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: contact@duttonelderlaw.com