Overview

Our client first came to us after the untimely death of her brother, who passed away unexpectedly after suffering with a serious mental illness. Initially, it was believed that the decedent died with minimal assets apart from his home. However, after Keystone successfully got our client appointed as the administrator of the estate, our client discovered that the decedent actually owned substantial assets worth approximately $50 million. While combing through the decedent’s financial documents, a series of suspicious transactions were discovered and our client came to suspect that it was her brother’s former “caregivers” who had been siphoning money and other valuable property from the decedent.


These pseudo-caregivers had entered her brother’s life at a time when he was suffering from severe mental illness and in need of real help. Posing as his friends, they moved into his home and started gradually taking control of his finances. Within two months of meeting the client’s brother, one of the “caregivers” had already managed to get himself designated as the brother’s attorney-in-fact, which gave him access to everything from the brother’s bank and retirement accounts to his medical records. Worse still, these so-called caregivers actually provided the decedent with the opposite of care by giving him questionable medications and supplements that actually contributed to his physical decline.

Regrettably, the brother’s physical and mental deterioration eventually led to his untimely death. Understanding that these “caregivers” had taken advantage of her brother at his most vulnerable time for their own personal gain, our client was committed to obtaining justice for her brother and hired Keystone, in conjunction with co-counsel, to help recover the assets that had been stolen.

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Financial Elder Abuse

It is an unfortunate reality that persons – especially elderly persons and dependent adults suffering from mental illness – who are incapacitated and/or socially isolated are more susceptible to financial exploitation through undue influence or fraud than people who are fully competent. Our probate attorneys routinely handle cases in which financial abuse perpetrated against an elderly and/or mentally incapacitated person has led the elderly and/or incapacitated person to surrender some or all of their assets to their abusers or drastically alter their estate plans in favor of them, necessitating a trust or will contest.

In the case of our client’s brother, it may have been his loneliness and depression that led him to befriend strangers who did not have his best interests at heart and overlook their numerous acts of financial abuse. It is, of course, ideal when the victim of financial abuse or one of their loved ones notices the abuse and litigates it while the victim is alive, but too often, financial abuse remains undetected until after the victim’s death, as it did in this case.

Following a financial abuse victim’s death, their executor, administrator, trustee or loved ones can litigate on behalf of their estate or trust to try to retrieve the assets that were lost.

“Regardless of whether financial abuse is detected before or after a victim’s death, it is crucial for swift legal action be taken to prevent further financial harm from being perpetrated,” says Roee Kaufman, a senior associate at Keystone who worked on the case. “As a result of the client contacting us as soon as she suspected financial abuse, we were able to get to work investigating the case and stop any additional financial abuse from taking place.”

An In-Depth Look Into Keystone’s Elder Financial Abuse Case

The brother of our client had been a successful and well-known doctor practicing in an affluent Los Angeles neighborhood for upward of 30 years. After sustaining an injury, the client’s brother had become physically disabled, which rendered him unable to perform at work and derailed his medical practice. During this time, his bipolar disorder – characterized by mood swings, manic episodes, erratic behavior and depression – was also becoming more pronounced. He was declining physically and mentally, losing the capacity to manage his personal and financial affairs.

Enter a couple of strangers acting as “caregivers.” Encountering a man who was alone and had hit rock bottom, suffering from serious mental illness and in need of real help, they saw an opportunity to financially profit from his compromised physical and mental state.

During this time, the client’s brother had been arrested and jailed on multiple occasions as a result of manic episodes that negatively affected his ability to think clearly. At one point, he was even placed on an involuntary psychiatric hold. For these reasons, the client believed her brother had been particularly vulnerable to undue influence and fraud at the hands of his so-called caregivers.

After securing authority to act as the decedent’s agent through a power of attorney, the abusers systematically began siphoning off money totaling millions of dollars from the decedent’s accounts both before and after his death. They also ransacked the decedent’s home after his passing, taking several items of valuable personal property and claiming that the decedent had “gifted” them the property during his lifetime.

Results

The facts of this case were so egregious and well-documented that not long after securing our client’s appointment as administrator of her brother’s estate, Keystone’s estate lawyers assisted in persuading the court to appoint what is known as a third-party “receiver” to track down the decedent’s missing assets. Effectively, the receiver was given authority to trace the decedent’s assets and seize those assets wherever they were — whether in possession of the abusers, the abuser’s attorneys, financial institutions, or anywhere else.

 

In the end, the receiver was able to recover approximately $2 million in stolen property from the caregiver abusers. Soon after, Keystone assisted in settling the case in a manner that was beyond favorable to the client. In addition to the $2 million in assets seized on behalf of the estate by the receiver, the caretakers agreed to a judgment that would require them to pay an additional $1 million in damages.

The Abusers Didn’t Get Away With It

While nothing could possibly make up for the financial abuse and untimely death of the client’s brother, this resounding victory did undoubtedly provide some relief to our client, who could be at ease knowing the abusers didn’t get away with the financial exploitation they committed against her brother.

One can hope that in the process, since the perpetrators were forced to pay such a hefty sum in damages and continue to have the $1 million judgment on their record, Keystone’s work might stop the perpetrators from committing financial abuse against another vulnerable person in the future.

The Takeaway

Letting the wrong people into your life can be financially disastrous. People should be careful who they befriend, especially if they are elderly or suffer from mental illness. However, the fact that they are elderly or suffer from mental illness may be the very reason why they don’t notice the abuse that’s taking place.

“Our lawyers frequently handle cases where financial abuse slipped by unnoticed for the longest time, sometimes even after the victim had died,” says Shawn Kerendian, managing partner at Keystone. “It is important to pay attention to your or your loved one’s finances, and, if needed, hire an attorney to help.”

Loved ones of vulnerable persons, such as the client’s brother, can take steps to protect them against undue influence and fraud. Most of the time, this means hiring a conservatorship lawyer to file a petition for a conservatorship over the vulnerable person to protect their health and finances from harm. If the vulnerable person had previously enacted a power of attorney or appointed a trustee of a trust when they were competent, the attorney-in-fact or trustee may also be capable of keeping an eye on their finances and health to ensure nothing is amiss.

While securing a conservatorship may seem costly, it will likely cost less than litigating an elder financial abuse case following the victim’s death. Plus, it could be the very thing that saves their life.

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Find a Conservatorship Attorney

If you are concerned about the living situation, health or safety of a vulnerable individual in your life, Keystone’s attorneys may be your best option for ensuring he or she remains protected at all times. Whether you are looking for a temporary conservatorship or a more permanent solution, the lawyers at Keystone can help. Contact us to learn more!