Elder Financial Abuse

[4relvr]

What is the name of your state (only U.S. law)? California

My question to the experts: Is the following considered elder financial abuse?

My brother-in-law (my wife's brother) and his wife bought an older home in 2009. They paid 475K for a house worth around 350K. Because of the location, they had to have it. Because they paid 125K more than the bank was willing to loan on the home, thet needed 125K to complete the deal. My wife recently found out that her 86 year old mother gave them 120K to complete the deal on the house.

Just out of curiosity, my wife decided to take a closer look at her mothers finances. What she discovered is that her mother had opened up a 250K equity line of credit in 2004 against her already paid for home (worth approx 500K).
Since doing so has accumulated 185K worth of debt on her line of credit. What she also uncovered is that her mother had loaned her son and his friend 28K for a new boat, 10K for her son's wife's new (new to her) car, and a personal loan of 3K to her daughter-in-law. Plus other money given to them which totals around 175K.

There were promissory notes written up for the boat, car, and one 3K personal loan. All three notes haven't been paid in full yet and payments from her son and his wife haven't been made since May of 2010.

There wasn't any notes written up for the 120K, but my mother-in-law is getting altsheimzers and dimentia and don't think she knows what she is doing, especially back in 2009 when writing a check for 120K to her son. Over the years she has loaned her son thousands of dollars to buy cars, boats, and other misc things. Because she had worked at BofA for 40 years, she was fimiliar with financial matters and on each occasion had always had a promissory note written up when loaning her son any amount of money. She is now making monthly payments to the bank for around $800 to pay off the line of credit, aquired mostly from loaning or giving money to her son.

Why I think this is abuse of an elder is that this time, while giving them the 120K to buy the home, she didn't have any recourse to recoup the funds in case her son's wife decided to leave her son, or for any other reason.

If my mother-in-law passed away tomorrow, my wife would be responsible for half of the 185K now owed by her mother to the bank. Obviously she if furious and wants an amendment added to the living trust her mother had previously hdrawn up.

If this in not financial abuse in the legal sense, then what can be done (legally) to make this fair to my wife and her mother?What is the name of your state (only U.S. law)?

 

[CSO286]

What is the name of your state (only U.S. law)? California

My question to the experts: Is the following considered elder financial abuse?

My brother-in-law (my wife's brother) and his wife bought an older home in 2009. They paid 475K for a house worth around 350K. Because of the location, they had to have it. Because they paid 125K more than the bank was willing to loan on the home, thet needed 125K to complete the deal. My wife recently found out that her 86 year old mother gave them 120K to complete the deal on the house.

Just out of curiosity, my wife decided to take a closer look at her mothers finances. What she discovered is that her mother had opened up a 250K equity line of credit in 2004 against her already paid for home (worth approx 500K).
Since doing so has accumulated 185K worth of debt on her line of credit. What she also uncovered is that her mother had loaned her son and his friend 28K for a new boat, 10K for her son's wife's new (new to her) car, and a personal loan of 3K to her daughter-in-law. Plus other money given to them which totals around 175K.

There were promissory notes written up for the boat, car, and one 3K personal loan. All three notes haven't been paid in full yet and payments from her son and his wife haven't been made since May of 2010.

There wasn't any notes written up for the 120K, but my mother-in-law is getting altsheimzers and dimentia and don't think she knows what she is doing, especially back in 2009 when writing a check for 120K to her son. Over the years she has loaned her son thousands of dollars to buy cars, boats, and other misc things. Because she had worked at BofA for 40 years, she was fimiliar with financial matters and on each occasion had always had a promissory note written up when loaning her son any amount of money. She is now making monthly payments to the bank for around $800 to pay off the line of credit, aquired mostly from loaning or giving money to her son.

Why I think this is abuse of an elder is that this time, while giving them the 120K to buy the home, she didn't have any recourse to recoup the funds in case her son's wife decided to leave her son, or for any other reason.

If my mother-in-law passed away tomorrow, my wife would be responsible for half of the 185K now owed by her mother to the bank. Obviously she if furious and wants an amendment added to the living trust her mother had previously hdrawn up.

If this in not financial abuse in the legal sense, then what can be done (legally) to make this fair to my wife and her mother?What is the name of your state (only U.S. law)?

Why would your wife be responsible? Did she co-sign the note?


If you suspect that MIL is a vulnerable adult, contact social serivces for assistance. They will investigate and if need be work with the family to appoint a fiscal case manager for MIL.

 

[anteater]

Seems a pretty thin case.

But just my opinion.

 

[Antigone*]

Why would your wife be responsible? Did she co-sign the note?


If you suspect that MIL is a vulnerable adult, contact social serivces for assistance. They will investigate and if need be work with the family to appoint a fiscal case manager for MIL.

While I understand that it may be easy to financially abuse an older family member, that family member can also do what they please with the assets they possess.

What does mom say about her financial position?

 

[CSO286]

While I understand that it may be easy to financially abuse an older family member, that family member can also do what they please with the assets they possess.

What does mom say about her financial position?

That's true , too....

And it could just be that Mom is a soft touch. and wants to be this generous.

But if OP really believes that she's being victimized/exploited, then a call to Adult services may be warranted.

 

[commentator]

She should talk to her brother. Should point out to him that using Mom's assets to buy himself nice presents is "elder fiancial abuse" that is prosecutable, even if pitiful little old Mom agrees to "i wanted Sonny to have this from my estate" The dumbest and lowest class individuals in the trailer parks of the world have figured out that they can keep Momma and exploit her, and therefore the court system is very strict with them about all this sort of activity. The sister should threaten, and be willing to follow through with talking to the court system about his possible financial abuse of Mom. Does he have power of attorney for her, or is he bringing stuff to her for her to sign. If so, the daughter may need to be willing to take over her mother's financial affairs, or have an advocate appointed by the court to do so.

"If my mother-in-law passed away tomorrow, my wife would be responsible for half of the 185K now owed by her mother to the bank. Obviously she if furious and wants an amendment added to the living trust her mother had previously hdrawn up." This is not necessarily true.

 

[anteater]

Should point out to him that using Mom's assets to buy himself nice presents is "elder fiancial abuse" that is prosecutable, even if pitiful little old Mom agrees to "i wanted Sonny to have this from my estate" The dumbest and lowest class individuals in the trailer parks of the world have figured out that they can keep Momma and exploit her, and therefore the court system is very strict with them about all this sort of activity. The sister should threaten, and be willing to follow through with talking to the court system about his possible financial abuse of Mom.

The OP provides no indication that abuse has occurred.

When he does, I will agree with you.

 

[4relvr]

Why would your wife be responsible? Did she co-sign the note?


If you suspect that MIL is a vulnerable adult, contact social serivces for assistance. They will investigate and if need be work with the family to appoint a fiscal case manager for MIL.

My wife didn't sign the note but that doesn't matter does it?
My understanding is that the equity line is based on the equity in her house so the line of credit is using the house as collateral. I also thought that if/when she dies the bank will want to get their money back so, my wife and her brother can either continue paying the bank every month, let the bank foreclose on the house or they can try and sell it to pay off the bank. Am I correct here?

Having to sell it to pay off the equity line is scary in this RE market.

 

[4relvr]

While I understand that it may be easy to financially abuse an older family member, that family member can also do what they please with the assets they possess.

What does mom say about her financial position?

I understand what you are saying and I was telling my wife the same things you are saying. But what is different here is that her brother and his wife knows damn well his mother is losing it upstairs and is exploiting her for their personal gain.

He also knows that every time he went to his mother for money, she always had a promissory note drawn up for him to sign and kept a log of the payments to her. But not this time and for the most money he's ever received from her.

Her mother doesn't comprehend the magnitude of this huge money givaway. My wife has asked her brother what happens if their mom needs that money to help pay for her future care? He thinks all she will need is food or some stupid reply like that. He is not aware of the financial burden elder carer can put on a family. Or that the money he got from his mother, she's paying back to the bank in monthly payments of over $800+/month, coming from her retirement fund!

 

[4relvr]

She should talk to her brother. Should point out to him that using Mom's assets to buy himself nice presents is "elder fiancial abuse" that is prosecutable, even if pitiful little old Mom agrees to "i wanted Sonny to have this from my estate" The dumbest and lowest class individuals in the trailer parks of the world have figured out that they can keep Momma and exploit her, and therefore the court system is very strict with them about all this sort of activity. The sister should threaten, and be willing to follow through with talking to the court system about his possible financial abuse of Mom. Does he have power of attorney for her, or is he bringing stuff to her for her to sign. If so, the daughter may need to be willing to take over her mother's financial affairs, or have an advocate appointed by the court to do so.

"If my mother-in-law passed away tomorrow, my wife would be responsible for half of the 185K now owed by her mother to the bank. Obviously she if furious and wants an amendment added to the living trust her mother had previously hdrawn up." This is not necessarily true.

In the trust it states that both siblings will have the power of attorney when/if need be granted.

You are absolutely right about trailer trash. My sister-in-law (wife's brothers wife) is the poster child for trailer trash but unfortunately, has secured the trust of my MIL. So now the MIL thinks this woman is her saviour. But she is tapping this poor woman for nickel and dime things and some not so nickel and dime things.

 

[4relvr]

The OP provides no indication that abuse has occurred.

When he does, I will agree with you.

That is why I'm asking the question here. Is there abuse or not?

Never said it necessarily was abuse just wanting to know the legal parameters for elder finasncial abuse.

 

[anteater]

That is why I'm asking the question here. Is there abuse or not?

Never said it necessarily was abuse just wanting to know the legal parameters for elder finasncial abuse.

As for my opinion...

1) You raise a competency question by stating "...my mother-in-law is getting altsheimzers and dimentia and don't think she knows what she is doing..." That is rather vague. And then you are trying to infer that it is relevant to an action that occurred two years ago. That's a tough argument.

2) But then you have to get into the actual circumstances of the $120,000 transaction. Did brother exercise coercion or exert undue influence? Or, as CSO286 put it, is Mom just a soft touch and decided that she can't take it with her? It is difficult to say from afar. What would Mom tell a disinterested party?

You can find a lot of material by doing a search with terms like: California financial elder abuse

As for the statutory references:

15610.30. (a) "Financial abuse" of an elder or dependent adult
occurs when a person or entity does any of the following:
(1) Takes, secretes, appropriates, obtains, or retains real or
personal property of an elder or dependent adult for a wrongful use
or with intent to defraud, or both.
(2) Assists in taking, secreting, appropriating, obtaining, or
retaining real or personal property of an elder or dependent adult
for a wrongful use or with intent to defraud, or both.
(3) Takes, secretes, appropriates, obtains, or retains, or assists
in taking, secreting, appropriating, obtaining, or retaining, real
or personal property of an elder or dependent adult by undue
influence, as defined in Section 1575 of the Civil Code.

(b) A person or entity shall be deemed to have taken, secreted,
appropriated, obtained, or retained property for a wrongful use if,
among other things, the person or entity takes, secretes,
appropriates, obtains, or retains the property and the person or
entity knew or should have known that this conduct is likely to be
harmful to the elder or dependent adult.

(c) For purposes of this section, a person or entity takes,
secretes, appropriates, obtains, or retains real or personal property
when an elder or dependent adult is deprived of any property right,
including by means of an agreement, donative transfer, or
testamentary bequest, regardless of whether the property is held
directly or by a representative of an elder or dependent adult.

(d) For purposes of this section, "representative" means a person
or entity that is either of the following:
(1) A conservator, trustee, or other representative of the estate
of an elder or dependent adult.
(2) An attorney-in-fact of an elder or dependent adult who acts
within the authority of the power of attorney.

California Civil Code Section 1575
Undue influence consists:
1. In the use, by one in whom a confidence is reposed by another,
or who holds a real or apparent authority over him, of such
confidence or authority for the purpose of obtaining an unfair
advantage over him;
2. In taking an unfair advantage of another's weakness of mind;
or,
3. In taking a grossly oppressive and unfair advantage of another's necessities or distress.

 

[4relvr]

As for my opinion...

1) You raise a competency question by stating "...my mother-in-law is getting altsheimzers and dimentia and don't think she knows what she is doing..." That is rather vague. And then you are trying to infer that it is relevant to an action that occurred two years ago. That's a tough argument.

2) But then you have to get into the actual circumstances of the $120,000 transaction. Did brother exercise exert coercion or undue influence? Or, as CSO286 put it, is Mom just a soft touch and decided that she can't take it with her? It is difficult to say from afar. What would Mom tell a disinterested party?

You can find a lot of material by doing a search with terms like: California financial elder abuse

As for the statutory references:

Thank you anteater for your replies.

Two years ago signs of incompetency were apparent but my wife wasn't too alarmed at that time because nothing seemed out of the ordinary. But after finding out what her mother, brother, and his wife had done, thinks she was definitely losing it back then.

There is really no way to prove that she wasn't thinking clearly at the time she gave them 120K except that it wasn't her normal way of doing things.

I noticed in the statute 15610.30. (b) it states that if an entity knew or should have known that this conduct is likely to be harmful to the elder
then it's an unlawful act. Her brother knew the money was coming from an equity account and that his mother would have to pay it back along with interest.

If not illegal then highly immoral. If his mother someday needs the extra money for her care, is there any way to make him return the 120K or to pay it off himself?

 

[anteater]

If not illegal then highly immoral.

I don't know that I would put it in moral/immoral terms. But Brother Billy Bob certainly does seem to be lacking in integrity.

If his mother someday needs the extra money for her care, is there any way to make him return the 120K or to pay it off himself?

Well, Mom, or her representative if she is no longer competent, and Brother Billy Bob could end up in a court room arguing before a judge and/or jury whether it was a loan or a gift.

Your wife seems to be ready to charge ahead with both barrels loaded. And commentator was advocating the nuclear option from the get-go. And, if I sensed less ambiguity in the situation, I would probably agree. Those exploiting the elderly, including family, should be shown no quarter.

This is just my opinion, for what it is worth. I think your wife should stow the shotgun in the trunk for now and have separate conversations with brother and Mom in as dispassionate a manner as she can manage. Just try to find out what each has to say about the transaction. Try to avoid using terms like "abuse," "swine," "rotten b*****d." Going in with guns blazing is likely to harden everybody's positions, leaving her options as accepting the situation and carrying a great, big grievance or going nuclear.

Then she can decide what course she wants to take.

 

[commentator]

My position is based on personal experience. Some otherwise well educated, professional and supposedly intelligent siblings we have will not understand that their behavior toward a parent is inappropriate. What I suggest is that this sister bring this topic up with her brother as an educational experience for him. This may quite well be enough to rein him in.

I quite certainly agree that she should not go in with shotguns blazing making empty threats. But she must make it clear to her brother that "business as usual," when Mother is growing older and showing signs of dementia are not going to continue. Even if Mother, in the past has enabled and been very generous with her money to the son and daughter-in-law, she is reaching that age where anything that smells of financial abuse would be suspect. And it sounds as though this mother, heretofore has always been rather careful and conservative about her money management. So they could really be working themselves into a position where they are going to look very guilty IF it were to come to that. Sometimes just the threat is sufficient.

If your mother actually runs into the situation where she needs money for her care, such as a nursing home stay, and the money is no longer in her accounts to be used, so that she has to be certified for public assistance such as Medicaid (not Medicare), they will look back at what has happened to her finances for the past five years and sometimes even longer in some situations. They will not give her the approval if her estate has consciously been depleted. Then the family will have to pay for care if she receives it.

In my personal situation, I assured my family members in a non threatening and reasonable way that before I paid any money to care for my mother, who should reasonably have had the money to pay for herself, having been a prudent and conscientious money manager all her life, I would spend my money to hire attorneys to prosecute this person and his wife and make sure they paid, using that money he had bilked from her. The threat was sufficient to cause them to re-think some of their actions, though they had already gotten a good deal of money that was never recouped because of her senior years generosity.

It was never actually necessary to sign her up for Medicaid, and we never actually had to come up with money for her care, but elder care is such an uncertain and indefinite area that you never can predict what may happen.