Page 15 - Senior Times South Central Michigan - June 2016 - 23-06

Senior Times - June 2016 Financial Exploitation
Page 15
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By: Steve Staple
Recent stories in the media have been rife with high profile examples of financial exploitation of the elderly. Elder financial abuse is estimated to be anywhere from a $2.9 billion to a $36.48 billion problem annually. Even more troubling, the persons preying on the elderly are often trusted advisors, friends and family.
Michigan law provides some corrective measures to address the financial exploitation of the elderly, but as with one’s health, preventa- tive measures are far more effective.
In situations where the exploitation is already suspected to have occurred, there are a number of different ave- nues of redress. First and foremost, Michigan law makes certain forms of financial exploitation of the elderly a crime, punishable with both fines and imprisonment. See MCL 750.174a.
The validity of financial transac- tions can also be challenged in court under a number of different theories, including breach of fiduciary duty, undue influence, fraud, conversion, breach of contract, and others. Timely litigation may allow the effects of the financial exploitation to be amelio- rated. This firm’s elder law attorneys have utilized litigation to invalidate
a real estate transaction between a mother and one of her daughters, who unfortunately attempted to transfer certain real estate from her elderly mother without consideration.
Litigation is remedial or correc- tive, but does nothing to prevent the exploitation from occurring in the first instance. Moreover, while potentially effective, litigation is both expensive and time consuming to the point where the ultimate remedy secured is of little value to the elderly individual. Unlike litigation, actions taken prior to the exploitation have the benefit of acting as preventative, stopping exploitation before it happens. Some types of pre- ventative actions that should be con- sidered include:
1. Conservatorship. Under MCL 700.5401(3)(a), the jurisdiction of the probate court can be invoked when an individual, including an elderly indi- vidual, is no longer able to manage his
or her financial affairs. Once an indi- vidual is subject to a conservatorship, the individual will no longer be able to enter into contracts and other financial arrangements absent the consent of the conservator.
2. Caregiver Agreements. Even if the potential caregiver is a loved one or close friend, elderly individuals and those family members of elderly indi- viduals would be well-served to enter into formal agreements concerning the care to be rendered. Careful screen- ing of potential caregivers is further advisable and can be used in conjunc- tion with a written agreement. Clear expectations, along with prohibitions on certain actions can help prevent exploitation.
3. Estate Planning. Careful estate planning can also help stop financial exploitation of the elderly before it happens. For example, creation of a trust and retitling certain assets in the trust can prevent the direct exploitation of the elderly, by forcing the poten- tial scammer to deal with the validly appointed trustee. For larger estates, further protections can be built into
the trust document itself, including the appointment of a so-called “trust protector,” endowing such person with the power to direct certain actions in relation to the trust. A durable power of attorney can also be utilized to per- mit another individual to have author- ity to manage assets and make other decisions, particularly in the event of disability. Having a durable power attorney in place can prevent a poten- tial predator from directly preying on your elderly loved one.
4. Communication. Perhaps the best defense against the exploitation of the elderly is active and open lines of communication. The more time spent with a loved one, the more you will
be informed about his or her mental capacity and general disposition.
The financial exploitation of the elderly is a continuing and growing problem. Taking precautions to safe- guard against exploitation is impera- tive. As the old saying goes – better safe than sorry.
Steve Staple is an attorney in the Battle Creek office for Kreis, Enderle, Hudgins & Borsos.
of the Elderly
Age For Full Retirement Benefit
For Retired Workers
Full retirement age is the age at which a person may first become entitled to full or unreduced retirement benefits. Your full retirement age depends on your date of birth. The age for Medicare eligibility is 65, regardless of when you were born.
For more information, go to http://www.socialsecurity.gov/planners/retire/ retirechart.html.
Year Of Birth
1937 and earlier
...................... ....... ............... ....... ............... ...................... ....... ............... ...................... ...................... ....... ............... ....... ............... ....... ............... ....... ............... ...................... ......................
Full Retirement Age (FRA)
65
65 and 2 months 65 and 4 monrths 65 and 6 months 65 and 8 months
65 and 10 months
66 months
66 and 2 months 66 and 4 months 66 and 6 months 66 and 8 months 66 and 10 months 67
1938. .... .
1939. .... .
1940 ..... 1941. .... . 1942 ..... 1943–1954
1955. .... .
1956. .... .
1957. .... .
1958. .... .
1959 ..... 1960 and later . .
... . ... . .... ... . .... .... ... . ... . ... . ... . ....
Maximum monthly Social Security benefit:
$2,642 for workers retiring at full retirement age in 2014.
Note: Higher benefits are possible for those who work or delay receipt after reaching FRA.