California against a “living trust mill that tricked senior citizens into using their retirement savings to buy annuities that often made less financial sense for the elderly victims but earned the con artists substantial commissions and other income.”
Estate Planning Law Firms.com quotes the Attorney General as saying the following:
“The perpetrators of this fraud deceived seniors into using their hard-earned retirement nest eggs to buy unneeded annuities that actually undermined their financial security. Living trust mills such as this one violate not only the law, but the trust of their elderly victims.”
What surprised me was the apparent scope of the alleged organization being sued by the Attorney General: between 250 and 300 sales agents and another 80 telemarketers were involved, allegedly soliciting elderly consumers through mailings, seminars, telemarketing, presentations at senior centers and other means, marketing their services as a way to avoid probate and estate taxes, then eventually convincing seniors to buy annuities that were, according to the Attorney General, not in their best interest.
Without commenting on this particular case, there does seem to have been a disturbing and growing trend in recent years of attempts to deprive the elderly of the considerable wealth concentrated in their hands.
One more reason, if any were needed, to take great care in choosing investment and estate planning advisors.
Thanks for reading.
The Canadian Centre for Elder Law (CCEL), a division of the British Columbia Law Institute (BCLI), issued a media release on February 28, 2008 advising that it has just released its Study Paper on Predatory Lending Issues in Canada.
In its media release the CCEL noted that while the subprime mortgage crisis in the United States has made the issue of predatory lending a hot topic worldwide, little attention has been paid to the legal aspects of predatory lending in the Canadian mortgage market.
Ron Skolrood, Chair of the BCLI’s board of directors, remarks in the media release, “It appears that there are no specific laws to protect Canadians from a similar crisis occurring here”…“This study paper serves as a starting point for further discussion.”
The Executive Summary of the Study Paper states, “The study paper’s focus is primarily on how predatory lending may affect older homeowners, but similar issues may arise in connection with individuals who are purchasing a home and obtaining a new mortgage.”
Parts of the paper deal with factors in the Canadian mortgage market that may encourage or deter the development of predatory lending as well as existing Canadian legal remedies for abusive lending practices.
The media release notes that while many Canadians think of predatory lending and the mortgage crisis as an American phenomenon from which they are safe, and though the lending atmosphere in Canada has historically been more cautious than in the United States, the extent to which predatory lending occurs in Canada is largely unknown.
For those interested, a full text of the paper is available on the BCLI’s website (www.bcli.org).
Have a great day.
During Hull of Estate and Succession Planning Episode 32, we continued to discuss the Elder Law Conference with an emphasis on what the Canadian Centre for Elder Law Studies is currently working on, highlighing their past work and discussing its mission of enriching and informing the elderly in the law.