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THE ONE-TWO PUNCH: THE SILVER TSUNAMI AND FINANCIAL EXPLOITATION WILL NEW HAMPSHIRE BE KNOCKED-OUT?

Stephen G. Baker 8/8/2012

A 20 state comparison of laws governing financial exploitation of vulnerable adults and what New Hampshire can do to confront the epidemic.

Table of Contents
THE ONE-TWO PUNCH: THE SILVER TSUNAMI AND FINANCIAL EXPLOITATION; WILL NEW HAMPSHIRE BE KNOCKED-OUT? .......................................................................................................................4 PURPOSE ....................................................................................................................................................................4 BACKGROUND ...........................................................................................................................................................4 METHODOLOGY .........................................................................................................................................................5 STRUCTURE ............................................................................................................................................................... 5 SECTION I THE FINANCIAL EXPLOITATION EPIDEMIC..........................................................................6 A CASE STUDY ..........................................................................................................................................................6 THE NEW EPIDEMIC ...................................................................................................................................................7 VULNERABLE ADULT EXPLAINED ............................................................................................................................. 8 FINANCIAL EXPLOITATION DEFINED .........................................................................................................................8 Undue Influence ...................................................................................................................................................8 Abuse of Durable Powers of Attorney ..................................................................................................................9 SECTION II A 20 STATE COMPARISON ......................................................................................................... 10 WHAT IS BEING DONE? ........................................................................................................................................... 10 CIVIL LAW APPROACHES ......................................................................................................................................... 10 Breach of Fiduciary Duty................................................................................................................................... 10 Conversion ......................................................................................................................................................... 11 Civil Actions Are Not Solutions .......................................................................................................................... 11 CRIMINAL STATUTES ............................................................................................................................................... 12 Theft ................................................................................................................................................................... 12 Fraud.................................................................................................................................................................. 12 ELDERLY, INCAPACITATED, OR DISABLED STATUTES ............................................................................................. 12 FINANCIAL EXPLOITATION STATUTES ..................................................................................................................... 13 Elder Statutes ................................................................................................................................................. 13 Effects of Aging Statutes..................................................................................................................................... 14 True Vulnerable Adult Statutes .......................................................................................................................... 15 PENALTIES ............................................................................................................................................................... 15 Civil Penalties .................................................................................................................................................... 15 Standard Criminal Penalties .............................................................................................................................. 16 Enhanced Penalties ............................................................................................................................................ 16 Fines and Incarceration ..................................................................................................................................... 17 COMBINATION STATUTES ........................................................................................................................................ 17 PROSECUTION CHALLENGES .................................................................................................................................... 18 Reporting............................................................................................................................................................ 18 Actual Prosecution ............................................................................................................................................. 18 SECTION III A MULTIDISCIPLINARY APPROACH .................................................................................... 19 THE MULTIAGENCY COLLABORATIVE RESPONSE.................................................................................................... 19 DEPARTMENT OF JUSTICE RECOMMENDATIONS ...................................................................................................... 19 FIDUCIARY ABUSE SPECIALTY TEAMS .................................................................................................................... 19 What Are They? .................................................................................................................................................. 19 Why Are They Needed? ...................................................................................................................................... 20 SECTION IV PREVENTATIVE MEASURES ................................................................................................... 21 EDUCATION ............................................................................................................................................................. 21 Daily Money Management (DMM) Programs ................................................................................................... 21 Attorney Services................................................................................................................................................ 22 ASSESSING POWER OF ATTORNEY STATUTES .......................................................................................................... 22 Registration ........................................................................................................................................................ 23 Witnesses ............................................................................................................................................................ 23

Notifications ....................................................................................................................................................... 23 SCREENING CAREGIVERS ......................................................................................................................................... 24 TRAINING POLICE AND PROFESSIONALS .................................................................................................................. 24 SECTION V NEW HAMPSHIRES STATUS .................................................................................................... 25 FINANCIAL EXPLOITATION IN NEW HAMPSHIRE ...................................................................................................... 25 NEW HAMPSHIRES LAWS FOR ADDRESSING FINANCIAL EXPLOITATION ................................................................ 26 Incapacitated Adult ............................................................................................................................................ 26 Financial Exploitation Defined .......................................................................................................................... 26 Powers of Attorney Statute ................................................................................................................................. 27 PREVENTATIVE MEASURES IN NEW HAMPSHIRE ..................................................................................................... 28 Merrimack County Community Coordinated Response Team (MCCRT) .......................................................... 28 Daily Money Management Programs ................................................................................................................ 29 Mandatory Reporting, Registration, and Investigations .................................................................................... 29 SECTION VI RECOMMENDATIONS .............................................................................................................. 30 VULNERABLE ADULT DEFINITION ........................................................................................................................... 30 FINANCIAL EXPLOITATION STATUTE ....................................................................................................................... 30 FINANCIAL EXPLOITATION STATUTE EXPLAINED .................................................................................................... 32 Section I- Definition ........................................................................................................................................... 32 Section II- Sentencing ........................................................................................................................................ 32 Section III- Civil Penalties ................................................................................................................................. 33 Section IV- Restitution........................................................................................................................................ 33 DEDICATED BUDGETS FOR FAST TRAININGS .......................................................................................................... 33 IMPLEMENTATION OF UNDUE INFLUENCE WORKSHEETS ......................................................................................... 34 REVISIONS TO DURABLE POWER OF ATTORNEY STATUTE ....................................................................................... 34 Registration and Notification ............................................................................................................................. 34 Witnesses ............................................................................................................................................................ 35 RSA 506:6, VIII Revisions ................................................................................................................................ 35 SECTION VII CONCLUSION ............................................................................................................................ 35 APPENDIX A ......................................................................................................................................................... 37 APPENDIX B ......................................................................................................................................................... 44 APPENDIX C ......................................................................................................................................................... 45 APPENDIX D ......................................................................................................................................................... 46 ENDNOTES ............................................................................................................................................................... 52

THE ONE-TWO PUNCH: THE SILVER TSUNAMI AND FINANCIAL EXPLOITATION; WILL NEW HAMPSHIRE BE KNOCKED-OUT? Stephen G. Baker1 Purpose The purpose of this note is to lay the groundwork to enable New Hampshire to strengthen the protection of its growing elderly population from financial exploitation. Furthermore, this note takes into consideration preventative recommendations from the Department of Justice and the Administration on Aging to combat financial exploitation. Background Financial exploitation of vulnerable adults is a growing national epidemic. New Hampshire, with its growing elder population, is particularly situated for exposure to financial exploitation crimes. Thus, this note focuses on methods for combating financial exploitation within the New England states and other states that have high populations or percentages of elderly. The discovery that durable powers of attorney were being used to financially exploit an incapacitated vulnerable adult was the impetus for writing this note. The initial goal was to review New Hampshires statutes and provide a foundation for statutory changes, if needed, to prevent financial exploitation through a durable power of attorney. Research of the durable power of attorney statutes revealed that, although some changes were needed, New Hampshires greatest need was the implementation of a financial exploitation statute. My personal encounter with vulnerable adult financial exploitation is outlined in the case study and motivated the generation of this note. Almost every conversation about this note generated a story of a close friend or relative that was financially exploited. Individuals shared the heartache of a loved one left indigent and living on Social Security. Frustration was expressed about having no recourse against the perpetrator. The stories confirm the prevalence of financial exploitation and the failures of society and the legal system to adequately address the epidemic. Ultimately, financial exploitation will continue to exist and society may never be able to eliminate it completely. However, the problem has become epidemic in nature, which shows some aspects are not being addressed sufficiently. In New Hampshire alone, financial 4

exploitation cases have increased 34% since 2004. New Hampshire can expect the number of financial exploitation cases to grow as its elder population increases. Combating financial exploitation is a community effort and requires the participation of the legislature, prosecutors, law enforcement, long-term care providers, medical professionals, legal professionals, adult protective services, and financial institutions. The law is the basis on which society functions and legislative action is the first step in preventing and combating financial exploitation. This note is meant to provide the necessary insight about where New Hampshire can begin with appropriate legislation. Methodology To gather information for this note, the author performed a comparative analysis of 20 states. Statistical data for populations and percentages is derived from the U.S. Census Bureau.2 For comparison purposes, all the New England states were selected. Furthermore, the states with over one million older Americans and the top four states with the highest percentage of older Americans were also selected for comparison.3 The states with the highest population and percentage of elderly are California and Florida respectively.4 Some states were included because of their financial exploitation statutes or vulnerable adult definitions.5 The states compared were Arizona, California, Connecticut, Florida, Illinois, Maine, Massachusetts, Michigan, Nevada, New Hampshire, New Jersey, New York, North Carolina, Ohio, Pennsylvania, Rhode Island, Texas, Utah, Vermont and West Virginia. Structure This note is divided into six substantive sections. The first section describes the financial exploitation epidemic and begins with a case study. The section then discusses the growth of financial exploitation nationally. The section also outlines the most common forms of financial exploitation. The 20 state comparison is outlined in the second section. It discusses generally the civil law approaches, criminal statutes, and incapacitated and disabled statutes used to combat financial exploitation encountered amongst the 20 states. The section then categorizes the financial exploitation statutes among the states and analyzes them as elder statutes, effects of aging statutes, or true vulnerable adult statutes. The various forms of penalties states impose are then 5

discussed along with combination statutes. Lastly, the section discusses prosecution challenges including reporting and actual case prosecution. The third section discusses a multidisciplinary approach to financial exploitation, the importance of a multiagency collaborative response, the recommendations by the Department of Justice, and Fiduciary Abuse Specialty Teams. Section four presents preventative measures that can be taken to prevent financial exploitation. The measures discussed are education, assessing power of attorney statutes, screening caregivers, and training police and professionals. The fifth section gives the current status of New Hampshire in relation to financial exploitation. Namely, the section discusses the substantial increase in the number of cases in New Hampshire, laws for dealing with financial exploitation, and preventative measures in place. The sixth section provides recommendations for how New Hampshire can increase protection for vulnerable adults against financial exploitation. The recommendations include the adoption of a vulnerable adult definition, enacting a financial exploitation statute, dedicating funds for financial exploitation training, implementing Undue Influence Worksheets,6 and revising the durable powers of attorney statutes. An in-depth explanation of a recommended financial exploitation statute and reasons for each of its provisions is also included.

Section I
The Financial Exploitation Epidemic A Case Study Inga was 74 and suffering from Alzheimers disease. She had remarried after her first husband died 20 years prior. She had accumulated wealth from the first marriage, including several homes and cash assets of over $900,000. She kept her assets completely separate during her second marriage in order to leave an inheritance to her three children from her first marriage. She had also set up a will and designated an executor of her estate. Ingas husband refused to let her see a medical doctor about her ailing condition. He denied her access to medical doctors, and in 2005, her condition deteriorated until she could not sign her full 6

name. Ingas husband took her into the bank and had her unknowingly add his name to all of her private accounts. He influenced her to sell her properties. The sale monies were deposited into their joint accounts. In 2008, he had her sign a durable power of attorney. Since that time, her husband has reallocated over $900,000 in cash assets, relocated the cash from the property sales, and has changed the insurance policy beneficiaries. Inga has been stripped of close to two million dollars in assets. Since the assets in her will have been reallocated, her will is meaningless. Her three children have been effectively disinherited. Inga was financially exploited of a lifetimes worth of wealth and assets by the person who she thought she could trust most, her husband. The New Epidemic Ingas story is not unique; financial exploitation of vulnerable adults is a national epidemic. Since 2000, the number of Americans over the age of 60 has increased by over 10 million.7 By 2010, Americans age 60 or older numbered over 56 million.8 In the same year, older Americans lost over 2.9 billion dollars due to financial exploitation.9 A report in 2004, by the National Center of Elder Abuse, demonstrates that a correlation exists between the aging of America and the number of financial exploitation cases.10 Studies in 2000 also confirm that only one in 25 cases of financial exploitation are reported, suggesting over 5 million total financial abuse victims each year.11 In recognition of the increased need to combat financial exploitation, the White House Office of Public Engagement held an all-day symposium on June 14, 2012 about elder abuse and financial exploitation.12 The event announced a collaborative effort including the Administration for Community Living/Department of Health and Human Services, the Department of Justice, the Consumer Financial Protection Bureau and elder abuse experts from throughout the United States to combat the financial exploitation epidemic.13 One of the initiatives brought forward at the symposium was the creation of the Elder Justice Coordinating Council.14 The council is comprised of several federal agencies that deal directly or indirectly with elder abuse, neglect, and exploitation.15

Vulnerable Adult Explained One of the functions of society is to protect individuals that lack the ability to protect themselves. Most states provide legal protections for disabled or incapacitated adults. Increasingly, states are also protecting elder adults. However, protecting the elderly, disabled, and incapacitated causes a gap to be created for a large group of adults that are not fully incapacitated or disabled, but that also fail to be classified as elderly. This group of adults includes individuals that suffer from mental impairments such as Alzheimers disease, dementia, and other chronic diseases. For the purposes of this note, the term vulnerable adult refers to any person over the age of eighteen that suffers from a physical, mental, or developmental impairment that substantially affects that persons ability to: provide adequately for personal protection; provide necessities such as food, shelter, clothing, or health care; carry out the activities of daily living; or manage the adults own finances. Vulnerable adult includes an incapacitated person. Financial Exploitation Defined A basic definition for financial exploitation is the illegal or improper use of a vulnerable adults funds, property, or assets. The methods for exploiting vulnerable adults can be categorized as the use of fraud, undue influence, or abuse of powers of attorney. Undue influence and abuse of powers of attorney are discussed for the purposes of this note. Undue Influence The first method of exploitation is through undue influence. Undue influence occurs when another person uses emotional, psychological, spiritual, or physical tactics to influence the vulnerable adult into using or transferring money or assets for the benefit of the perpetrator. The perpetrator isolates the vulnerable adult and creates a dependency relationship.16 The perpetrator then emotionally manipulates the vulnerable adult or exploits the adults known vulnerability.17 Fear is the most common emotion manipulated.18 The use of threats to deny family visits, medical treatment, and basic needs are common tactics employed by perpetrators.19 The vulnerable adult is left feeling isolated and trapped.20 Vulnerable adults are usually exploited by someone they know and trust.21 The perpetrator can be a family member, close friend, caregiver, medical provider, attorney, or another person in a position of confidence and trust.22 The vulnerable adult is pressured into cashing out pensions, 8

transferring assets, buying gifts, or helping someone. The vulnerable adult may not even be cognizant of what is happening if some form of dementia, Alzheimers disease, or mental impairment is present. The perpetrator convinces the vulnerable adult that the actions must be taken for their own benefit or that they should spend their assets accordingly. Abuse of Durable Powers of Attorney The durable power of attorney is a useful tool that enables a vulnerable adult to allow another person to manage all of their assets, even after incapacitation. Ideally, the agent acts only according to the wants and desires of the principal. Unfortunately, all too often the agent violates the principals trust. The agent uses the power of attorney to create joint accounts with the principal, to sell property, and cash out pensions. The perpetrators then use the monies for their own benefit or to benefit their friends or family. Thus, the victims assets are systematically depleted. Oftentimes, the perpetrator does not have the intention of financially exploiting the vulnerable adult. The perpetrator gains access to the funds and borrows money in order to pay off debts or to pay for other financial needs. The situation becomes problematic when the perpetrator continues to borrow more funds than could ever be repaid. However, regardless of the initial intention, the act of using or depriving a vulnerable adult of assets amounts to financial exploitation. Detection is the hardest part of preventing financial exploitation when a durable power of attorney is in place. Banks, insurance companies, financial advisors, and realtors are required to accept the power of attorney. There are few, if any, checks upon the agent and whether financial exploitation is occurring. The principal can request an accounting at any time from the agent, but when the principal has a form of mental impairment, it does not occur. Some states allow other interested parties to file an accounting from the agent, but detecting the abuse remains difficult. Reporting Issues As with all types of abuse, the victim rarely comes forward while the abuse is occurring. Since financial exploitation is not normally outwardly visible, the abuse is even less likely to be reported. Studies estimate for every one case of financial exploitation reported, twenty-five are

unreported.23 Almost all states have mandatory reporting statutes; however, studies have shown that the statutes have little or no impact on abuse reporting.

Section II
A 20 State Comparison for Combating Financial Exploitation What is Being Done? Four methods for combating financial exploitation were encountered in the comparison. Each state uses at least one of the methods outlined. The first method is simply to allow individuals to file civil lawsuits for the harm suffered. Secondly, the states prosecute under standard criminal actions such as theft or fraud. Next, some states only have added protection under incompetent or disabled statutes. Lastly, states have created financial exploitation statutes. Civil Law Approaches All of the 20 states have redress for financial exploitation under civil common law causes of action, including New Hampshire. The most common actions are a breach of fiduciary duty and conversion, which are subsequently discussed. Other creative causes of actions are available, but are not addressed for the purposes of this note. Breach of Fiduciary Duty The basic common law approach to elder financial exploitation is to bring a suit for breach of fiduciary duty. A fiduciary is a person to whom property or power is entrusted for the benefit of another. One who commits a breach of the duty owed to the principal is liable for the harm resulting from the breach.24 The breach of fiduciary duty becomes exponentially easier to prove when a durable power of attorney is in place. An accounting of all the principals assets can be demanded either by the principal or the principals representative. Once an accounting is made, the burden shifts to the agent to prove that all of the actions taken were according to the will of the principal. One difficulty arises in durable powers of attorney cases. Typically, the principal is unwilling or unable to testify. The challenge becomes how to prove the agents actions were contrary to the principals best interest when the principal will not or cannot testify. The challenge is overcome through express statements in the durable power of attorney or other documents that manifest 10

intent, such as a will; or the testimony of friends and family members of the principal. The challenge is not insurmountable; however, it typically leads to a long discovery period and increased prosecution expenses. The breach of fiduciary duty entitles the beneficiary to tort damages either in equity or law.25 Restitution may also be granted to make the principal whole. However, since the breach of fiduciary duty is a civil action, no criminal penalties are imposed. Conversion Sometimes the civil action of conversion is used to redress elder financial exploitation. Conversion is an intentional exercise of dominion or control over a chattel which so seriously interferes with the right of another to control it that the actor may justly be required to pay the other the full value of the chattel.26 As discussed above, elder financial exploitation involves some form of deception, fraud, or undue influence. Usually the tort of conversion cannot be proven in financial exploitation cases because the vulnerable adult has given some form of authorization to the transactions. When a durable power of attorney is in place, the challenge of proving conversion becomes even more difficult. Since the perpetrator can legally draw on a joint account, each transaction must be proven to be conversion. The burden of proof combined with a vulnerable adults mental or physical impairment makes proving conversion very difficult. Civil Actions Are Not Solutions Although civil actions allow for a restitution of damages, they present an undue burden on the vulnerable adult. By the time the vulnerable adults take steps necessary to prevent further abuse, their assets are depleted or the money is gone. The perpetrator has left them financially torn and unable to provide for themselves. The victims do not have funds to hire a private attorney to seek restitution. Legal aid providers are also unable to pursue costly litigation due to budget constraints. Thus, vulnerable adults technically have redress, but in reality, cannot access the justice system. Hence, the perpetrators are never held accountable for abusing their fiduciary duties or for converting the vulnerable adults assets.

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Criminal Statutes Prosecutors use several types of criminal statutes to combat financial exploitation. However, the two principal ones are theft and fraud. Most states in the comparison, including New Hampshire, have multiple types of theft and fraud statutes that could be used for prosecuting financial exploitation crimes. Some states also have specific criminal statutes for abuse under a power of attorney. New Hampshire does not have a specific criminal statute to address financial exploitation or specific criminal provisions for an agents abuse under a power of attorney. Therefore, the state relies upon existing theft and fraud statutes to criminalize financial exploitation. Since New Hampshire uses theft and fraud statutes for prosecuting cases, they are addressed below. Theft Theft is the default cause of action in all states for prosecuting financial exploitation, when specific criminal statutes are unavailable. The difficulty of prosecuting cases under theft statutes is the matter of consent. Vulnerable adults suffer from a mental or physical impairment, which the perpetrator exploits to gain their consent. Thus, some sort of consent is usually given, but only because of coercion, deception, or intimidation. Furthermore, if the vulnerable adult has executed a durable power of attorney and the agent is the perpetrator, the case becomes near impossible to prosecute under a theft statute. Since the perpetrator has legal access to control the vulnerable adults assets, the crime is rarely classified as theft. Fraud Fraud statutes are sometimes employed to address financial exploitation, but they are also limited in their reach. Such statutes are typically reserved for telephone, mail schemes, or organized scams. Furthermore, to prove fraud, most states require that the perpetrator knowingly or recklessly committed the crime. Fraud statutes are effective against businesses or sophisticated schemes. However, for the majority of cases involving intimate relationships, fraud statutes are ineffective. Elderly, Incapacitated, or Disabled Statutes A few states have realized the vulnerability of adults that are elderly, incapacitated, or disabled and have criminalized various forms of abuse against them. New Hampshire, for example, 12

criminalizes serious bodily injury resulting from neglect of an elderly, incapacitated, or disabled adult.27 However, the states statute fails to protect the adults from financial exploitation. Similar statutes either over or under protect segments of the population. As discussed above, New Hampshires statute has few protections for its vulnerable population. Massachusetts and West Virginia, which protect the elderly from financial exploitation, over and under protect its population by including elderly adults that are not vulnerable and not including vulnerable adults that do not meet the age threshold for protection or qualify as an incapacitated adult.28 Thus, statutes protecting the elderly, incapacitated, or disabled adults are inherently problematic to addressing the financial exploitation epidemic. Furthermore, such statutes are typically designed to prevent general abuse and do not address the unique challenges of financial exploitation. Financial Exploitation Statutes New Hampshire is among ten states that do not have a financial exploitation statute. Among the states with financial exploitation statutes, three types are used. California, Florida, Illinois, North Carolina, Rhode Island, Utah, and West Virginia use Elder statutes, which contain age as a criterion. Vermont and Florida use Effects of Aging statutes that contain language referencing how one is protected due to the process of aging. Arizona and Nevada provide true Vulnerable Adult statutes that do not isolate the older population, but base protection on mental or physical impairments.29 Elder Statutes Elder statutes are the first type of statutes used. Elder statutes specify an age at which one qualifies for protection regardless of whether a physical or mental impairment exists. Many states use the specified age in conjunction with incapacitated language in an effort to protect incapacitated adults from financial exploitation as well as elder adults. In the process, older adults meeting the age requirement, who are not impaired, are overly protected. For example, West Virginias statute states: Financial exploitation occurs when a person intentionally misappropriates or misuses the funds or assets of an elderly person, protected person or incapacitated adult. Elderly person means a person who is sixty-five years or older.30 13

The elder statutes inherent assumption is that obtaining a certain age makes one vulnerable. The compared states use ages between sixty and sixty-five. Medical evidence does not support the premise that at any given age one becomes vulnerable.31 Contrary to current stereotypes, studies actually indicate that most elderly never become vulnerable during their lives.32 Therefore, vulnerability should be determined not by the persons age, but by the existence of a physical or mental impairment. Furthermore, elder statutes fail to protect vulnerable adults. Adults between the age of 18 and the age specified in the statute, who are not incapacitated, may be just as vulnerable as one who falls within the age parameter. For example, the statute may use the age of 65 as the qualifying age. A 50 year-old person who has a mental or physical impairment, but not deemed incapacited, would not be protected from financial exploitation merely because the age requirement has not been satisfied. Thus, financial exploitation statutes that use age as a threshold propagate stereotypes and fail to protect the entire vulnerable population. Effects of Aging Statutes Effects of Aging statutes are the second type of financial exploitation statute used by the compared states. These statutes use references to aging as a qualification for protection. For example, Vermont defines a vulnerable adult as being: Any person 18 years of age or older who is impaired due to brain damage, infirmities of aging, or a physical, mental, or developmental disability that results in some impairment of the individual's ability to: provide for his own care without assistance, including the provision of food, shelter, clothing, health care, supervision, or management of finances; or protect himself from abuse, neglect, or exploitation.33 This definition is broad in nature, but assures adequate protection for vulnerable adults that suffer from physical or mental impairments. However, using infirmities of aging language implies that aging causes one to be weak and in need of protection. The use of effects of aging language is confusing and burdensome and the statute could strike the entire phrase while maintaining its effectiveness. This type of statute is substantially better than using a specified age, but it still implies the false stereotype that with age comes a diminished capacity.

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True Vulnerable Adult Statutes True vulnerable adult statutes are the last type of statute used by the compared states. Arizonas statute provides an excellent example of this kind of statute. The statute states: Vulnerable adult means an individual who is eighteen years of age or older and who is unable to protect himself from abuse, neglect or exploitation by others because of a physical or mental impairment. Vulnerable adult includes an incapacitated person.34 Arizonas definition refers only to the type of physical and mental impairments that makes one vulnerable. Thus, the statute protects only the vulnerable population and implies that not all elder adults are vulnerable. Furthermore, the statute includes any adult within the statute and does not discriminate based upon age. True vulnerable adult statutes protect all vulnerable adults, do not propagate false stereotypes, and refrain from overprotecting any segment of society. Society has a legitimate interest in protecting its vulnerable population from financial exploitation; however, states should be careful not to use age as a part of its criteria. The use of true vulnerable adult statutes supports public policy by protecting the vulnerable and maintaining the independence of older adults. Penalties The penalties for financial exploitation vary widely among the compared states. Penalties range from misdemeanor infractions to first-degree felonies. There are five different methods used to address financial exploitation cases. The methods are: civil penalties, standard criminal penalties, enhanced penalties, fines and incarceration, or combination statutes. New Hampshire does not have civil penalties, enhanced penalties, or fines and incarceration specifically for financial exploitation. The state uses only standard criminal penalties for sentencing perpetrators. Civil Penalties Some states impose only enhanced civil penalties in the statutes. California allows for reasonable attorney fees and costs.35 Furthermore, if malice is shown to exist then enhanced compensatory damages and punitive damages are allowed.36 Lastly, the statutes allow for twice the value of the property recovered if done under a power of attorney.37 Arizonas financial exploitation statute imposes only civil penalties. The statute provides for actual damages, reasonable costs, and

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attorney fees.38 However, the statute also causes the forfeiture of all or a portion of benefits, property, and interest held by the perpetrator of the vulnerable adults estate.39 This approach to financial exploitation does not criminalize financial exploitation. Although the victim is made whole, the perpetrator is not held accountable to the same level as one that embezzles, defrauds, steals, or launders money. Financial exploitation is as much a crime as embezzlement or fraud. In fact, the crime is even more serious because it involves stealing from the vulnerable members of society. Civil-only penalties do not fully consider the magnitude of the crime against society. Standard Criminal Penalties This classification takes existing penalties as found under theft or fraud statutes and uses the sentencing guidelines to impose a penalty. For example, New Jersey does not have any provisions for financial exploitation and uses its theft and fraud statutes to prosecute abuse.40 New Jersey uses its existing statutory provisions to impose criminal penalties.41 Standard penalties, although better than mere civil penalties, also fail to consider the seriousness of the crime. Financial exploitation is not merely a different type of theft, but a crime against those who lack the capacity to defend themselves. Just as a child requires greater protection from abuse, vulnerable adults also require added protection. The crime is enhanced when the victim is preyed upon without having the mental or physical ability to prevent or stop the abuse. Thus, standard penalties fail to appropriately penalize perpetrators. Enhanced Penalties Ohio, Texas, and Massachusetts enhance penalties for an offense against an elderly person. In Ohio, the crime of theft escalates to a felony regardless of the amount in question.42 Texas increases the punishment for a breach of fiduciary duty to the next higher sentencing category, when the victim is an elderly person.43 Massachusetts imposes fines, increased imprisonment, and restitution for larceny when the victim is elderly or disabled.44 Using enhanced penalties adequately addresses the gravity of financial exploitation, but also requires revision to all the statutes used to address it. States using enhanced penalties, like Massachusetts, do not have financial exploitation statutes. Thus, states must revise all possible 16

statutes used to address financial exploitation to include enhanced penalties for vulnerable adults. Legislatively, the burden for revising an entire body of statutes can be tedious, but ultimately the penalties appropriately penalize the crime committed. Fines and Incarceration Florida, Vermont, and Nevada use fines and incarceration for financial exploitation violations. Florida makes financial exploitation a felony regardless of the amount in question.45 It uses the value of the property to classify whether the crime is a first, second, or third degree felony.46 Similar to Florida, Nevada uses fines and incarceration as penalties and classifies the crime according to the value of the property.47 Vermont uses fines, incarceration, or both to penalize perpetrators.48 However, it does not classify the crime as a misdemeanor or felony.49 States using fines and incarceration have specific financial exploitation statutes. Although these states adequately penalize the perpetrator, the statutes sometimes fail the victim. The vulnerable adult is still left to pursue restitution through the civil system. Thus, even though the perpetrator has been criminally penalized, the victim has not been made whole. Some states have addressed this deficiency by modifying sentencing statutes to allow for restitution. In such states, fines and incarceration would adequately address all criminal and civil penalties that should be rendered. Combination Statutes Combination statutes are financial exploitation statutes that join the criminal and civil components. A combination statute criminalizes financial exploitation and provides civil remedies. Illinois, for example, classifies financial exploitation of an elderly person or person with a disability as a felony, incrementally increasing the degree based upon the amount exploited.50 However, the statute also imposes civil liability with a provision that can impose treble damages, attorney fees, and court costs.51 Furthermore, another statute denies the perpetrator any potential gain resulting from the victims death.52 A combination statute is the most effective method for addressing financial exploitation. A statute that addresses all types of penalties eliminates the need to adjust other statutes, addresses the gravity of the crime, and provides civil relief for a victim who would otherwise be unable to bring a separate suit. Statutes that provide for attorney fees and costs also lessen the burden on prosecutors offices that have scarce resources, which increases efficiency. 17

Prosecution Challenges Reporting Prosecutors face several challenges in getting a case brought before them. Statistics indicate that only one of every twenty-five cases is ever reported. Since the abuse is hard to recognize from the outside, third parties are typically unaware that abuse is occurring. Furthermore, the vulnerable adult does not report the abuse due to embarrassment, shame, fear, economic issues or a hope that the perpetrator will stop the abuse. Lack of law enforcement training is another hurdle for the prosecution of financial exploitation cases. Police academies are just beginning to train cadets in recognizing elder financial exploitation. Law enforcement is sometimes the first to be notified of potential abuse, but many officers are trained to treat financial exploitation as a civil matter. Thus, police reports about financial exploitation are not given the investigative attention required to stop and prevent further abuse. Actual Prosecution Jurisdictions where no financial exploitation statute exists face the realization of budget constraints limiting demanding prosecutions. In such jurisdictions, the burden of proof is increased and matters of consent and incompetency are typically argued. Thus, the cases become burdensome and resources limit the number and type of cases that are actually prosecuted. Connecticut established a specialized financial exploitation unit to prosecute cases; however, because of scarce resources the cases were limited to amounts over $10,000.53 However, after the first year, the unit was forced to increase the threshold amount to $50,000 because of the lack of resources.54 Cases below the threshold were referred to local police departments.55 Similarly, New Hampshire cases were limited to amounts over $100,000, which drastically limited the cases that could be prosecuted.56 The reality of scarce resources means that exploitation cases brought to light before the threshold is met may never be prosecuted. Effectively, a justice gap is created. States, like Connecticut, without financial exploitation statutes, are forced to classify the crime as a type of theft or fraud. Most states have several different theft and fraud statutes. However, financial exploitation, with its unique challenges, is not easily classified as theft or fraud. Thus, 18

the burden on the prosecution increases when trying to prosecute crimes without a financial exploitation statute. One of the benefits of creating a financial exploitation statute is that the prosecution of crimes is streamlined. Financial exploitation statutes define the crimes committed, impose penalties, and provide for restitution. The burden of proof is significantly lowered and the prosecution is less demanding on resources.

Section III
A Multidisciplinary Approach The Multiagency Collaborative Response Combating financial exploitation effectively requires a multiagency approach. The complexity of financial exploitation requires the involvement of various community members. The DOJ recognizes that expertise in a variety of specialties is needed because no single agency has the necessary resources or skills.57 Financial institutions, law enforcement, the attorney generals office, caregivers, and religious leaders can have an impact in preventing financial exploitation. Department of Justice Recommendations The first way the Department of Justice (DOJ) recommends combating financial exploitation is through the use of a multiagency task force like a FAST team.58 The department concluded that the multiagency task force works well when its a collaborative partnership between public, private, and nonprofit organizations.59 However, the sole use of a multiagency task force, as a stand-alone strategy, was recognized by the department to not likely have a significant impact on the scope or level of financial exploitation.60 Thus, FAST teams need support from other sources to be effective at combating financial exploitation. Fiduciary Abuse Specialty Teams What Are They? Fiduciary Abuse Specialty Teams (FAST) specialize in financial exploitation. FAST teams were conceived on a state level to combat financial exploitation. In 1993, Los Angeles Countys FAST team was established as the first team in the country.61 FAST teams bring together attorneys, members of the district and city attorney offices, physicians, psychologists, gerontologists, law 19

enforcement, bankers, financial planners, securities and investment brokers, realtors, and insurance brokers.62 The goal of a FAST team is to combat financial exploitation using a holistic approach. Cases are brought by any member of the team. Expert consultants are brought in as needed to address specific elements of a case. The various team members work together and provide help to the victim through the entire case. The cases reviewed by FAST teams include elder exploitation by family members, caregivers, institutions, professionals, and the misuse of powers of attorney. FAST teams benefit the individual by recovering the victims assets, preventing further losses, and improving the victims life circumstances. However, the community benefits by strengthening its ability to serve victims of financial abuse, the building of preventative measures and strategies, and increasing the effectiveness of resources through working relationships. One of the greatest benefits of the FAST is the use of experts from several agencies in educational programs to combat financial exploitation. Why Are They Needed? When financial exploitation occurs, it causes a ripple effect in society. Financial institutions, insurance companies, healthcare programs, and businesses suffer. The victim that was once independently wealthy becomes dependent upon state programs. Furthermore, the acquired wealth and inheritance is lost. The complexities of financial exploitation require more than just law enforcement, prosecutors, or adult protective services working mostly independently. It requires a community-based approach. The DOJ recognized that financial exploitation usually occurs in connection with other crimes.63 Physical abuse, assault, neglect, and sexual abuse, are some of the types of abuse that occur concurrently with financial exploitation. A FAST team, although focused on financial exploitation, is also situated to provide the victim with assistance for all types of abuse. The FAST team can intervene to stop the abuse, mitigate fears, provide safety, and get medical help through a community coordinated effort.

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Section IV
Preventative Measures The best method of combating financial exploitation is prevention. Preventative measures are vital to curtailing the financial exploitation epidemic. The DOJ recommends enacting proactive health care, legal, and financial planning.64 The department also recommends assessing power of attorney statutes, screening caregivers, and training police and professions involved in elders affairs.65 The recommended preventative measures are discussed below. Education Educating vulnerable adults about financial exploitation and programs is a critical component to preventing it. The DOJ recognizes that multidisciplinary teams are ideally situated to help vulnerable adults make healthcare and financial arrangements before they are necessary.66 Multidisciplinary teams have a wide variety of community experts in the law, healthcare, law enforcement, and finance that can effectively train, educate, and provide services for seniors. Although education is critical to preventing financial abuse, its effectiveness is limited as a stand-alone strategy.67 Thus, a multidisciplinary community cooperative effort that provides not only information, but direct access to services will increase the effectiveness of educational efforts. New Hampshire does not have a multidisciplinary team that focuses exclusively on financial exploitation. However, the Merrimack County Community Coordinated Response Team (MCCRT) is an organization that was founded in 2009 that educates and addresses elder abuse within the community. The organizations efforts are discussed in detail in Section V of this note. Daily Money Management (DMM) Programs Educating vulnerable adults about Daily Money Management Programs is one way to prevent financial exploitation. DMM programs prevent financial exploitation through assisting individuals to manage their finances.68 The services offered vary from simple bill-paying to appointments of surrogate decision-makers.69 The program goal is to provide the least restrictive alternative, which gives the vulnerable adult increased independence and autonomy.70 Financial

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exploitation is thwarted by eliminating the opportunities for abuse, denying access to assets, and eliminating motives for abuse.71 Although highly effective at combating financial exploitation, DMM programs are in short supply.72 Educational trainings about DMM programs to law enforcement, attorneys, senior centers, Adult Protective Services, and other agencies that are integrated with DMM program representatives would allow vulnerable adults to take greater advantage of the programs. Attorney Services Educating vulnerable adults regarding attorney services can also prevent financial exploitation. The legal community can greatly assist in combating financial exploitation by providing continuing learning education programs to attorneys about durable powers of attorney, wills, trusts, and estate planning. However, the quality of attorney education does not empower the community. An outreach educational and training program for law enforcement, healthcare workers, senior centers, and other agencies or individuals that have substantial contact with vulnerable adults will increase general awareness and increase access to attorney services. The local Bar Association, law schools, private attorneys, or Fiduciary Abuse Specialty Team members are the ideal educators about attorney services. Educational efforts should outline the risks and advantages of legal options available so that vulnerable adults are empowered to make informed decisions regarding their financial and healthcare legal options. Financial exploitation can be prevented by having legal barriers to financial assets. Assessing Power of Attorney Statutes As stated previously, agents of a power of attorney (POA) have very little accountability for their actions as a fiduciary. The DOJ recommends as a preventative measure that POA statutes be reviewed for establishing, auditing, modifying, and canceling a POA.73 In 2009, an Elder Law Journal note recommended enhancing the effectiveness of power of attorney statutes through registration, witnesses, and notifications.74 New Hampshires durable power of attorney statutes do not require registration, witnesses, or notifications and can greatly benefit from implementing the recommendations. A witness and notary are only required if the power of attorney grants the ability to transfer real property. 22

Although common practice in New Hampshire amongst attorneys is to use a witness and notary, legally it is not required. Thus, a legal gap exists for vulnerable adults to be exploited. Other revisions can also be made to enhance the protective provisions within the statutes. The recommended revisions are detailed in Section VI of this note. Registration Mandatory registration requirements for powers of attorney before they go into effect ensure compliance with all the requirements for a power of attorney and that a copy is obtained by the controlling entity.75 Registration allows for further protective measures to be put in place, such as random auditing or accessibility by financial institutions.76 Currently, some states provide for the registration of agents who have breached their fiduciary duties under a power of attorney. A reactive response, however, does not prevent financial exploitation in the first instance. Thus, mandatory registration is a better option since it is proactive and aimed at decreasing the amount financial exploitation that occurs under the guise of a power of attorney. Witnesses The presence of witnesses when executing a power of attorney is another preventative measure that can help combat financial exploitation. Of the states compared, only five require witnesses to powers of attorney. However, 19 of the 20 states require powers of attorney to be notarized. California and Michigan statutes provide for either two witnesses or a notary. Arizonas power of attorney statute is an excellent example of integrating witnesses and notaries. Its statute requires the principals signature, a witness other than the agent, and notarization to create a valid power of attorney.77 Other potential validating individuals could consist of attorneys, judges, FAST team members, or another certification requirement. Financial exploitation training could also be incorporated in notary public certifications for an integrated approach. Notifications A notification requirement would also strengthen a power of attorney.78 The requirement would give the principal the option to have five persons contacted at the time the power of attorney is registered.79 The five persons are granted standing for petitions to the court regarding the fiduciary actions of the agent.80 The largest benefit of the notification process is having parties

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genuinely interested in the welfare of the principal on alert for any suspicious activity from the onset of the agents assignment.81 Utah is the only state that has notification requirements among the compared states. Utahs POA statute requires that the agent notify all interested parties within 30 days of the incapacitation of the principal.82 The interested party is defined as any person entitled to a part of the principal's estate from the principal's will or through the intestacy laws, whichever is applicable.83 The notification process is a strong prevention method of financial exploitation because it acts as deterrent for errant conduct by the agent. Screening Caregivers The DOJ recommends screening caregivers for criminal records.84 Screening measures would prevent perpetrators with a history of physical, financial, or sexual abuse and neglect violations from being employed as a caregiver.85 Although screening would be effective for licensed caregivers, unlicensed or familial caregivers would go undetected.86 Thus, only a portion of perpetrators would be prevented, but the cost to employers is worth the benefit of reducing their liability and contributing to curb the financial exploitation epidemic. New Hampshire does not statutorily mandate screening caregivers for criminal records. The state does require employers to submit for review the names of prospective caregivers against a registry of convicted perpetrators of financial exploitation.87 The names remain on the registry for seven years and perpetrators cannot be hired as caregivers without a waiver.88 Training Police and Professionals Training of police officers and professionals is a proactive preventative measure because it empowers officers and professionals to recognize financial exploitation in the early stages of development. If detected early, further exploitation can be prevented and other forms of abuse can be stopped. Multiagency collaborative organizations, such as FAST teams, are required to combat financial exploitation.89 To train police and professionals, a multidisciplinary approach is required because no single agency has all of the resources, individuals, or knowledge of the many facets of financial exploitation.90

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Police officers require specific training on how to recognize fraud and financial exploitation.91 Furthermore, procedures and reporting methods need to be developed to aid officers in gathering statements and evidence that will allow prosecutors to build cases against the perpetrators. Dr. Bennett Blum, an expert in geriatric psychiatry, developed worksheets for police, Adult Protective Services, and probate investigators to recognize undue influence.92 Training on and implementation of such worksheets and operating procedures will help first responders prevent financial exploitation and document the requisite facts for prosecutors. Professionals in financial institutions need training on recognizing signs of abuse because they are uniquely situated to help prevent and detect financial exploitation.93 Financial institutions already have many mechanisms to prevent fraud and through training they can integrate specific strategies for financial exploitation. To be effective, a FAST team must receive cooperation from banking and financial institutions regarding the best method of implementation, demonstrating a further need for a multidisciplinary approach. New Hampshire just recently began instructing police officer cadets about financial exploitation. The training, although comprehensive, requires reinforcement training to increase effectiveness. Training for other professionals does not exist in the state. New Hampshire has multidisciplinary teams that are positioned to develop and train police officers and professionals, but state support is required for such trainings to come into fruition.

Section V
New Hampshires Status Financial exploitation in New Hampshire Since 2004, the New Hampshire Bureau of Elderly and Adult Services has reported a dramatic 34% increase in financial exploitation cases.94 A 30% increase was recognized in adults age 50 and older.95 The alarming rise in financial exploitation cases in New Hampshire is compounded by its aging population. The New Hampshire Center for Public Policy estimates that by 2030, nearly half a million New Hampshire residents will be over 65 years old, which will represent nearly 30% of the total population.96 A 2012 Carsey Institute report confirms the predictions and concludes that the within the next 20 years a doubling of the population aged 65 to 74 will likely occur.97 The significant rise in financial exploitation cases in New Hampshire coupled with the 25

projected doubling of its older population gives rise to the need for combating financial exploitation within the state. New Hampshires Laws for Addressing Financial Exploitation Incapacitated Adult New Hampshire provides protection only to incapacitated adults.98 The State defines incapacitated as: [T]he physical, mental, or emotional ability of a person is such that he is unable to manage personal, home, or financial affairs in his own best interest, or he is unable to act or unable to delegate responsibility to a responsible caretaker or caregiver.99 This definition excludes a large portion of vulnerable adults that have mental and physical impairments that do not constitute incapacitation. Thus, the incorporation of the incapacitated adult definition, throughout New Hampshire statutes, only gives protection to the most vulnerable residents of the State. Financial Exploitation Defined The state employs the following definition for exploitation: Exploitation means the illegal use of an incapacitated adults person or property for another persons profit or advantage, or the breach of a fiduciary relationship through the use of a person or a persons property for any purpose not in the proper and lawful execution of a trust, including, but not limited to, situations where a person obtains money, property, or services from an incapacitated adult through the use of undue influence, harassment, duress, deception, or fraud.100 Although New Hampshire provides a definition for financial exploitation, it does not have any particular statute that provides relief for victims or penalties for perpetrators. Victims must seek relief under civil causes of action for breach of fiduciary duty and conversion. Prosecutors must file criminal charges under a variety of theft and fraud statutes.101 The States general restitution statute does authorize restitution when financial exploitation crimes are successfully prosecuted as theft or fraud.102 However, enhanced penalties for financial exploitation of vulnerable adults or the elderly do not exist. Thus, financial exploitation is not fully addressed statutorily in New Hampshire.

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Powers of Attorney Statute The states durable powers of attorney statute purports to provide several protections for principals. However, upon careful examination, almost all protections are countered by nonmandatory provisions. To create a durable power of attorney, a principal merely needs to execute a document containing language that shows the principals intent to transfer authority after disability or incompetence.103 Noticeably absent from the statute is the requirement for a witness or a notary to validate the writing. Only one exception exists to the requirement, and that is for the transfer of real property. To transfer real property, a power of attorney must be notarized.104 Thus, unless the principal wants to vest the power to transfer real property, no safeguards exist to prevent financial exploitation. Even after powers of attorneys are notarized, vulnerable adults have an increased susceptibility to fraud. The common practice amongst New Hampshire attorneys is to require a witness and notary when executing a power of attorney. However, these common practices only provide protection to the attorneys clients. A vulnerable adult, not utilizing attorney services, can be exploited without any other person knowing that the power of attorney was given due to undue influence, coercion, or deception. In such manner, a vulnerable adult is more susceptible to financial exploitation under a power of attorney. The state statute provides specific language that appears to be mandatory for a durable power of attorney to be valid. Specifically, the statute requires a statement of understanding by the principal to be attached and signed along with a statement of understanding by the agent of the agents duties and responsibilities.105 However, these protections are subsequently deemed not determinative of the validity of the durable power of attorney,106 which effectively destroys the protective measures. The measures only become effective after a petition challenging a gift to the agent is filed.107 The consequence of omitting the statements is that the burden of proof shifts to the agent in proving by the preponderance of the evidence that the gift was not given under undue influence, fraud, or misrepresentation.108 Given that only one of 25 cases is ever reported, let alone prosecuted, the effectiveness of the protective measures is negligible.

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One unique provision of New Hampshires durable power of attorney statute is the ability for almost any interested party to file a petition challenging the legality of acts, proposed acts, or omissions of the agent and compel the agent to submit an accounting.109 The statute allows the principals spouse, child, or parent to file a petition.110 Further, a treating health care provider, any person named in the principals will, and any person in the principals intestate succession that would take property, can file a petition.111 More significantly, the statute provides that if no specifically listed person is able or willing to file a petition, then any interested party may file.112 This provision is a substantial protection against financial exploitation, when a durable power of attorney is in place. Essentially, the provision grants standing to anyone that knows and cares for the principal. Preventative Measures in New Hampshire Merrimack County Community Coordinated Response Team (MCCRT) The MCCRT is a multidisciplinary team that has been operating in New Hampshire since 2009 under a grant awarded by the Office of Violence Against Women.113 The team consists of the following agencies, organizations, and individuals:114 New Hampshire Attorney Generals Office New Hampshire County Attorneys Association New Hampshire Bureau of Elderly and Adult Services New Hampshire Coalition Against Domestic and Sexual Violence New Hampshire Council of Churches New Hampshire ServiceLink Aging and Disability Resource Center New Hampshire Legal Assistance University of New Hampshire School of Law Police and fire departments Mental Health Centers Private attorneys Financial institutions

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The purpose of the MCCRT is to improve community response to elder abuse by promoting practices that prevent abuse, enhance coordination services, and offer effective interventions.115 The team is currently expanding and aims to develop a Fiduciary Abuse Specialist Team in 2012. The ultimate goals of the multidisciplinary team are to: Increase community awareness of all forms of elder abuse; Educate the community about prevention and response; Develop sensitive and effective responses to victim/survivors; Promote and develop practices which hold perpetrators accountable for their actions; Provide opportunities for collaboration among service providers; and Improve access to appropriate services.116

The MCCRT is a functioning organization which can provide financial exploitation and other abuse-related trainings. The teams coordinated and integrated approach to training allows for a community effort to reach vulnerable adults and the persons that interact with them. However, funding for the MCCRT is minimal and further sustainable resources are needed to expand the organizations reach to the entire state. Daily Money Management Programs New Hampshire ServiceLink lists 21 companies in the state that provide Daily Money Management services.117 The existence of such companies is highly encouraging. Further, the promotion of the facilities by ServiceLink is a major step in utilizing DMM programs to prevent financial exploitation. However, the establishment of DMM programs is still not widely known and educational efforts to draw awareness of their services would be highly beneficial to vulnerable adults. Mandatory Reporting, Registration, and Investigations New Hampshire requires reporting financial exploitation of an incapacitated adult by any person, physician, healthcare professional, social worker, clergy, and law enforcement.118 Investigations are required to be instigated within 72 hours of the filing of financial exploitation reports.119 Registration of paid or volunteer caregivers, guardians, or agents of a power of attorney that are known perpetrators is also required.120 Furthermore, the employer of any caregiver, consultant,

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or contractor that provides personal care services is also mandated to submit the persons name for review against the registry.121

Section VI
Recommendations New Hampshires State Plan on Aging states its fourth goal as [to] ensure the rights of older people and prevent their abuse, neglect, and exploitation.122 To further fulfill the New Hampshires goal to prevent financial exploitation, it is recommended that the state adopt a vulnerable adult definition, enact a financial exploitation statute, dedicate organizational funding for FAST team training, implements Undue Influence Worksheets, and revise the power of attorney provisions. Vulnerable Adult Definition The value of using vulnerable adult language is that it removes stereotypes and does not exclude individuals that do not meet an age, incapacitation, or disability requirement. By adopting such language, the most targeted individuals for financial exploitation will be protected. The recommended definition is: Vulnerable adult means an individual who is eighteen years of age or older and suffers from a physical, mental, or developmental impairment that substantially affects that persons ability to: provide adequately for personal protection; provide necessities such as food, shelter, clothing, or health care; carry out the activities of daily living; or manage the adults own finances. Vulnerable adult includes an incapacitated person as defined in 161-F:43.123 This definition provides protection for vulnerable adults, but intentionally limits its reach by not including elderly adults or infirmities of aging language. Thus, the language does not overprotect any particular class and is limited only to individuals that have some type of impairment that meets the outlined requirements. Financial Exploitation Statute New Hampshires current method for addressing financial exploitation does not deter perpetrators sufficiently, does not provide relief for victims, and is burdensome on prosecutors. 30

Therefore, the adoption of a financial exploitation statute is recommended. A specific statute for financial exploitation combats the epidemic by providing criminal penalties for perpetrators and civil remedies for victims. Prosecutors also benefit immensely by having a criminal law that imposes penalties specifically for the crime of financial exploitation. The recommended language for the financial exploitation is: Financial Exploitation of a Vulnerable Adult I. A person commits financial exploitation of a vulnerable adult when: (a) He or she uses the vulnerable adults property for another persons profit or advantage, or stands in a position of trust or confidence with the vulnerable adult and obtains money, property, or services from a vulnerable adult through the use of undue influence, harassment, duress, deception, or fraud; or124 (b) A breach of fiduciary duty to a vulnerable adult occurs by the persons guardian or agent under a power of attorney which results in an unauthorized appropriation, sale, or transfer of property.125 II. Sentence. Financial exploitation of a vulnerable adult is: (a) A class A felony if the funds, assets, or property involved in the exploitation of the vulnerable adult is valued at $100,000 or more and is punishable up to 15 years imprisonment and a $4,000 fine; or126 (b) A class B felony if the funds, assets, or property involved in the exploitation of the vulnerable adult is valued at $20,000 or more, but less than $100,000 and is punishable up to 7 years imprisonment and up to a $4,000 fine; or127 (c) A class A misdemeanor if the funds, assets, or property involved in the exploitation of the vulnerable adult is valued at less than $20,000 and is punishable up to 1 year imprisonment and a $2,000 fine.128 III. Civil Penalties. (a) A person who is charged by information or indictment with the offense of financial exploitation of a vulnerable adult and who fails or refuses to return the victims property within 60 days following a written demand from the victim or the

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victims legal representative shall be liable to the victim or to the estate of the victim for reasonable attorney fees and court costs; and129 (b) Through the discretion of the court, forfeit all or a portion of the persons benefits with respect to the estate of the vulnerable adult, including an intestate share, an elective share, an omitted spouses share, an omitted childs share, a homestead allowance, any exempt property and a family allowance. If the vulnerable adult died intestate, the vulnerable adults intestate estate passes as if the person who violated subsection I of this section disclaimed that persons intestate share to the extent the court orders that person to forfeit all or a portion of the persons benefits.130 IV. Restitution. A person convicted of financial exploitation shall be sentenced to make restitution of the full value of the funds, assets, or property involved in the exploitation to the vulnerable adult or the adults estate in accordance with 651:63 and section III of this statute. Financial Exploitation Statute Explained Section I- Definition The proposed financial exploitation statute comprises language to address all aspects of financial exploitation. Section I outlines what constitutes financial exploitation. Section I (a) includes individuals in any position of trust who exercises any type of coercion to gain access to the vulnerable adults assets. Section I (b) formally addresses those in a fiduciary role. Thus, the statute addresses both informal and formal relationships where exploitation occurs. Section II- Sentencing Section II provides sentencing guidelines for persons convicted of financial exploitation. Most states using specific criminal statutes classify exploitation as a felony. The classification guidelines were drawn from Floridas exploitation statute.131 The recommended penalties are not enhanced. The imprisonment and fine guidelines are drawn from penalty guidelines already in place.132 The statute leaves room for judicial discretion when determining imprisonment sentences for perpetrators. The recommended fines are also drawn from existing guidelines; however, maximum fines are instilled for class A felonies and class A misdemeanors. For class B felonies, 32

judicial discretion is given. The fines are meant to offset prosecution costs of financial exploitation. Section III- Civil Penalties Section III (a) of the statute is drawn from Illinois financial exploitation statute.133 This section holds the perpetrator liable for attorney fees and court costs if the property is not returned within 60 days of written notice. This provision grants victims access to attorneys and the court system because it removes financial barriers. Furthermore, award amounts are not diminished by attorney fees and court costs. Section III (b) removes any subsequent benefit that a perpetrator may gain from the victim. Arizonas statute provided the foundation for the language of this section.134 This provision deters potential perpetrators from committing financial exploitation with the threat that any subsequent inheritance would be lost. Furthermore, actual perpetrators may be stripped of any and all potential benefit from the vulnerable adults estate. However, discretion of the court is intentionally given, which allows for a case-by-case imposition of this penalty. Section IV- Restitution Although New Hampshire has a restitution statute, section IV mandates that restitution be given without exception. This provision guarantees victims that they will receive an order for restitution if the alleged perpetrator is found guilty of exploitation. The provision instills confidence in the legal system that a remedy is available. Dedicated Budgets for FAST Trainings The Merrimack County Community Coordinated Response Team (MCCRT), as discussed in Section V, is a valuable asset to New Hampshire. The groundwork for building a training program that will educate statewide agencies, professionals, and the community has been laid by the MCCRT. A Fiduciary Abuse Specialty Team is under development by the MCCRT that will specialize in cases and training on financial exploitation cases. The recommendation is for state programs and agencies to dedicate funding in their budgets for FAST trainings. A 2003 survey135 by the National Association of Adult Protective Services Administration (NAAPSA) reported that financial exploitation training was needed in the following organizations:

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State Attorneys General Law Enforcement (Police/Sheriff) Bank Officials District Attorneys Judges County/Parish Attorneys Banks Public notaries Prosecutors Real Estate agents/brokers Title company staff

Furthermore, private businesses and other organizations that interact with vulnerable adults regularly will also benefit immensely from FAST trainings. State agencies that dedicate funding for financial exploitation trainings will enable the FAST team to develop the multiagency training required and recommended by the Department of Justice and NAAPSA for a community response to financial exploitation. Implementation of Undue Influence Worksheets Appendix A shows the recommended Undue Influence Worksheets to be implemented that were developed by, Dr. Bennett Blum, the renowned expert on undue influence. The worksheets aid police, Adult Protective Services, and other investigators to determine whether undue influence was exercised over a vulnerable adult. Furthermore, implementing the worksheets make investigators aware of steps that can decrease a vulnerable adults susceptibility to undue influence.136 Training on undue influence for judges, attorneys, financial institutions, caregivers, and other organizations that interact with vulnerable adults prevents financial exploitation and increases abuse reports. Revisions to Durable Power of Attorney Statute Registration and Notification Currently, the New Hampshire has no checks on agents of a power of attorney. It is recommended that registration and notification requirements are implemented for a power of attorney. As discussed in Section IV, registration of a power of attorney adds protection to 34

vulnerable adults through an accountability mechanism. The registration would allow financial institutions and others access to a copy of the power of attorney, but also mark the time that a power of attorney is executed. Notification of the execution of the power of attorney, to designated individuals on the registration form, alerts interested parties of the power of attorney and allows them to be vigilant of an agents breach of fiduciary duty. These preventative measures protect vulnerable adults from abuse under the guise of a power of attorney. A registration fee would offset costs of maintaining a database and notifying interested parties.137 Witnesses As discussed in Section IV, the state should require witnesses when executing a power of attorney. The recommendation is that the power of attorney is witnessed by a person, other than the agent, and that it is notarized. The common practice of attorneys in New Hampshire using witnesses and notarizes substantiates their importance. Through adding this step, a principal will be given an opportunity to express any undue influence in creating the power of attorney. The witness and notary would also be positioned to report any suspected financial exploitation or to refuse the formation of the power of attorney. Thus, the witness and notary add a level of protection before the power of attorney is executed that will help prevent financial exploitation. RSA 506:6, VIII Revisions A recommendation is also given to remove RSA 506:6, VIII(b), which removes the requirement for mandatory statements of understanding by principals and agents when forming a power of attorney. The principals statement of understanding can be highly useful in educating principals about what a power of attorney does. Likewise, the agents statement of understanding is useful in educating agents of their duties and responsibilities. By removing RSA 506:6, VIII(b), the effectiveness of the statements is restored.

Section VII
Conclusion Recent New Hampshire reports show that financial exploitation cases are growing at an unprecedented rate. The states current preventative measures are insufficient to combat the pending influx of vulnerable adult exploitation, as New Hampshires older population will at least double by 2030. 35

New Hampshire can stem the tide of financial exploitation within its borders. Community members are already energetic and motivated to confront the challenges. The time has come for New Hampshire to take a stance against financial exploitation of vulnerable adults. The recommendations set forth in this note are meant to be a guide for proposed legislation and community efforts to combat New Hampshires exploitation epidemic. The multidisciplinary effort of the legislature, judiciary, state agencies, legal community, financial institutions, healthcare providers, medical professionals, and other private and non-profit organizations will create a system of legal protection to vulnerable adults and demonstrate New Hampshires commitment to combating financial exploitation.

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APPENDIX A

Undue Influence Worksheets for Police, APS, and Probate Investigators


Bennett Blum, M.D., Forensic and Geriatric Psychiatry, Tel. 520-750-8868; Internet: http://www.bennettblummd.com Inspector Tom Feledy, M.B.A., San Francisco Police Department, Tel. 415-553-1530
Notice: This publication, created by Dr. Blum and Inspector Feledy, describes the basic psychological and social conditions that affect susceptibility to undue influence, but does not replace expert analysis or a detailed course of instruction on financial exploitation and undue influence. The worksheet and I-D-E-A-L model are protected by copyright and may not be duplicated for sale or other commercial purposes, or included in agency or departmental books, manuals, or training materials, without written permission from the authors. Copying and distribution is permitted for case use only, and on condition that full authorship credit and contact information is included. It is understood that neither author is rendering legal, medical, or psychiatric advice by providing this worksheet. If expert assistance is required, please contact one of us or another competent professional. Version 08.15.02; Updates, training, and consultation are available at tel. (520) 750-8868, or www.bennettblummd.com

In This Packet: 1) Brief overview of financial exploitation 2) Brief overview of the IDEAL model of undue influence 3) Two worksheets: a. Events List Form: A reference sheet or table of contents for your investigation. b. Events Details Form: A form to describe specific events and list the source of corroborating evidence, such as documents, photographs, videotapes, etc. Introduction. Elder abuse has been called "the crime of the 21st century," and includes neglect or physical, sexual, emotional, verbal, or financial abuse. Financial abuse can be particularly difficult to investigate. In addition to simple theft and forgery, methods commonly seen in elder cases include embezzlement, false pretense, trick and device, and undue influence. Perpetrators may try to obtain the victims assets through the use of legal documents such as joint tenancy agreements, powers o f attorney, quitclaim deeds, wills, or trusts. Incident Demographics. Based on reported cases, the most common victim is a widowed elderly woman over 85 who lives alone. According to the 1998 National Elder Abuse Incidence Study, only 20% of elder abuse cases are reported. Other studies suggest as few as 7% of cases are reported. The most common abusers are the victims child or spouse, but brand new best friends, caregivers, neighbors, professional advisors, or anyone else may be a perpetrator. Elder financial abuse occurs in all racial and socioeconomic groups. In many financial exploitation cases, all of the victims assets are endangered. Consent. In order to prosecute a case where the elder seems to have willingly given their assets to the perpetrator, it is important to obtain information about two factors:

Undue Influence Worksheets for Police, APS, and Probate Investigators

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1) Undue Influence: This refers to a form of manipulation or deception used to gain assets without the true consent of the victim. Document this using the IDEAL format and worksheets, which follow. 2) Mental Capacity: This refers to the victims ability to give knowledgeable consent. Document your observations of the victims specific behaviors regarding the transactions of concern and similar activities, in order to help show the victims vulnerability or lack of informed consent. For a list of pertinent behaviors to evaluate, refer to relevant training materials. Note: Undue influence and mental capacity are separate issues. Undue influence may exist without mental impairment; an d mental impairment may exist without undue influence. Both address the issue of vulnerability. If a person takes advantage of an elders vulnerability to obtain assets, the act often can be prosecuted as a crime. Importance of a Relationship. Undue influence is the result of a relationship between the victim and the abuser. Anyone can be subject to undue influence, given the right circumstances (examples: hostages, kidnap victims, prisoners of war, cult victims.) There is no mental test for undue influence. Medical Records. People are more vulnerable to manipulation when they have certain psychological or medical conditions, such as dementia. It is important to document all medical conditions and medications. When documenting medications include doses and times taken. It is also important to obtain the persons medical records. Medical experts who have specialized training in assessment of mental capacity may then be contacted to provide detailed assessment, as needed. Criminal or Civil Remedies? Some financial abuse cases may be addressed through civil remedies in addition to, or in lieu of, criminal prosecution. Civil remedies may include litigation or petitions to Probate Court for conservatorship or guardianship. Consider referring victims and their families to social service agencies, such as Adult Protective Services, local agencies on aging, or the Public Guardian. Use of Experts. Field investigators who have completed a suitable course of instruction may use this packet to analyze and present evidence. Sometimes, however, experts in undue influence may be needed to: (1) evaluate the victims unique susceptibility to manipulation, (2) describe the impact of such manipulation upon the victims behavior and (3) conduct a retrospective, or historical, evaluation. Expertise in general medical issues is not the same as expertise in undue influence. When needed, it is important to find psychiatrists or psychologists who have specialized knowledge, skills, and experience in this field. Experts may document their findings in the form of a written report, and may also testify at depositions, court hearings, or trial.

Copyright 2002 by Bennett Blum, M.D. and Tom Feledy, M.B.A. All Rights Reserved. This document may not be reproduced, in any form, without written permission from the authors.

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The "I-D-E-A-L" Model For Analyzing Potential Undue Influence in Financial Cases
Isolation Dependence upon the perpetrator Emotional Manipulation or Exploitation of Vulnerability Acquiescence Loss
1. Isolation from pertinent information, friends, relatives, or usual advisors. Common causes that need documentation are: a. Naturally occurring, or pre-existing history of poor or non-existent relationships. Examples include: hostile relationships with family existing before the suspected abuse, a lack of living relatives, or having few friendships. b. Medical disorders affecting the body or the brain are common causes of isolation. Examples include: diabetes, heart disease, deafness, blindness, dementia, depression, or other psychiatric illnesses. c. Perpetrator interference is another common cause. Examples include: blocking telephone calls, intercepting mail, blocking visitors, or "chaperoning" (i.e., the perpetrator is present whenever victim has contact with others). d. Geographic or technological isolation is the least common cause. Victims cannot contact or have access to friends, family, relatives, or appropriate professionals. Examples include: lack of telephone or lack of transportation. 2. Dependence upon the perpetrator. Common causes that need documentation are: a. Physical dependence: Examples include food preparation, taking victim to physicians, etc. b. Emotional dependence: Examples include sweetheart scams, unemployed son moving back in with widowed mother, new boyfriend/girlfriend. c. Information dependence: Examples include professionals/advisors who misuse positions of trust to manipulate their victims.

Copyright 2002 by Bennett Blum, M.D. and Tom Feledy, M.B.A. All Rights Reserved. This document may not be reproduced, in any form, without written permission from the authors.

Undue Influence Worksheets for Police, APS, and Probate Investigators

Page 4 of 8

3.

Emotional Manipulation - Any emotion may be manipulated, but the most common emotion to be manipulated is fear. or Exploitation of Vulnerability - The perpetrator may exploit a victims known or suspected vulnerability.
a. Emotional manipulation often centers on issues of companionship/friendship and safety/security. Promises that these will be maintained if the victim complies, or threats that these will be lost if the victim disobeys, are common. b. Examine the statements and behavior of both the suspect and victim for evidence of emotional manipulation. It is especially important to document any changed or altered behavior. c. Exploitation of vulnerabilities includes behaviors such as providing alcohol to a drinker in exchange for benefits; having a vision-impaired person sign a legal document; or misrepresenting documents to the cognitively impaired.

4.

Acquiescence - The victim appears to consent or submit, but does so because of items 1, 2, and 3.
a. Document the victims history of submitting to others, in addition to his or her general behavior. b. The perpetrator may not directly ask the victim to give money or property. c. If there is no acquiescence by the victim, consider other prosecutable acts, such as embezzlement, false pretense, or trick and device.

5.

Loss This refers to actual financial loss.


a. Financial loss is usually necessary for criminal prosecution. It is helpful, but not always necessary, for civil litigation. b. Document all financial losses in chronological order, to help organize evidence associated with each loss.

Evidence of undue influence can be obtained by listing all pertinent events in the relationship between the victim and the perpetrator. These events by themselves may not appear significant, but taken together they can demonstrate a pattern of behavior revealing the existence of the I-D-E-A-L conditions in the relationship. Information about pertinent events should come from a variety of sources, including the following: a. Victim statements b. Family members statements c. Medical records d. Observations of investigators, as contained in their written reports. ALL county workers APS, police, Public Guardian, Fire/Paramedics, etc., should provide a written narrative of their involvement and what they saw, heard, and in some cases, smelled or touched. Photos or videos can add detail and objectivity. e. Caregivers, friends, and neighbors f. Service personnel such as delivery drivers, hairdressers, bank tellers, etc. Remember, the most convincing information usually comes from people who have no standing in the case.
Copyright 2002 by Bennett Blum, M.D. and Tom Feledy, M.B.A. All Rights Reserved. This document may not be reproduced, in any form, without written permission from the authors.

Undue Influence Worksheets for Police, APS, and Probate Investigators

Page 5 of 8

Events List
Events listed by ____________________________ Page ___ of ___ Instructions: Make copies of this blank page so you can document all the important events in the case. The list you submit should be in chronological order. If you choose to type this list, include the headings shown below. (For Event Details, use the form that follows.) I D Event E Event Brief description - use Details A Evidence (documents, photos, 1 2 # Date Time Location form for more info L Witness videos, etc.)

Condition(s) being described, if any: I=Isolation, D=Dependence, E=Emotional manipulation or Exploiting Vulnerability, A=Acquiescence, L=Loss. More than one condition may be indicated. If an event does not directly indicate any IDEAL condition, this column should be left blank. 2 Persons listed here should be those who actually witnessed the event. If you do not know who the witnesses were (other than the victim), explain this on the Details form, shown below.
Copyright 2002 by Bennett Blum, M.D. and Tom Feledy, M.B.A. All Rights Reserved. This document may not be reproduced, in any form, without written permission from the authors.

Undue Influence Worksheets for Police, APS, and Probate Investigators

Page 6 of 8

Event Details
Event Details listed by _____________________________ (Make additional copies of this blank form as needed) Event # __________ (from Events list) Summary Page ___ of ___

Condition Described (check one or more): Isolation Dependence Emotional Manipulation or Exploiting Vulnerability Acquiescence Loss Details (refer to witnesses and evidence listed previously):

Copyright 2002 by Bennett Blum, M.D. and Tom Feledy, M.B.A. All Rights Reserved. This document may not be reproduced, in any form, without written permission from the authors.

Undue Influence Worksheets for Police, APS, and Probate Investigators

Page 7 of 8

Example Page
Events List
Events listed by _____Investigators Name_____ Page ___ of ___ Instructions: Make copies of this blank page so you can document all the important events in the case. The list you submit should be in chronological order. If you choose to type this list, include the headings shown below. (For Event Details, use the form that follows.) I D Event E Event Brief description - use Details A Evidence (documents, photos, # Date Time Location form for more info L Witness videos, etc.) 13 4/13/01 Home of Ms. Jones (Victims daughter) Home of Mr. Jones Jr. Mr. Jones tells his son Ms. Perp will take care of me for the rest of my life if I sign over the house. Mr. Jones Jr. Letter from Mr. Jones Jr. to Ms. Jones, 4/14/02

14

6/01

Mr. Jones says Ms. Perp wants more money or she will leave him. Mr. Jones says he was lonely after his wife died, and he cannot bear to be lonely again. Ms. Perp withdraws $400.00 using Mr. Jones card.

E Mr. Jones Jr. Interview with Mr. Jones Jr. 9/18/01

15

6/17/01

4:37 PM

ATM in casino

Friend #1

Interview of Friend #1, Bank ATM records

Copyright 2002 by Bennett Blum, M.D. and Tom Feledy, M.B.A. All Rights Reserved. This document may not be reproduced, in any form, without written permission from the authors.

Undue Influence Worksheets for Police, APS, and Probate Investigators

Page 8 of 8

Example Page
Event Details
Event Details listed by Investigators Name__ (Make additional copies of this blank form as needed) Event # __15________ (from Events list) Summary Page ___ of ___

Condition Described (check one or more): Isolation Dependence Emotional Manipulation or Exploiting Vulnerability Acquiescence XX Loss Details (refer to witnesses and evidence listed previously): Friend #1 tells officers that she and Ms. Perp went to the casino together on 6/17/01 at about 3:00 PM. She and Ms. Perp played craps. Ms. Perp lost $300.00 then said Ill be back. Ms. Perp returned with several $20 bills and resumed playing until approximately 6:00 PM. According to Friend #1, she and Ms. Perp go to the casino at least once a month. Bank records for 4/17/01 show that $400.00 was withdrawn from Mr. Jones account from the ATM located in the casino at 4:37 PM.

Copyright 2002 by Bennett Blum, M.D. and Tom Feledy, M.B.A. All Rights Reserved. This document may not be reproduced, in any form, without written permission from the authors.

APPENDIX B
Vulnerable Adult Definitions Definition Vulnerable adult means an individual who is eighteen years of age or older and who is unable to protect himself from abuse, neglect or exploitation by others because of a physical or mental impairment. Vulnerable adult includes an incapacitated person as defined in 14-5101. Elderly person means a person 60 years of age or older who is suffering from the infirmities of aging as manifested by advanced age or organic brain damage, or other physical, mental, or emotional dysfunctioning, to the extent that the ability of the person to provide adequately for the person's own care or protection is impaired. An individual age 18 or over who, because of age, developmental disability, mental illness, or physical disability requires supervision or personal care or lacks the personal and social skills required to live independently. A person 18 years of age or older who: (a) Suffers from a condition of physical or mental incapacitation because of a developmental disability, organic brain damage or mental illness; or (b) Has one or more physical or mental limitations that restrict the ability of the person to perform the normal activities of daily living. Vulnerable adult means a person 18 years of age or older who resides in a community setting and who, because of a physical or mental illness, disability or deficiency, lacks sufficient understanding or capacity to make, communicate, or carry out decisions concerning his well-being and is the subject of abuse, neglect or exploitation. "Vulnerable elderly person" a person 60 years of age or older who is sufferig from a disease or infirmity associated with advanced age and manifested by demonstrable physical, mental, or emotional dysfunction to the extent that the person is incapable of adequately providing for his or her own health or personal care. (Elder Adult) A person 60 years of age or older who is not able to provide for the social, medical, psychiatric, psychological, financial, or legal services necessary to safeguard the person's rights and resources and to maintain the person's physical and mental well-being. Is impaired due to brain damage, infirmities of aging, or a physical, mental, or developmental disability that results in some impairment of the individual's ability to: provide for his own care without assistance, including the provision of food, shelter, clothing, health care, supervision, or management of finances; or protect himself from abuse, neglect, or exploitation an elder adult (65 or older) or an adult 18 or older who has a mental or physical impairment which substantially affects that person's ability to: provide personal protection; provide necessities such as food, shelter, clothing, or medical or other health care; obtain services necessary for health, safety, or welfare; carry out the activities of daily living; mangage the adult's own resources; or comprehend the nature and consequences of remaining in a situation of abuse, neglect, or exploitation

State AZ

FL

MI

NV

NJ

NY

NC

VT

UT

44

APPENDIX C

States' Elderly Percentage Rankings


1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 Florida West Virginia Pennsylvania Maine Iowa Hawaii North Dakota South Dakota Arkansas Montana Rhode Island Vermont Delaware Alabama Ohio Connecticut Missouri Nebraska Oklahoma Massachusetts New York Wisconsin South Carolina Oregon Arizona 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 New Jersey Kentucky Tennessee New Mexico Kansas Michigan New Hampshire Indiana Mississippi Minnesota North Carolina Wyoming Louisiana Illinois Virginia Maryland Washington Idaho Nevada California Colorado Texas Georgia Utah Alaska

States with Elderly Populations Over 1 Million


1 2 3 4 5 6 7 8 9 10 California Florida New York Texas Pennsylvania Ohio Illinois Michigan North Carolina New Jersey 4.2 Million 3.2 Million 2.6 Million 2.6 Million 1.9 Million 1.6 Million 1.6 Million 1.3 Million 1.2 Million 1.1 Million

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APPENDIX D
State Criminal Statute Civil Statute Kind of Statute Exploitation of a Vulnerable Adult Language Vulnerable adult means an individual who is eighteen years of age or older and who is unable to protect himself from abuse, neglect or exploitation by others because of a physical or mental impairment. Vulnerable adult includes an incapacitated person as defined in 14-5101. Dependent adult means any person between the ages of 18 and 64 years who resides in this state and who has physical or mental limitations that restrict his or her ability to carry out normal activities or to protect his or her rights, including, but not limited to, persons who have physical or developmental disabilities, or whose physical or mental abilities have diminished because of age. Age 65 or older Age 60 or older Disabled adult means a person 18 years of age or older who suffers from a condition of physical or mental incapacitation due to a developmental disability, organic brain damage, or mental illness, or who has one or more physical or mental limitations that restrict the person's ability to perform the normal activities of daily living. Elderly person means a person 60 years of age or older who is suffering from the infirmities of aging as manifested by advanced age or organic brain damage, or other physical, mental, or emotional dysfunctioning, to the extent that the ability of the person to provide adequately for the person's own care or protection is impaired. Violation Result Actual Damages and reasonable costs and Attorney feesinheritance rights may be forfeited

AZ

No

Yes

CA

Yes-Mostly Civil

Yes

Financial Exploitation of a Dependent Adult

CT

Yes

No

Elder Abuse- includes elder

Felony- imprisonment and fine

FL

Yes

Yes

Financial Exploitation of an elderly or disabled

Felony- imprisonment and fine

Elder

46

IL

Yes

Yes

Exploitation- elderly or disabled

Person w/disability means a person who suffers from a physical or mental impairment resulting form disease, injury, functional disorder or congenital condition that impairs the individual's mental or physical ability to independently manage his or her property or financial resources, or both Age 60 or older Incapacitated adult means any adult who is impaired by reason of mental illness, mental deficiency, physical illness or disability to the extent that the individual lacks sufficient understanding or capacity to make or communicate responsible decisions concerning that individual's person, or to the extent the adult can not effectively manage or apply that individual's estate to necessary ends

Felony- imprisonment and fine- Treble Civil Damages, stripped of property or inheritance as if they died before victim

Elder

ME

No

No- Common law

Adult Protective Services ActIncapacitated

Dependent Adult No specific statute address financial exploitation No specific statute address financial exploitation

dependent adult means an adult who has a physical or mental condition that substantially impaires the adult's ability to adequately provide for that adult's daily needs. Age 60 or older Larceny- with enhanced penalties for elders

MA

No- Common law

Elder Vulnerable AdultPhysical Harm or Serious Mental Harm Exploitation

MI

No- Common law

An individual age 18 or over who, because of age, developmental disability, mental illness, or physical disability requires supervision or personal care or lacks the personal and social skills required to Imprisonment and live independently. Fines Exploitation means an action that involves the misuse of an adult's funds, property, or personal dignity by another person.

47

NV

Yes

No

Financial Exploitation of an Older Person or Vulnerable Adult

Age 60 or older; Vulnerable person means a person 18 years of age or older who: (a) Suffers from a condition of physical or mental incapacitation because of a developmental disability, organic brain damage or mental illness; or (b) Has one or more physical or mental limitations that restrict the ability of the person to perform the normal activities of daily living. Exploitation means any act taken by a person who has the trust and confidence of an older person or a vulnerable person or any use of the power of attorney or guardianship of an older person or a vulnerable person to: (a) Obtain control, through deception, intimidation or undue influence, over the older person's or vulnerable person's money, assets or property with the intention of permanently depriving the older person or vulnerable person of the ownership, use, benefit or possession of his or her money, assets or property; or (b) Convert money, assets or property of the older person or vulnerable person with the intention of permanently depriving the older person or vulnerable person of the ownership, use, benefit or possession of his or her money, assets or property. As used in this subsection, undue influence does not include the normal influence that one member of a family has over another.

Misdemeanor - Felony fine and/or imprisonment

Exploitation

NH

No

Common Law

Incapacitated

the physical, mental, or emotional ability of a person is such that he is unable to manage personal, home, or financial affairs in his own best interest, or he is unable to act or unable to delegate responsibility to a responsible caretaker or caregiver.

Prosecuted under Theft statutes, no particular provision

48

Exploitation

means the illegal use of an incapacitated adult's person or property for another person's profit or advantage, or the breach of a fiduciary relationship through the use of a person or a person's property for any purpose not in the proper and lawful execution of a trust, including, but not limited to, situations where a person obtains money, property, or services from an incapacitated adult through the use of undue influence, harassment, duress, deception, or fraud. see statute the act or process of illegally or improperly using a person or his resources for another person's profit or advantage a person 60 years of age or older who is sufferig from a disease or infirmity associated with advanced age and manifested by demonstrable physical, mental, or emotional dysfunction to the extent that the person is incapable of adequately providing for his or her own health or personal care.

Prosecuted under Theft statutes, no particular provision

NJ

No

Common Law

Vulnerable Adult Exploitation

No- not for financial exploitation NY Common Law

Vulnerable Elderly Person

NC

yes

Common Law

Financial Exploitation of an Elder Adult

A person 60 years of age or older who is not able to provide for the social, medical, psychiatric, psychological, financial, or legal services necessary to safeguard the person's rights and resources and to maintain the person's physical and mental well-being. A person 18 years of age or older or a lawfully emancipated minor who is present in the State of North Carolina and who is physically or mentally incapacitated as defined in G.S. 108A101(d). Age 65 or older

Felony- either F, G, or H

Disabled Adult

OH

Yes- Increased theft statute

Common Law

Elderly Disabled Adult Impairment of body or mind that makes the person unable to work

Felony- classed upon amount of money taken

49

PA

No- Theft statute only, but does not address financial exploitation, elderly, or vulnerable adults

60 years or older Common Law Older Adult

Prosecuted under Theft statutes, no particular provision

RI

Yes- both criminal and civil remedies

Common Law

Financial Exploitation of an elder person

Knowingly, by deception or intimidation, obtains or uses, or endeavors to obtain or use, an elder person's funds, assets or property with the intent to temporarily or permanently deprive the elder person of the use, benefit, or possession of the funds, assets or property, or to benefit someone other than the elder person by a person who: i)Stands in a position of trust and confidence with the elder person; or ii) Has a business relation ship with the elder person... an act or process of taking pecuniary advantage of impaired persons by use of undue influence, harassment, duress, deception, false representation, false pretenses, or misappropiration of funds criminalizes breach of fiduciary duty held by- trustee, guardian, adminstrator, executor, conservator, reciever, or attorney in fact or agent under a durable power of attorney

Felony- Fine or Imprisonment

Financial Exploitation of an Adult w/severe impairments Yes/No- There is no financial exploitation statute. Breach of fiduciary statute exists

TX

Yes-Breach of fiduciary

Fiduciary Statute

Fine, imprisonment up to 5 years and full restitution. Mandatory professional counseling for behavior Fine and/or incarceration-Increased penalities for breach against an elderly person

UT

Yes

No

Elderly Financial Exploitation of an elder adult or adult with a mental or physical impairment

Age 65 or older Felony- varies per amount

50

Vulnerable Adult

an elder adult (65 or older) or an adult 18 or older who has a mental or physical impairment which substantially affects that person's ability to: provide personal protection; provide necessities such as food, shelter, clothing, or medical or other health care; obtain services necessary for health, safety, or welfare; carry out the activities of daily living; mangage the adult's own resources; or comprehend the nature and consequences of remaining in a situation of abuse, neglect, or exploitation Is impaired due to brain damage, infirmities of aging, or a physical, mental, or developmental disability that results in some impairment of the individual's ability to: provide for his own care without assistance, including the provision of food, shelter, clothing, health care, supervision, or management of finances; or protect himself from abuse, neglect, or exploitation

VT

Yes

Common Law

Financial Exploitation of a Vulnerable Adult

Fine up to $10,000 and/or incarceration

51

ENDNOTES
1

J.D. Candidate, 2014, Univ. of N.H. School of Law; B.A., 2005, Westminster College. This note was written for NH Legal Assistance. The Cindy Lonergan Elder Law and Patients' Rights Fellow award funded the work dedicated to this note. The note is written in memory of my grandmother Inga Winnie Baker. 2 U.S. Census Bureau, The 2012 Statistical Abstract (2012), Resident Population by Sex and Age, http://www.census.gov/compendia/statab/2012/tables/12s0007.pdf; U.S. Census Bureau, The 2012 Statistical Abstract (2012), Resident Population by Age and State: 2010, http://www.census.gov/compendia/statab/2012/tables/12s0016.xls. 3 See app. B 4 Id. 5 Arizona, Nevada, and Utah were the states included based upon their financial exploitation statutes or vulnerable adult definitions. 6 See app. A. 7 U.S. Census Bureau, Resident Population by Sex and Age, supra note 2. 8 Id. 9 Richard Cordray, Dir., Consumer Fin. Prot. Bureau, Richard Cordray, Elder Abuse & Fin. Exploit. Symposium (June 14, 2012), available at http://www.ltcombudsman.org/white-house-elder-abuse-symposium; MetLife, The MetLife Study of Elder Financial Abuse: Crimes of Occasion, Desperation, and Predation Against Americas Elders (2011). 10 NCEA, Abuse of Adults Aged 60+ 2004 Survey of Adult Protective Services (2006). 11 NCEA, Elder Abuse Prevalence and Incidence (2005). 12 NCOA, White House Holds Historic Symposium on Elder Abuse (June 15, 2012), http://www.ncoa.org/publicpolicy-action/policy-news/white-house-holds-historic.html. 13 Id. 14 Id. 15 The Natl Long-Term Care Ombudsman Res. Ctr., White House World Elder Abuse Awareness Day Commemoration, http://www.ltcombudsman.org/white-house-elder-abuse-symposium (last visited Jul. 6, 2012). 16 Bennett Blum, Undue Influence Worksheets for Police, APS, and Probate Investigators 2-3 (2002), available at http://www.azfid.org/content/ElderAbuse. 17 Id. 18 Id. at 4. 19 Susan Staples, Dir., Merrimack Cnty. Cmty. Coord. Response Team, Where Faith and Safety Meet (June 22, 2012). 20 Id. 21 Ron Acierno, Hernandez-Tejeda Melba, Wendy Muzzy & Steve Kenneth, U.S. Dept of Justice, National Elder Mistreatment Study 4 (2009). 22 Safe Havens Interfaith Pship Against Dom. Violence & The Natl Clearinghouse on Abuse in Later Life, Where Faith and Safety Meet: Faith Communities Respond to Elder Abuse 7 (2010). 23 John F. Wasik, The Fleecing of Americas Elderly, Consumers Digest, March/April 2000 at 77. 24 Restatement (Second) of Torts 874 (1979). 25 Id. 26 Restatement (Second) of Torts 222A (1965). 27 N.H. Rev. Stat. Ann. 631:8, II, III (2012). 28 Mass. Gen. Laws Ann. ch.19A, 14 (West 2012); Mass. Gen. Laws Ann. ch.266 30(5) (West 2012); W. Va. Code Ann. 61-2-29b (West 2012). 29 The titles listed are not used in the various statutes, but are used to differentiate the various types of financial exploitation statutes used in the states compared (make as note perhaps). States that did not have financial exploitation statutes also had definitions for elderly, dependent, or vulnerable adults. 30 W. Va. Code Ann. 61-2-29b, (a), (f) (West 2012). 31 Carolyn L. Dessin, Financial Abuse of the Elderly: Is the Solution the problem? , 34 McGeorge L. Rev. 267, 30001 (2003). 32 Id. 33 Vt. Stat. Ann. tit. 13, 1375(8) (West 2012). 34 Ariz. Rev. Stat. Ann. 46-451, A(9) (2012). 35 Cal. Welf. & Inst. Code 15657.5, (a) (West 2012). 36 Id. at 15657.5, (b). 37 Cal. Prob. Code 4231.5, (c) (West 2012). 38 Ariz. Rev. Stat. Ann. 46-451, B (2012). 39 Id. at 46-451, C.

52

40 41

See generally, N.J. Stat. Ann. (West 2012). Id. 42 Ohio Rev. Code. Ann. 2913.02, A(3) (West 2012). 43 Tex. Penal Code Ann. 32.45 (b) (West 2012). 44 Mass. Gen. Laws Ann. ch. 266 30(5) (West 2012). 45 Supra note 31, at 825.103. 46 Id. 47 Nev. Rev. Stat. Ann. 200.5099, 3 (West 2012). 48 Supra note 34, at tit. 13 1380. 49 Id. 50 720 Ill. Comp. Stat. Ann. 5/17-56 (West 2012). 51 Id. 52 Id. at 755 Ill. Comp. Stat. Ann. 5/2-6.6. 53 20 Conn. Prac., Conn. Elder Law 11:6 (2011). 54 Id. 55 Id. 56 Tracy Culberson personal interview 57 Johnson, supra note 16, at 36. 58 Johnson, supra note 16, at 36. 59 Id. 60 Johnson, supra note 16, at 49. 61 FAST Financial Abuse Specialist Team, Wise & Healthy Aging, http://www.wiseandhealthyaging.org/cms/1106.html (last visited Aug. 7, 2012); see also NCPEA, Guidelines for Establishing and Coordinating a Fiduciary Abuse Specialty Team, http://www.preventelderabuse.org/communities/fast.html (last visited Aug. 7, 2012). 62 Id. 63 Johnson, supra note 16, at 37. 64 Id. at 44. 65 Id. at 45. 66 Id. at 44. 67 Id. at 46. 68 Lisa Nerenberg, NCEA, Daily Money Management Programs- A Protection Against Elder Abuse 4-5 (2003). 69 Id. at 5-6. 70 Id. 71 Id. at 14. 72 Id. at 4. 73 Johnson, supra note 16, at 45. 74 Jennifer L. Rhein, No One in Charge: Durable Powers of Attorney and the Failure to Protect Incapacitated Principals, 17 Elder L.J. 165, 195-97 (2009). 75 Id. at 195. 76 Id. 77 Supra note 35, at 14-5501. 78 Rhein, supra note 76, at 197. 79 Id. 80 Id. 81 Id. 82 Utah Code Ann. 75-5-501, (2)(a) (West 2012). 83 Id. at 75-5-501, (6). 84 Johnson, supra note 16, at 45. 85 Id. 86 Id. 87 Supra note 28, at 161-F:49. 88 Id. 89 Johnson, supra note 16, at 36. 90 Id. 91 Id. at 45. 92 Blum, supra note 17, at 5-8. 93 Johnson, supra note 16, at 45-46.

53

94

Data for abuse cases was requested and received from the New Hampshire Bureau of Elderly and Adult Services from 2004-2011. The data was broken down by year, type of abuse, and age. The calculated percentages were represent the change between 2004 and 2011 figures. 95 Id. 96 Steve Norton, NH Center for Public Policy, New Hampshires Silver Tsunami: Aging and the Health Care System 8-9 (2011). 97 Kenneth M. Johnson, Carsey Inst., New Hampshire Demographic Trends in the Twenty-First Century (2012). 98 Supra note 28, at 161-F:42. 99 Id. at 161-F:43, VII. 100 Id. at 161-F:43, IV. 101 See generally, N.H. Rev. Stat. Ann. T. LXII, Ch. 637-38 (2012). 102 Supra note 28, at 651:63. 103 Id. at 506:6, I. 104 Id. at 477:9. 105 Id. at 506:6, VI-VII. 106 Id. at 506:6, VIII. 107 Id. at 506:7, IV. 108 Id. 109 Id. at 506:7, III. 110 Id. at 506:7, I. 111 Id. 112 Id. at 506:7, II. 113 Grant No. 2009-EW-AX-K003 114 The N.H. Pship for the Prot. of Older Adults, Merrimack County Outreach & Services 1-2 (2012). 115 Merrimack Cnty. Coord. Cmty. Response Team, Working Statement of Mission, Purpose and Goals, (2011). 116 Id. 117 Daily Money Mgmt. Serv. in N.H., ServiceLink, http://www.nh.gov/servicelink/ (follow Search For Services hyperlink; then search Money; then follow the Daily Money Management hyperlink). 118 Supra note 28, at 161-F:46, I. 119 Id. at 161-F:46, II. 120 Id. at 161-F:49, I. 121 Id. at 161-F:49, VIII. 122 DHHS, BEAS, New Hampshire State Plan on Aging October 1, 2011-September 30, 2015 10 (2011). 123 Supra note 35, at 46-451, A; supra note 84, at 76-5-111, (1)(s); supra note 34, at tit. 13, 1375(8). 124 Supra note 28, at 161-F:43, IV; supra note 51, at 720 Ill. Comp. Stat. Ann. 5/17-56. 125 Supra note 31, at 825.103. 126 Id.; supra note 28, at 651:2, II,IV(a). 127 Supra note 31, at 825.103; supra note 28, at 651:2, II,IV(a). 128 Supra note 31, at 825.103; supra note 28, at 651:2, II,IV(a). 129 Supra note 51, at 720 Ill. Comp. Stat. Ann. 5/17-56, (g). 130 Supra note 35, at 46-456, C. 131 Supra note 31, at 825.103. 132 Supra note 28, at 651:2, II,IV(a). 133 Supra note 51, at 720 Ill. Comp. Stat. Ann. 5/17-56, (g). 134 Supra note 35, at 46-456, C. 135 Joanne Otto, Patricia Ianni Stanis & Kevin W. Marlatt, Natl Assn of Adult Prot. Serv. Admr, Natl Ctr. On Elder Abuse, State Adult Protective Services Program Responses to Financial Exploitation of Vulnerable Adults 2003 (2003). 136 Blum, supra note 17, at 2. 137 Rhein, supra note 76, at 197-98.

54