Financial Exploitation of the Elderly and Disabled in Missouri

by Dan Conlisk

As Missouri’s population ages, financial abuse of the elderly and disabled has become an increasing concern. While such abuse may occur in any number of circumstances, perhaps the most troubling involve abusers in whom elderly or disabled victims have placed trust and confidence. These include formal relationships like those of trustees, individuals with powers of attorney, guardians, conservators, investment advisors and the like. Other common arrangements, such as joint checking, savings or securities accounts, also provide substantial opportunities for abuse. Worse yet, financial abuse may arise where there is no formal relationship at all – the abuser may simply be a trusted family member or friend who has influence over the victim’s decision-making and/or assets.

While the methods used to exploit the elderly and disabled are limited only by the abuser’s imagination, several are common. Abusers may rely upon their control over the victim’s finances to pursue abusive tactics with immediate rewards. These include making disbursements from bank and securities accounts to themselves; using the victims assets to purchase goods and services for themselves; making extravagant gifts to themselves or their family members; charging excessive trustee’s fees against a trust estate or collecting excessive compensation for other services; taking loans from victims; and otherwise using victim’s assets as if they were the abuser’s own. Such abusers may also use access to personal and financial information to steal their victim’s identity to secure loans and open credit card accounts.

Similarly, unscrupulous investment professionals may abuse their trusted relationships with the elderly and disabled to direct them to investments charging excessive fees or may engage in unnecessary trading to generate commissions. Unscrupulous insurance salesman may place their victims in inappropriate insurance policies, such as expensive long-term annuity policies for extremely elderly individuals.

Abusers may also take a longer-term view, using their influence and control over elderly and disabled victims, for example, to effect changes to estate planning documents for their own benefit; to secure joint account holder/survivorship rights in checking, savings and securities accounts; and to be added to real estate deeds with survivorship rights.

Not surprisingly, under Missouri law, financial abuse of the elderly and disabled is illegal. Under Missouri Revised Statute § 570.145.1, an abuser commits the offense of financial exploitation of the elderly or disabled if he/she “knowingly by deception, intimidation, undue influence, or force obtains control over [the victim’s] property with the intent to permanently deprive the [victim] of the use, benefit or possession of his or her property thereby benefitting [the abuser] or detrimentally affecting the [victim].” Depending on the value of the property involved, the crime may be classified from a misdemeanor to a class A felony.

In addition, Missouri recently enacted the “Senior Savings Protection Act,” Mo. Rev. Stat. §409.600 et seq. (the “SSPA” or the “Act”). The SSPA is designed to combat financial abuse where the abuser attempts to secure a distribution from the victim’s securities account. The Act enables broker-dealers to refuse to execute certain disbursement transactions where the broker-dealer reasonably believes that financial exploitation of an elderly or disabled person has occurred, has been attempted, or is being attempted. Id. at §409.615. It also allows the broker-dealer to notify the Missouri Department of Health and Senior Services and the Missouri Commissioner of Securities in such circumstances. Id. at §409.610. Once it has notified these governmental agencies, the broker-dealer may then notify an immediate family member, legal guardian, conservator, trustee, co-trustee, successor trustee, or agent under a power of attorney. Id. In addition, the SSPA provides broker-dealers with immunity from civil liability for making such reports and delaying such transactions. Id. at §409.620. Working in tandem with Missouri’s criminal laws, the SSPA promises to provide additional protection for the elderly and disabled in their financial dealings.

But neither Missouri’s criminal laws nor the SSPA provide a remedy to elderly or disabled victims of financial exploitation. Each of the examples set forth above, as do the vast majority of financial exploitation circumstances, present strong legal claims that may serve as the basis for a lawsuit against the abuser. The same relationships of trust and confidence that provide the opportunity for abusers to exploit their victims also impose very strict fiduciary duties upon the abuser and in favor of the victim.

A fiduciary must act with the utmost good faith, loyalty, candor and prudence. He cannot take his beneficiary’s money or property. He cannot make loans to himself from the beneficiary’s assets. He cannot secure loans and credit cards with the beneficiary’s personal and financial information. He cannot cause changes to be made in his beneficiary’s estate plan for his benefit. Similarly, fiduciary financial and insurance professionals must select investments and make recommendations that are prudent and solely in the beneficiary’s interest. They cannot do so based upon commissions and fees they receive.

Further, and of equal importance, fiduciaries must be open and honest in everything they do. Secret transactions and undisclosed dealings with their beneficiaries’ assets are not only strictly prohibited, but are also a strong indicator of a fiduciary breach.

Violations of these strict fiduciary principles subject the fiduciary/abuser to civil liability and damages. Simply stated, while the SSPA and Missouri’s criminal law strive to avoid and punish financial exploitation of the elderly and disabled, they do not provide compensation for the harm caused. Civil lawsuits against the abusers do. As in all fiduciary litigation, such cases are complicated, often document-intensive, and require experienced and competent counsel.

Dan Conlisk has experience prosecuting breach of fiduciary duty cases and other complex litigation matters.