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www.duttoncaseylaw.com
Kathryn C. Casey
FIRST DO NO HARM
COMBATTING BAD POWERS OF
ATTORNEY, UNDUE INFLUENCE,
AND FINANCIAL EXPLOITATION
PRESENTED BY:
KATHRYN C. CASEY
DUTTON & CASEY, P.C.
UNDUE INFLUENCE
Definition of Undue Influence
In the Elder Abuse Context:
Undue influence occurs when one person (an abuser)
uses his role and power to exploit the trust,
dependency, and fear of another. The abuser uses
his or her power and influence to deceptively gain
control over the decision making of the other person
effectively replacing the will and decisions of the
victim with the will of the abuser. Undue influence is
a characteristic of a relationship where the abuser
gains financial benefits by influencing the victim.
Definition of Undue Influence
In the Legal Context:
A transaction or gift benefitting a person acting in a
fiduciary relationship with the donor/party to the
transaction is presumed to be the result of undue
influence and is therefore presumptively fraudulent.
The presumption of undue influence can be overcome
only by clear and convincing evidence.
Requires: a fiduciary relationship AND a gift or
transaction OR fraud or coercion
Definition of Financial Exploitation
In a civil context:
Breach of Fiduciary Duty - A transaction or gift
benefitting a person acting in a fiduciary
relationship with the donor/ party to the transaction
is presumed to be a breach of fiduciary duty and
the burden shifts to the fiduciary to prove that the
transaction was fair and reasonable, that he
exercised prudent and reasonable care and
judgment, and that he exercised undivided loyalty.
Requires: a fiduciary relationship AND a breach of
duty AND damages
Definition of Financial Exploitation
In a criminal context:
A person commits the offense of financial
exploitation of an elderly person or a person with a
disability when he or she stands in a position of trust
or confidence with the elderly person or a person
with a disability and he or she knowingly and by
deception or intimidation obtains control over the
property of an elderly person or a person with a
disability or illegally uses the assets or resources of
an elderly person or a person with a disability.
Definition of Financial Exploitation
In a criminal context continued:
The illegal use of the assets or resources of an
elderly person or a person with a disability includes,
but is not limited to, the misappropriation of those
assets or resources by undue influence, breach of a
fiduciary relationship, fraud, deception, extortion, or
use of the assets or resources contrary to law.
Identifying Clients at Risk
Advanced age (over 75)
Female
Unmarried/widowed/divorced
Organic brain damage
Cognitive impairment
Physical, mental or emotional dysfunction
Recent loss of spouse or divorce
Living with abuser
Dependence on abuser
Living alone
Social isolation
Estranged from children
Financially independent with no designated financial caretakers
Middle or upper income bracket
Taking multiple meds
Frailty
Fear of change of living situation (e.g. transfer from home to institution)
Implied promise by perpetrator to care for elderly person if funds or material goods are transferred
Characteristics of Perpetrators
Sociopathic or antisocial character disorder
Caregiver role
Living with victim
Being economically dependent on victim
History of mental illness or substance abuse
Often related to victim
Male
Characteristics of Perpetrators
Note: Not infrequently there are business persons who
exploit the impaired elderly by selling inappropriate
products such as annuities with long periods of
withdrawal penalties, stocks, bonds, home improvements.
Characteristics of Perpetrators
Types of Fiduciary Relationships:
In Law (agent to principal or doctor to patient); or
In Fact – some factors to consider:
the degree of kinship of the parties;
the disparity in age, health, and mental condition;
the disparity in education and business experience between
the parties;
the extent to which the allegedly subservient party
entrusted the handling of her business affairs to the other;
and
the extent to which the subservient party reposed faith
and confidence in the alleged fiduciary.
Psychological Methods
Margaret Singer Model of Undue Influence
Creating isolation
Fostering a seige mentality
Inducing dependence
Promoting a sense of powerlessness
Manipulating existing fears or instilling new ones
to create or enhance vulnerability
Keeping the victim unaware and uninformed of the
creation of this pseudoworld
Psychological Methods
Bennett Blum Model
Dependence on Perpetrator - this may be physical
or emotional dependence
Isolation
Emotional manipulation of the victim
Gaining control of the victim’s money or property
LEGAL REMEDIES TO PROTECT SENIORS
Powers of Attorney for Property
Order for Accounting
Court Intervention in POAS
Illinois Power of Attorney Act
Power of Attorney for Property
The Power of Attorney for Property allows an
individual, referred to as the "principal" in the
document, to designate another person, known as the
"agent" to act for the principal as described in the
document for purposes of financial and other
property transactions. The agent stands in the shoes
of the principal and is then legally authorized to act.
Power of Attorney for Property
Requires “legal capacity” to execute by principal
Agents to act one at a time – no co-agents
Can be customized to situation
Can be effective immediately or “spring” into into
action upon occurrence of incapacity
Is revocable and amendable (requires capacity)
Agent can delegate authority to others
Agent entitled to reasonable compensation
Power of Attorney for Property
Must be witnessed; limits who may act as witness
Executing new power of attorney for property
does not revoke old powers unless spelled out
Agent must act in accordance with principal’s
known expectations otherwise in principal’s best
interests
Powers of agent defined in statute unless modified
in document – very broad
Agent must keep record of receipts, disbursements,
significant actions as agent
Powers of Attorney for Property
Duty to Account
Agent must provide upon request a copy of receipts,
disbursements, significant actions to principal or
fiduciary agent on behalf of principal, elder abuse
agency, ombudsman, or court
Standard of Actions
Agent must act in “good faith” using “due care,
competence and diligence” in acting for principal
Gifting
No authority to Gift unless added at paragraph 3
Power of Attorney for Property
New statutory changes define who may go to court to protect principal: principal, agent, guardian, spouse, parent, descendant, heir, death beneficiary, elder abuse agency, ombudsman, caregiver, or anyone demonstrating interest in principal’s welfare
Attorneys fees and costs to elder abuse agency
Duty to Preserve Estate Plan
The agent shall take the principal’s estate plan into account insofar as it is known to the agent and shall attempt to preserve the plan.
Duty of Agent to Account
Agent shall provide record of all receipts,
disbursements and significant actions when asked by:
Principal, guardian or another fiduciary
Provider agency
Office of State Long Term Care Ombudsman
Office of Inspector General
A court
Duty of Agent to Account
POA Act was amended on July 1, 2011 and no
longer requires a physician’s report signed within 90
days finding the victim lacks decision making
capacity before an accounting can be requested
from the agent.
Failure to Account
If the agent fails to provide his or her record of all
receipts, disbursements, and significant actions within
21 days after a request under paragraph (b), the the
court may be petitioned for an order requiring the
agent to produce his or her record.
Failure to Account
If the court finds that the agent's failure to provide his
or her record in a timely manner was without good
cause, the court may assess reasonable costs and
attorney's fees against the agent, and order such
other relief as is appropriate.
Order Revoking Agency
Upon petition by any interested person:
Finding that principal lacks control to direct or
revoke agency; and
Agent is not acting for benefit of principal; or
Action or inaction caused or threatens to cause
substantial harm to principal
The court may revoke the agency
Access Orders
Freeze Orders
Elder Abuse and Neglect Act
Access Orders
Who is Entitled to Access?
Any public or nonprofit agency appointed by the Area
Agency on Aging (with prior DOA approval) to receive
and assess reports of alleged or suspected abuse,
neglect, self-neglect or financial exploitation under the
Elder Abuse and Neglect Act.
Access to Whom?
Eligible adults (person 60 years of age or older who
resides in a domestic living situation)
Reported or found to be victims of abuse, neglect,
self-neglect, or financial exploitation.
Access for What Purpose?
Conducting a face-to-face assessment with the alleged victim of abuse;
Assessing other needs of the alleged victim;
Providing services to the victim of such alleged abuse, neglect, and/or financial exploitation in accordance with the Illinois Elder Abuse and Neglect Act
When is an Access Order Necessary?
a caregiver or third party has interfered with the
assessment or service plan, OR
the agency has reason to believe that the eligible adult
is denying access because of coercion, extortion, or
justifiable fear of future abuse, neglect, or financial
exploitation.
Freeze Orders
Who may Petition for Freeze Order?
Office of the Attorney General
Department on Aging
Provider Agency
Freeze Order
Requires:
Substantiated financial exploitation
Documented reasonable belief that the victim will
be irreparably harmed
Freeze Order
The Order shall:
“prohibit the sale, gifting, transfer, or wasting of the
assets owned by or vested in the victim without the
express permission of the court.”
Order of Protection
Domestic Violence Act
Order of Protection
A petition for an order of protection may be filed only:
(i) by a person who has been abused by a family or
household member or by any person on behalf of a
minor child or an adult who has been abused by a
family or household member and who, because of age,
health, disability, or inaccessibility, cannot file the
petition, or
(ii) (ii) by any person on behalf of a high-risk adult with
disabilities who has been abused, neglected, or
exploited by a family or household member.
Guardianships
Citations to Recover Assets
Probate Act
Standards of Capacity
In Illinois, a presumption exists that persons of a
mature age are sane and have the mental capacity
to contract.
As long as the party in question can understand the
nature of the transaction and protect his or her
interests, the court will find him or her mentally
competent and validate the transaction
Capacity to contract is the mental ability to
appreciate the nature of one's actions
Powers of Attorney are contracts
Standard of Incapacity for Guardianship
A court will appoint a guardian when:
1. A person is disabled due to mental deterioration, physical incapacity or development disability; and,
2. That person is totally incapable of making and/or communicating decisions regarding his personal or financial affairs due to his disability; and,
3. Guardianship is necessary to promote the well-being of the disabled person and/or to protect him from neglect, exploitation, or abuse
Guardianship Procedures
1. Filing Petition for Appointment of Guardian
2. Service of Summons
3. Appointment of Guardian ad Litem
4. Obtaining necessary Physician’s Report (In Cook
County, CCP 211)
5. Notice to spouse, children, siblings and agents
under power of attorney
Guardianship as a Remedy
Cooperation of treating physician
90 day requirement
Neuropsychological Testing
Executive Functioning and Judgment
Dementia
Mental Illness
Forensic Psychiatric Exam
Non-Family Guardians
Banks and other Professional Guardians
Office of State Guardian
Estates must be less than $25,000
Will not petition
Public Guardians
Estates must be $25,000 or greater
Cook County Public Guardian and most others will
petition
Uncontested Guardianship
Based upon the Report of the Guardian ad Litem
Must present Original Physician’s Report
Proposed Guardian must present Oath and Bond
Proposed Guardian should be present to present
Care Plan
Contested Guardianship
Based upon the Report of the Guardian ad Litem
(stating respondent objects and wants attorney)
OR based upon a Cross-Petition
Rules of Discovery apply (Interrogatories,
Depositions)
Parties may ask for mental exam of respondent
Respondent may ask for jury trial
Expensive; usually, if guardian appointed fees are
paid from Estate
Guardianship vs. Power of Attorney
A Guardian will not be appointed if valid power
of attorney is in place
Before a Guardian is appointed, agents under
power of attorney must resign or the court must
revoke the power of attorney
Proceeding to have power of attorney revoked is
subject to full discovery and trial, can be expensive
Guardian of the Estate: Powers and Duties
• the care, management and investment of the ward’s estate.
• disburse the ward’s funds
exercise any or all powers over the estate and business affairs of the ward that the ward could exercise if not under disability.
appear for and represent the ward in all legal proceedings.
engage in estate planning for the ward.
duty to carry out the ward’s wishes as best as they can be ascertained.
duty to file annual accountings of the estate with the court.
Guardian of the Estate: Powers and Duties
custody of the ward and the ward’s minor and adult dependent children.
authority to choose the ward’s placement and to place a ward in a residential facility with the court’s approval.
right to control who can and cannot visit the ward.
duty to make provisions for their support, care, comfort, health, education, maintenance and professional services.
all rights of a surrogate under the Health Care Surrogate Act to make decisions to forgo or withdraw life-sustaining treatment.
Guardianship v. Power of Attorney
Guardian of the Estate
finding of legal
incompetence
ward cannot enter into
contracts
guardian has all powers
under the statute
guardian must post a
surety bond
Power of Attorney for
Property
no finding of legal
incompetence
principal can still enter
into contracts
agent has only those
powers specified in the
document
agent is not insured
with a surety bond
Guardianship v. Power of Attorney
Guardian of the Estate
guardian is supervised by the court
guardian must file annual accountings with the court
ward cannot revoke the guardianship without
Power of Attorney for Property
agent is not supervised by a court
agent must keep records but does not need to submit an accounting to a court unless ordered to do so
principal can revoke the agency without the court finding him legally competent
Guardian of the Person: Powers and Duties
custody of the ward and the ward’s minor and adult dependent children.
authority to choose the ward’s placement and to place a ward in a residential facility with the court’s approval.
right to control who can and cannot visit the ward.
duty to make provisions for their support, care, comfort, health, education, maintenance and professional services.
all rights of a surrogate under the Health Care Surrogate Act to make decisions to forgo or withdraw life-sustaining treatment.
Guardianship v. Power of Attorney
Guardian of the Person
guardian can control
the ward’s placement
even over the ward’s
objection
guardian can control
who visits the ward
Power of Attorney for
Health Care
agent has no authority to
control the principal’s
placement over his
objection
agent cannot control who
visits the principal
Guardianship v. Power of Attorney
Guardian of the Person
• ward cannot file for
divorce
• guardian can keep
home care in the home
over the ward’s
objection
Power of Attorney for
Health Care
• principal can still file
for divorce
• principal cannot keep
home care in the home
over the principal’s
objection
Remedies in Guardianship
Emergency Temporary Guardian of the Estate
and/or Person
Plenary Guardian of the Estate and/or Person
All orders under the EANA
Access Order
Freeze Order
All orders under the POAA
Order for Accounting
Order Revoking the Agency
Remedies in Guardianship
All orders under the DVA
Order of Protection
Citation Actions to recover misappropriated funds
Incapacity
Undue Influence, Coercion or Duress
Breach of Fiduciary Duty
Fraud
Conversion
Undue Influence
Breach of Fiduciary Duty
Imposition of Constructive Trusts
Damages
Equitable Remedies
Punitive Damages
The Illinois Supreme Court held that punitive
damages are allowable where the wrong involves
some violation of a duty arising from the relationship
of trust and confidence.
The Appellate Court held that punitive damages are
appropriate to punish and deter conduct where the
defendant is guilty of an intentional breach of
fiduciary duty.
Treble Damages
A person who is charged by information or indictment with the
offense of financial exploitation of an elderly person or
person with a disability and who fails or refuses to return the
victim's property within 60 days following a written demand
from the victim or the victim's legal representative shall be
liable to the victim or to the estate of the victim in damages of
treble the amount of the value of the property obtained, plus
reasonable attorney fees and court costs. The burden of proof
that the defendant unlawfully obtained the victim's property
shall be by a preponderance of the evidence. This subsection
shall be operative whether or not the defendant has been
convicted of the offense.
DUTTON & CASEY, P.C. ADVOCATES FOR OLDER ADULTS,
PERSONS WITH A DISABILITY, AND THEIR FAMILIES.
www.duttoncaseylaw.com
Attorneys:
Janna Dutton, Kathryn C. Casey, Melissa Howitt, Lara A. Duda
Appointments Available In:
Arlington Heights, Chicago, Skokie, and Vernon Hills, Illinois
Phone: 312-899-0950 or 847-261-4706
Email: [email protected]
