Invalidating a Trust on Account of Elder Financial Abuse: Keystone Helps Invalidate Trust Favoring “Sugar Daddy” Abuser and Secures Sizable Settlement for the Decedent’s Rightful Beneficiaries
Mental anguish can leave a person vulnerable to bad actors who are quick to take advantage of them. In this case, a wealthy older man struggling with loneliness and depression was exploited by a younger man he met off a “sugar baby” dating site.
Despite having only known the older man for the span of a few weeks, the sugar baby managed to convince him to amend his trust (which contained almost all of his assets) to name him as the sole beneficiary and trustee.
When the older man suspiciously turned up dead three weeks later, the beneficiaries under the prior version of his trust sought the help of Keystone’s experienced trust and will dispute attorneys to have the new version of the trust invalidated because of the strange circumstances that caused the trust to be amended.
Overview
The beneficiaries under the prior version of a decedent’s trust retained Keystone because they had been disinherited from the trust under suspicious circumstances. The clients were the sister and nieces of the decedent’s ex-husband, to whom the decedent had been married for nearly 20 years.
The decedent had left the assets in his trust to our clients, despite them not being his heirs, because he did not have any close family members. The clients were seeking to contest the decedent’s newly inked trust because they believed a dangerous lover, who the decedent had barely known, had manipulated the decedent into executing a trust amendment that named him as the sole beneficiary and trustee.
A trust may be contest because the creator of the trust (called the settlor, grantor or trustor) lacked the mental capacity to execute a trust when they did; however, this was not your run-of-the-mill trust contest. In this case, the decedent had not only been competent but he had been a successful attorney before retiring. Additionally, his estate plan had been drafted by a premier estate planning firm in Los Angeles.
Another factor that was working against Keystone’s clients was their lack of relational ties to the decedent. While they had been beneficiaries under the prior version of the decedent’s trust, which gave them standing to contest the new version of the trust, they were no longer related to the decedent. Their only ties to the decedent had been through the decedent’s former husband, and those ties had been severed when the couple divorced.
Given these circumstances, Keystone’s trust attorneys knew they had their work cut out for them if they were to successfully prove the decedent’s trust should be invalidated. They carried out a far-reaching investigation into the facts surrounding the case and were able to gain insight into the broken mental state of the decedent at the time he signed the trust. They also were able to demonstrate how the abuser had made a practice out of conning wealthy “sugar daddies” out of their fortunes.
In the end, Keystone helped invalidate the new version of the trust by arguing that the decedent had been a victim of elder financial abuse. In turn, Keystone’s clients received a favorable settlement that approximated the value of their former shares of the decedent’s trust.
What Is Elder Financial Abuse?
Elder financial abuse is a crime that deprives elderly and dependent adults of their resources and, ultimately, their financial independence. It is not uncommon for elders to begin losing competence toward the end of their lives, which leaves them especially vulnerable to financial exploitation through undue influence or fraud.
Unfortunately, elder financial abuse occurs all too often, and it cumulatively costs elders anywhere from $2.6 billion to $36.5 billion annually — although the numbers are probably higher since elder financial abuse is generally underreported, according to the National Council on Aging.
Our probate attorneys routinely handle cases in which the financial abuse perpetrated against an elderly or dependent adult has led the adult to surrender some or all of their assets to their abuser or drastically alter their estate plans to favor them. It is ideal when abuse is discovered during the victim’s lifetime so the victim can enjoy the fruits of successful litigation, but the more common scenario is for abuse to be discovered after the victim’s death when their assets are being inventoried by the trustee of their trust or personal representative of their estate.
Following the death of a financial abuse victim, the trustee, personal representative, estate beneficiaries or trust beneficiaries (depending on which document is subject to litigation) or heirs can litigate on behalf of the decedent’s trust or estate to try to recover the assets that were lost and possibly even damages.
“Regardless of whether financial abuse is detected before or after a victim’s death, it is crucial for swift legal action to be taken to prevent further financial harm from being perpetrated,” says Joshua D. Taylor, a Partner at Keystone who supervised the case.
An In-Depth Look into Keystone’s Elder Financial Abuse Case: The “Sugar Daddy” Abuser
It had been a tough year for the 78-year-old man. His longtime partner had filed for divorce. The prestigious job he had held for a number of years no longer needed his services. And he was terrified of being alone. As he sunk into the depths of depression, this once-cautious man began acting impulsively and erratically.
Desperate for companionship, the decedent had started frequenting a dating website that connects wealthy “sugar daddies” with “sugar babies.” Sugar babies refer to men or women who are looking to enter into financial agreements with wealthy older individuals where intimacy and friendship are traded for money and gifts. The decedent’s dangerous pastime had led to a string of encounters with younger men who openly took advantage of him, conning him out of thousands of dollars and robbing him of his dignity.
The decedent’s most recent sugar baby had wanted even more that his past lovers. Just a few months after meeting the decedent, the young man demanded that the decedent change his trust to make him the sole beneficiary and trustee. The actions would nullify the decedent’s previous trust from which all assets were supposed to pass to Keystone’s clients.
The older man told some of his close personal contacts, including his friend and financial adviser, that he feared his young lover would leave him if he didn’t create a new trust. Despite the financial adviser raising concerns, the decedent proceeded with creating a trust that named his young lover as the sole beneficiary and trustee. Approximately three weeks later, the decedent was found dead in his home.
It would be an understatement to call the circumstances surrounding the decedent’s death strange. Even though law enforcement ruled the death as accidental, the evidence suggested possible foul play.
Understandably distraught by the decedent’s untimely death, the decedent’s ex-husband shopped this case around extensively to other attorneys. Given the fact that neither the ex-husband nor Keystone’s clients were directly related to the decedent at the time of his death, and that the decedent’s estate plan had been prepared by one of the preeminent estate planning firms in Los Angeles, most firms passed on the case, believing Keystone’s clients would not be sympathetic figures to the court.
Keystone, on the other hand, believed in the clients, so we decided to take the risk. Our attorneys ultimately proved to them that their faith was not misplaced, and that the case was worth fighting.
Clear and Convincing Evidence
When deciding whether to take a case such as this one, attorneys have to determine whether sufficient grounds for contesting the trust exist.
“Anytime you have a trust instrument that’s executed and notarized, the presumption is that it’s a valid document. The law looks at that and says, ‘OK, this is presumptively valid,’” Roee Kaufman, the Senior Associate at Keystone who handled the day-to-day of the case, explains. “To contest it, you have to bear the burden of proof, and it’s a high burden.”
On the surface, the facts appeared weak, and it was unclear whether it would be possible for the clients to contest the trust and win. Not only did they no longer have a relational connection with the decedent due to the decedent’s recent divorce from their brother/uncle, but there was no evidence to suggest the decedent had been suffering from cognitive impairment at the time he signed the new trust. To make matters worse, the new trust was prepared by a highly reputable law firm. These facts made for an uphill battle.
But when the evidence is clear and convincing, a favorable outcome is possible.
Results
As Keystone’s trust and will dispute attorneys began looking into the facts of the case, they gained further insight into how the decedent’s loneliness and depression — and willingness to pay a high price for attention — made him an easy target for elder financial abuse.
The turning point in mediation came when Keystone’s attorneys were able to show that the abuser’s actions were part of a scheme he had created to defraud wealthy elderly men. They managed to obtain testimony from another sugar daddy off the same dating site the decedent had used who also had been financially abused by the decedent’s sugar baby in much the same fashion as the decedent.
When it came time to mediate the case, the identity of the sugar baby’s prior victim proved to be key. “All I had to do at mediation was mention the guy’s name and the other side folded,” Kaufman says.
Despite the myriad of challenges the case presented, Keystone was able to reach a favorable settlement for its clients that called for the new version of the trust to be invalidated. They did this by arguing the sugar baby’s actions constituted elder financial abuse.
In another twist, local police also reopened the investigation into the decedent’s death based on an independent forensic analysis of the scene of death that had been ordered by Keystone’s clients.
“It was an uphill battle,” Shawn S. Kerendian, Managing Partner of Keystone, says. “But we conducted far-ranging discovery, which provided further insight into the decedent’s broken mental state at the time the trust was signed and revealed just how far the abuser was willing to go to get what he wanted.”
The Takeaway
Letting the wrong people into your life can be financially disastrous. Unfortunately, elderly persons, especially those who are not of sound mind, don’t always recognize that they are being taken advantage of.
While it is ideal when the victim of financial abuse or their loved ones detects abuse and litigates it while the victim is still alive, too often financial abuse remains undetected until after the victim’s death. It can be difficult to win cases when the victim is not alive to fight on their own behalf —and especially when the relational connection with the decedent has dissolved. But, as this case proves, it’s not impossible.
An elder financial abuse attorney who is well-versed in contesting wills and trusts that were drastically altered as a result of abuse will go the extra mile to gather clear and convincing evidence to help you prove that the will or trust in question should be invalidated.
Have a similar legal issue? Request a free consultation with our elder financial abuse attorneys.
Did a decedent drastically alter their will or trust at the urging of someone close to them? Did they have assets that cannot be found?
Elder financial abuse is perpetrated against countless vulnerable adults every day. Whether you are a loved one of a decedent trying to recover assets belonging to their estate or trust, or you are yourself a victim of financial abuse, Keystone’s probate attorneys can help investigate your claim and recover any assets that were lost to the abuse.
Request a free consultation to speak with an attorney at our firm today.
