THE GROWING PROBLEM OF ELDER ABUSE
Elder abuse is becoming an increasingly dangerous problem in this country.
According to the American Psychological Association, more than 2 million
seniors annually suffer from either physical or financial elder abuse.
It has been estimated that exploitation of the elderly costs its victims
around $36.5 billion per year.
And the problem will only get worse as our population ages. It is estimated
that the population of ages 65+ will nearly double by 2030. With an aging
population, the opportunities for elder abuse will increase exponentially.
HOW CAN AN ESTATE PLAN HELP PROTECT YOU FROM ELDER ABUSE?
It is common knowledge that an estate plan consisting of a trust and will
is necessary for the orderly transfer of your assets to your loved ones
upon your death. But did you realize that your estate plan can also play
an invaluable role during your lifetime to protect you from being taken
advantage of and/or from being isolated from your loved ones?
A comprehensive estate plan will normally consist of two documents allowing
a trusted loved one to take over the management of your financial affairs
if you become unable to manage them yourself. The first is a “springing”
power of attorney. It “springs” into effect upon the occurrence
of a specified event. In most cases, this event is the incapacity of the
principal.
But how can a loved one prove incapacity in order for the power of attorney
to spring into effect? Usually a power of attorney will require letters
from two doctors certifying the incapacity. In order to satisfy HIPAA
privacy laws, you should also have a medical power of attorney or advance
health care directive that authorizes your doctors to provide your medical
information to your agent in the case of incapacity. Thus if a loved one
becomes concerned that you are becoming incapacitated or may be subject
to elder abuse, they may be able to gain control of your finances through
your power of attorney in order to safeguard your assets.
Your power of attorney serves another important function in preventing
elder abuse. Even though you have a well-drafted estate plan, you still
may require a conservatorship should you become incapacitated. A conservatorship
is obtained through a court proceeding in which the court appoints a person
to act as your conservator to manage your financial affairs and/or make
medical decisions on your behalf.
In your power of attorney, you can nominate a trusted loved one to act
as your conservator. The court is required to appoint that person unless
the court finds it is not in your best interest for that person to serve.
The second document in your estate plan that can prevent elder abuse is
your trust. In your trust, you are required to appoint a trustee to manage
your assets, and you transfer ownership and control of your assets to
your trustee. In most cases, you will serve as the trustee during your lifetime.
However, what happens to the control of the assets in your trust if you
were to become incapacitated? A good trust will contain “incapacity”
provisions that allow a successor trustee to take over management of your
assets in the event of your incapacity. Again, most trusts will require
letters from two physicians certifying your incapacity.
Together, your power of attorney and trust should protect your assets should
you become incapacitated, without the need for someone to file for a conservatorship.
When you speak to your estate planner, talk to him/her about how you can
prepare for your incapacity. Appropriate language can also be included
to specify with whom you would like to visit, so you can avoid elder abuse
by isolation from loved ones.
Troy Martin, 310-274-8700, lurie-zepeda.com
Troy Martin is an attorney and experienced litigator representing clients
in trust and estate disputes and probate litigation through the firm of
Lurie, Zepeda, Schmalz, Hogan and Martin. He is a member of Torrance Memorial’s
Professional Advisory Council.