Can Financial Elder Abuse Be a Serious Threat to a Trust?

Financial elder abuse is a growing crime because elders are often vulnerable to various forms of deception. In California, an "elder" is a person over the age of 65. The law considers an elder more vulnerable to being abused because of his or her advanced age. Elder abuse can take many forms such as physical abuse, neglect and abandonment, as well as financial abuse.



Financial elder abuse can manifest in many forms. The simplest form is when a person takes money from an elder's wallet. More complex forms of financial elder abuse include fraudulently convincing an elder to sign over his house, money, property or estate to another person. Another form is the improper use of guardianship, conservatorship or power of attorney to obtain the elder's property.

A unique form of financial elder abuse is the financial abuse perpetrated by the trustee or trustees of a living trust on the beneficiaries of the trust. In a living trust, the creator of the trust, the trustor, appoints one or more trustees to manage and distribute his or her trust or estate to beneficiaries after death. Such trustees could be family members, financial advisors or certified fiduciaries. In California, these trustees are held to the legal standard of fiduciary duty once they start to act as trustees. Some of these trustees breach the fiduciary duty they owe to the beneficiaries of the trust by taking, embezzling, or co-mingling funds, not making or withholding distributions, not paying money or giving property to the beneficiaries according to the terms of the trust. Other methods involve taking money or property from the trust or estate instead of distributing it to the beneficiaries, losing or mismanaging trust property, and charging excessive fees. If the trustees' wrongdoing is directed at elders, it could amount to financial elder abuse.

California law provides a variety of remedies for those who have been injured by a trustee's breach of fiduciary duty. Under Probate Code, such remedies include compelling the trustee to perform his duties, compelling the trustee to return money or property to the trust, compelling the trustee to provide accountings to beneficiaries, suspension of trustee or even removal of trustee. In addition, if the trustee's wrongdoing was directed at an elder, the elder can also pursue remedies under California Elder Abuse and Dependent Adult Civil Protection Act, Welfare & Institutions Code Section 15600 et seq. This statute provides for a variety of remedies, including attorney's fees and costs. In addition, if a plaintiff can prove that the defendant acted with "recklessness, oppression, fraud, or malice in the commission of the abuse," the damages could be tripled.

Tucker Cheadle is an attorney, a tax expert, and a licensed professional fiduciary. He has acted as a fiduciary, trustee, executor, and administrator on more than 70 trusts and wills. Call Tucker Cheadle at 949-553-1066. He is experienced in seeking relief for financial elder abuse in both the Probate and Civil Court.