Jim Flynn: Help for seniors in danger of exploitation

Jim Flynn

Although senior citizen status has its advantages ($1 fishing licenses, for example), most people would agree they are outweighed by the disadvantages.

One disadvantage is susceptibility to financial exploitation. A case recently decided by the Colorado Court of Appeals reminds us that elder financial exploitation is on the rise, in part, because of a growing elderly population.

In the Court of Appeals case, Angela Dominguez, a caregiver for an elderly man, Arlen Owens, managed to get herself named as the pay-on-death beneficiary on three of Arlen's bank accounts that totaled more than $100,000.

After Arlen's death, these pay-on-death designations were challenged by Arlen's brother and, after a trial, a judge ruled that Dominguez indeed used "undue influence" to add herself to these accounts. The judge ordered the funds be returned to Arlen's estate, and he tried to keep the horse in the barn with a legal device called a constructive trust - essentially, the court taking control of the accounts.
But this was apparently too little, too late, and Dominguez pocketed the money. When she couldn't - or wouldn't - return the money, the judge slapped her with a contempt citation and sentenced her to six months in jail.

"Undue influence," as you might expect, is a squishy legal concept. Under the Colorado Criminal Code, at least, it's defined as "the use of influence to take advantage of an at-risk person's vulnerable state of mind, neediness, pain or emotional distress." Undue influence along with incapacity are the two main tools in the toolbox of someone wanting to challenge a will.

Per the Court of Appeals decision in the Owens case, these same tools are available to challenge nonprobate transfers.

There are lots of these around, in addition to pay-on-death designations on bank and brokerage accounts. Included are beneficiary designations on life insurance policies and retirement accounts; beneficiary deeds, which allow for the nonprobate transfer at death of real property; and, newest on the list, a nonprobate transfer on death procedure for motor vehicles.

Although Dominguez's jail sentence came out of a contempt citation in a civil probate case, elder financial exploitation - and other kinds of abuse of at-risk individuals - is a crime. In fact, an entire article in the Colorado Criminal Code deals, in great detail, with crimes against individuals who are vulnerable to exploitation and abuse because of age, mental or physical impairments, or both. This portion of the Criminal Code begins with a legislative declaration that penalties for crimes against at-risk persons should be more severe than crimes against the rest of society.

In addition to bulking up the Criminal Code to deal with the exploitation and abuse of at-risk individuals, the Colorado General Assembly also has imposed a mandatory reporting obligation on people involved in health care, law enforcement, fire protection, social work, banking, government services and just about everyone else who comes in contact with elders.

If someone covered by this obligation observes exploitation of an at-risk elder, or has reasonable cause to believe an at-risk elder has been exploited or is at risk of being exploited, the matter must be reported to a law enforcement agency within 24 hours. For purposes of this reporting requirement, an at-risk elder is anyone 70 or older, regardless of physical or mental condition.

A willful failure to report is a Class 3 misdemeanor. Once a report is filed, law enforcement and county social services agencies are supposed to go into action to investigate and protect the victim.

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Jim Flynn: Help for seniors in danger of exploitation