Updated: Jul 23, 2020
Do you know what would happen to your parents if anything were to happen to them? Do they keep you “in the know” about their legal, insurance, and financial matters?
Today, I want to focus on one of the major risks of not being “in the know” when it comes to your parents’ estate planning matters: the undue influence of bad actors.
It’s an unfortunate fact that predators emerge during times of upheaval to take advantage of people. That means the COVID-19 pandemic can leave your parents vulnerable in more than one way. However, even before the pandemic, and even when things go back to normal, financial exploitation is still a major risk for our parents.
I’ve seen it happen far too often. In fact, I got a call from someone yesterday to talk about it. Maybe your elderly parents live far away from you and someone else gets close to them. Maybe your parents have a close relationship with a financial advisor who isn’t really looking out for their best interests. As was the case for the person I spoke with yesterday, this person could even be another family member.
Sometimes, when people with ill intent become involved with your parents’ lives and assets, it can lead not only to a loss of money, but even a loss of personal freedom. One of the worst cases of this I’ve heard of involved a man named Milo. Milo was a veteran who lived in Arizona. Milo's son Greg, lived in California. All Milo had was a savings account with $140,000 and income of about $3,700 a month. Milo was concerned that a family member was 'borrowing' his money and he couldn't say no so he asked Greg to help.
Greg applied for guardianship of Milo’s money, and the court granted it to him. At the same time, without notifying Greg, the court appointed a professional financial Conservator that neither Milo or Greg knew. Greg as the Guardian was responsible to decide where the money was spent, and the Conservator's responsibility was to decide how to properly manage the money. Unfortunately, the Conservator quickly set to draining Milo’s small savings, with the court barring Greg from filing any more motions.
The situation escalated even further when the Conservator decided to move Milo from his assisted living facility to a cheap lock-down facility because the assisted living facility was too expensive. Before it could happen Greg picked Milo up and brought him to California to live with him.
Now, the two are essentially on-the-run from authorities, who are trying to bring Milo back to Arizona and under the control of the Conservator. Milo and Greg are out of funds and are trying to raise $15,000 to hire a lawyer in California to help free Milo from this terrible situation.
The scariest part is that Milo and Greg had all the proper legal documents in place. Sometimes, though, that is not enough to protect your parents from being taken advantage of—even to this extreme of a level. Especially in a time of stress and confusion like we are currently living in, it is vital to be vigilant and get the best possible counsel to avoid something like this happening.
I don't want to make you paranoid or distrustful of the people around you, or of how your parents handle their own lives. The purpose of this is to act as a call to action to encourage you and your family to be aware, educated, and empowered in knowing what risks are possible for your parents.
Look out for the following actions I have seen from influencers:
Preventing important communication between family members;
Withholding documents from other family members;
Encouraging financial gifts or economic benefits to recently-met connections (usually in the same network as your parents’ “new friend”);
Naming recently-met connections as power of attorney, or as a joint owner on financial accounts, real estate, and other assets;
Giving financial advice that may not be in your or your parents’ best interests, but rather in the interests of the advisor.
One of the most important things you can do is to talk with your parents now about how they want their affairs to be handled. Also, you should immediately investigate any situation where you suspect your loved ones are being taken advantage of. There have been too many cases of financial abuse or inappropriate influence where family members are too late to stop the bad actor. In fact, with the person I spoke to yesterday, her grandmother's power of attorney has already given away two pieces of land, spent down her assets, and is moving her out of her house. Most of these things can't be 'fixed' retroactively.
Ideally, you should know the value of your parents’ tangible assets (i.e. home, car, business, stocks) as well as their intangible assets (i.e. generational stories, personal relationships, theological legacies). Additionally, you should be working with an advisor to help you understand how family dynamics and the law will impact you, and everything that matters to you and your parents, when they’re gone.
If you’d like our assistance in considering your parents’ affairs, and how you can be in a position to support them when they need you, contact us. I, as your Personal Family Lawyer®, can help.