Question: My sister was exploited by her “advisors.” Sis lived alone but was always surrounded by people who she trusted and, apparently, paid them a great deal of money. She also gave these people huge “gifts.” She had employees and advisors that took advantage of her for decades!
This all came out after she died and we are now in court trying to get justice for her. She was very independent and private about her finances but was clearly being taken advantage of at every turn. We are just sick about this and wonder what we could have done to keep this from happening.
Answer: The courts have filings every week for cases just like your sister’s and, unfortunately, we will never be able to keep bad people from exploiting others. Your question itself identifies the crux of the problem: How can we keep loved ones safe and still respect their independence and privacy?
First, we should acknowledge that seniors are not the only vulnerable victims of those who seek to take advantage. Many “younger” folks are easily taken advantage of by others who “borrow” money or share sad personal stories in efforts to extract funds. As in your case, friends and
family may never know that a loved one is being taken advantage of until it is too late. While it is never right that someone be taken advantage of, we assume capable people are making wise decisions about their finances. This is wrong in far too many cases.
For instance, California law recognizes that spouses owe a fiduciary duty to each other. What does this mean? If you are married, you have the moral, ethical and legal obligation to act in good faith toward your spouse and not take unfair advantage. A spouse must be transparent in
decisions affecting community property, they must avoid mismanagement or loss of community property and they are obligated to share information about personal assets and debts. The law recognizes that when we marry, we place trust in that person and assume they will act in our best interests. Unfortunately, history has shown that spouses placed in this position of trust do not always act in the best interests of their “loved one” so laws were enacted to discipline spouses who fail to uphold their fiduciary duties.
Similarly, a woman living on her own, like your sister, most likely formed trusting relationships with her employees and advisors. In particular, her advisors carried extra weight and influence due to their positions of power. Courts recognize the immense power an advisor can carry and will often impose treble damage awards against such advisors if they are found guilty of wrongdoing.
You suffer under the assumption that you could have done something to protect your sister.
Unfortunately, while she may have recognized she was being taken advantage of, she may have felt that by reporting it, the outcome might lead to the loss of her relationships. This is why many instances of abuse go unreported, undetected and unchallenged. The victim feels the threat of action could be worse than the original form of abuse. Your sister may have been needy of the relationships and felt that by stopping payments, the relationships would go away.
The only thing we may do differently when it comes to protecting our loved ones is to stay close, be nonjudgmental and keep an open dialogue about how we can help if needed.
Liza Horvath has over 30 years’ experience in the estate planning and trust fields and is a Licensed Professional Fiduciary. Liza currently serves as president of Monterey Trust Management. This is not intended to be legal or tax advice. If you have a question, call (831) 646-5262 or email firstname.lastname@example.org