Possible Elder Abuse Associated with Conversion of Trust Assets

[Nugget2179]

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

Approximately 2 years ago my husband's mother died. She had a trust; however, 2 months before she died she signed several quitclaim deeds on two properties to transfer them to a trust that her eldest son controls. When she signed the quitclaim deeds she had dementia, so it's doubtful that she understood what she was doing. Even more interesting is that they were signed over a two week period - one at a time on different days. All of this of course was discovered in public records.

The eldest son has not communicated with any of the beneficiaries as to the distribution of the estate. But from what I understand he is not required to as he is the trustor of the trust that the assets were tranferred to. I also understand that he has the ability to change anything in the trust - even the beneficiaries.

Here's my question. Why would an attorney create a trust for someone and then have all their assets transfered to another trust right before they died?

My husband is extremely upset about all of this. He doubts that he will ever see any of the inheritance that his mother told him he would receive. The eldest son and him do not get along so we are wondering if we should take any action regarding this. I work for a financial institution and we are mandatory reporters for financial elder abuse. In my eyes this fits the definition of elder abuse. As I stated, my husband's mother was not in her right mind when she signed all of the quitclaim deeds. This would be very easy to prove using her medical records. But then I don't understand why the attorney that created the trust would allow his notary to notarize all the documents. Furthermore, it should have been obvious to the notary that she was not able to understand what she was doing.

Any advice is appreciated!

 

[ecmst12]

A deceased person is not being abused so there is nothing to report.

 

[Proserpina]

That's true, but the OP's husband is still within the SOL to contest the quit-claim (it's 5 years in CA).

He truly needs an attorney though.

(For what it's worth, the notary isn't there to confirm the legalities or to diagnose anyone - they're simply verifying the signatures on the document)

 

[Nugget2179]

She wasn't dead when the funds were transferred. Even though she isn't around it doesn't change the fact that she had dementia and this all happened.

There is no husband so I assume you mean her son can contest the quitclaim deeds.

 

[Nugget2179]

I was a notary once. I certainly would not notarize a document for someone that didn't appear all together. She was in a dementia section of assisted living. So who would be responsible for that?

 

[Proserpina]

I was a notary once. I certainly would not notarize a document for someone that didn't appear all together. She was in a dementia section of assisted living. So who would be responsible for that?

Are you qualified to make that determination? Can you distinguish between "scatter brained", "a bit weird", "unconventional"...from mental illness?

And I meant her son - you know, the one you call " my husband" in your original post.

 

[curb1]

OP said, "I also understand that he has the ability to change anything in the trust - even the beneficiaries."

Who told you that? What is the name of "the new trust"? Was it the mother's trust?

 

[ecmst12]

I didn't say the trust couldn't be challenged, just that elder protective services will not be involved and this is not a "mandatory reporting" situation.

 

[anteater]

What is the name of your state (only U.S. law)?
Here's my question. Why would an attorney create a trust for someone and then have all their assets transfered to another trust right before they died?

Asssuning that this isn't a rhetorical question... It isn't a very productive question. It was done. The question is if your husband is going to retain an attorney and do something about it.

 

[joeklick]

You may want to contact an probate litigation attorney in the county where his mother died. Sounds like a you may be able to try and appoint yourself as an Executor in probate court if no probate documentation exists. If you are appointed an Executor you will have access to any information. If your sibling embezzled any money they will probably try to prevent this and appoint themselves. Make sure you submit a motion to the court should your sibling is stalling in producing the accounting and inventory.

Just to let you know, there are at least three ways I know of embezzling money.
- The sibling could have changed the beneficiary's before this person died. I was able to change my IRA online.
- The sibling could have forged your signature on a beneficiary disclaimer and removed you as a beneficiary after the person's death.
- The sibling could have transferred any funds using a Medallion Signature Guarantee.
- The sibling could have used any inheritance tax release to transfer funds, if CA has these I couldn't say.

 

[TrustUser]

i disagree with the statement about the notary having no responsibility.

it is indeed part of the notary's responsibility to notarize a signature based upon the mental state of the person.

if a person is obviously not "with it", the notary is not supposed to notarize the signature.

 

[TrustUser]

here is a website that talks about a standard code for notaries, and where that code can be downloaded.

http://www.nationalnotary.org/reference_material_and_publications/code_of_responsibilty/index.html

there are 10 guiding general principles

here is number 3

The Notary shall require the presence of each signer and oath-taker in order to carefully screen each for identity and willingness, and to observe that each appears aware of the significance of the transaction requiring a notarial act.

i dont think there is any way to take that other than that the notary has some degree of responsibility that the signer is willing, and can demonstrate that he/she knows what he/she is signing.

there are some gray areas, but someone suffering from a fair amount of dementia is not a gray area. in many cases, it is obvious enough that the notary should refuse to notarize.

 

[CdwJava]

However, the principles of an organization are not necessarily binding on a Notary outside of the organization. While this is a lofty aspiration, CA law does not appear to place such a specific burden (regarding mental state) on Notaries. (Though I might have missed it ...)

http://www.sos.ca.gov/business/notary/forms/notary-handbook-2013.pdf

And it is always possible that the person had a lucid moment.

These matters are notoriously difficult to prosecute in a criminal court. They require an audit of the paper trail (the easy part) and then a retroactive determination as to whether there was an intent to defraud or steal the money or other assets. With the original party deceased it can become much more difficult as it might rely on a lot of anecdotal testimony with a smattering of medical experts. More often than not these are matters to be handled in a civil court and, ultimately, resolved through mediation.

Nugget2179, your husband needs to consult an attorney ASAP.

 

[Proserpina]

here is a website that talks about a standard code for notaries, and where that code can be downloaded.

http://www.nationalnotary.org/reference_material_and_publications/code_of_responsibilty/index.html

there are 10 guiding general principles

here is number 3

The Notary shall require the presence of each signer and oath-taker in order to carefully screen each for identity and willingness, and to observe that each appears aware of the significance of the transaction requiring a notarial act.

i dont think there is any way to take that other than that the notary has some degree of responsibility that the signer is willing, and can demonstrate that he/she knows what he/she is signing.

there are some gray areas, but someone suffering from a fair amount of dementia is not a gray area. in many cases, it is obvious enough that the notary should refuse to notarize.

Given the fact that early dementia - and yes, even later stages - can often be indistinguishable from an average oddball who's clumsy and forgetful , or even with a dementia patient who does have lucid moments, how is the notary going to tell the difference?

 

[TrustUser]

i am not trying to prosecute the notary.

just saying that he does have a responsibility to do his best to determine if said person really knows what he is doing.

a good rule of thumb - if notary has doubts, dont notarize.

few people are "awkward enough" to make one think that he is demented.