Financial Elder Abuse - What You Need to Know

August 31, 2018

Financial abuse of elderly and dependent adults has been a long recognized and growing problem in this state. There are currently over 5 million elders (those aged 65 or older) in California, and that number is expected to rapidly grow as the population ages. With the aging of the population, it is important to know the laws in place to protect elderly and dependent adults. Recognizing that “elders and dependent adults may be subjected to abuse, neglect, or abandonment and that this state has a responsibility to protect those persons,” the California Legislature enacted the Elder Abuse and Dependent Adult Protection Act. [Cal. Welf. & Ins. Code § 15600(a).] One of the purposes of this Act is to “direct special attention to the needs and problems of elderly persons, recognizing that these persons constitute a significant and identifiable segment of the population and that they are more subject to risks of abuse, neglect, and abandonment.” [Welf. & Ins. Code § 15600(b).] With this Act, the Legislature created a broad and powerful statute that “enable[s] interested persons to engage attorneys to take up the cause of abused elderly persons and dependent adults.” [Welf. & Ins. Code § 15600(j).] While elder and dependent adults are undoubtedly at risk of physical abuse and neglect, they are often subjected to financial abuse as well.

What is Financial Elder Abuse?
Financial abuse of an elder or dependent adult occurs when a person (1) takes, secretes, appropriates, obtains, or retains (2) the real or personal property (3) of an elder or dependent adult (4) for a wrongful use or with the intent to defraud, or both. [Welf. & Ins. Code § 15610.30(a)(1).] A person is equally liable for financial elder abuse if he or she “assists” another in the above. [Welf. & Ins. Code § 15610.30(a)(2).]

The first two elements (taking, secreting, appropriating, obtaining or retaining real or personal property) are relatively straightforward. A typical example would be a caregiver forging a check from the elder’s account.

The third element is also easy to determine. An “elder” is any person residing in California, aged 65 or older. [Welf. & Ins. Code § 15610.27.] A “dependent adult” is any person residing in California between the ages of 18 and 64 who has physical or mental limitations that restrict his or her ability to carry out normal activities to protect his or her rights, including those who have physical or developmental disabilities or whose physical or mental abilities have diminished with age, regardless of whether the person lives independently. [Welf. & Ins. Code § 15610.23(a).]

Demonstrating wrongful use and/or an intent to defraud can be done in one of two ways. A plaintiff can attempt to show that the defendant acted “with intent to defraud” by fulfilling the normal elements of a fraud cause of action, and pleading fraud with particularity. Demonstrating “wrongful use” is much simpler. A plaintiff can show that a defendant took property “for a wrongful use” by demonstrating the defendant knew or should have known this conduct was likely to be harmful to the elder or dependent adult. [Welf. & Ins. Code § 15610.30(b); see, also, Bounds v. Superior Court (2014) 229 Cal.App.4th 468, 480 (prospective purchasers’ alleged acts of using undue influence to procure trustee’s signature on multiple documents to sell trustee’s corporation’s place of business, after having been informed that trustee was acting with diminished capacity, were sufficient to establish that their taking of the property was for a “wrongful use” under the Elder Abuse Act).]

A person is also liable for financial elder abuse if he or she takes, secretes, appropriates, obtains, or retains real or personal property of an elder or dependent adult, or assists in doing so, by undue influence. [Welf. & Ins. Code § 15610.30(a)(3).] “Undue influence” is excessive persuasion that causes another person to act or refrain from acting by overcoming that person’s free will and which results in inequity. [Welf. & Ins. Code § 15610.70(a).] Certain factors are considered in determining whether someone has used undue influence. These include the victim’s vulnerability (such as incapacity, illness, disability, injury, age, education, impaired cognitive function, emotional distress, isolation or dependency, and whether the influencer knew or should have known of the alleged victim’s vulnerability), the influencer’s apparent authority (such as his or her status as a fiduciary, family member, care provider, healthcare professional, legal professional, spiritual advisor, expert, or other qualification), the influencer’s conduct (which may include controlling the necessaries of life, medication, the victim’s interactions with others, access to information, or sleep; use of affection, intimidation, or coercion; initiation of changes in personal or property rights, use of haste or secrecy in effecting those changes, effecting changes at inappropriate times and places, and claims of expertise in effecting changes), and the equity of the challenged result (including the economic consequences to the victim, any divergence from the victim’s prior intent or course of conduct or dealing, the relationship of the value conveyed to the value of any services or consideration received, or the appropriateness of the change in light of the length and nature of the relationship).

Remedies Available in Financial Elder Abuse Claims
If it is proven by a preponderance of the evidence that a defendant is liable for financial elder abuse, “in addition to compensatory damages and all other remedies otherwise provided by law, the court shall award to the plaintiff the reasonable attorney’s fees and costs.” [Welf. & Ins. Code § 15657.5(a) (emphasis added).] Attorneys’ fees are unilateral to the plaintiff, only. [Balisock, Elder Abuse Litigation (The Rutter Group 2017) ¶ 8:6.] Thus, the broad language of the Elder Abuse and Dependent Adult Protection Act, plus the award of attorneys’ fees and costs to plaintiffs, make this Act an invaluable tool for elder and dependent adults to enforce their rights.

Further, if it is shown by clear and convincing evidence that the defendant acted with recklessness, malice, fraud, or oppression, damages for pain and suffering may be imposed after the death of the victim. (Such damages are ordinarily not recoverable for decedent-victims.) [Welf. & Ins. Code § 15657.5(b).] This provision only applies to victims who have died. For living victims of financial elder abuse, the remedies are compensatory damages, attorneys’ fees, and costs.

Punitive damages are also recoverable pursuant to Civil Code section 3294. [Welf. & Ins. Code § 15657.5(d).] The Legislature has also authorized the use of writs of attachment in cases of financial elder abuse. [Welf. & Ins. Code § 15657.01.] An “attachment” is a pre-judgment provisional remedy that allows a creditor to seize the assets of the defendant to secure a judgment, should judgment later by awarded to the plaintiff. Certain important limitations on the right to attach have been lifted for financial elder abuse cases, thus making writs of attachment available on all property in financial elder abuse cases in which damages are sought. [Balisock, Elder Abuse Litigation (The Rutter Group 2017) ¶¶ 8:33, 8:38.]

Typical Fact Patterns of Financial Elder Abuse
There are some common fact patterns indicating that financial elder abuse is occurring. These include family theft or overreaching, caregiver theft or overreaching, lawyer or accountant misconduct, and banker and teller misconduct.

The following are common “red flags” to look out for, although these are by no means exhaustive:

Signatures on checks that do not resemble the elder’s signature
Legal documents signed by the elder when he or she is physically incapable of writing
Expensive gifts made by the elder
Inappropriate or unusual banking activity
Missing cash or jewelry
Long-lost relatives or new friends spending time with the elder
Sudden changes being made to wills or trusts
Adding individuals to accounts in exchange for promises of continued care
Relative’s interest in “saving” the money being spent on the elder’s care
Unpaid bills when a family member has been designated to pay the bills
Lifestyle changes such as a decline in personal hygiene or lack of appropriate clothing or grooming items when the elder is able to afford such things

Need more information?
If you suspect that you or someone you know has been a victim of financial abuse of an elder or dependent adult, please contact ESKRIDGE LAW by phone (310/303-3951), by fax (310/303-3952), or by email (geskridge@eskridgelaw.net.) Please also visit our website at eskridge.hv-dev.com.

This article is based on the law as of the date posted at the top of the article. This article does not constitute the provision of legal advice, and does not by itself create an attorney-client relationship with Eskridge Law.

Financial Elder Abuse — What You Need to Know