POA impasse with possible financial abuse of dementia patient
April 20, 2022 2:58 AM Subscribe
I'm struggling with how to formulate this question because there are so many details, but I'm hoping someone out there can help provide some insight or advice. This is regarding an elderly aunt who's been diagnosed with a form of dementia that will almost certainly kill her in the next 5-10 years, and lives in the state of California, and a financial advisor we suspect might be taking advantage of her. More details inside.
My aunt currently lives alone and has a part-time caretaker who's currently being funded out of pocket by other relatives, but this is expensive, and the hope was that we could use my aunt's substantial savings to pay for the caretaker. She does not know the caretaker is being paid. She thinks this is a friend who is just coming to check on her out of the goodness of her heart.
Like most people, I'm sure, my aunt absolutely does not want to go to a nursing home.
My aunt gave her nephew/my cousin power of attorney when she was diagnosed a few years ago, but before she had declined too badly. He has been trying to get access to her bank accounts to help with the financial planning and eventually withdraw money to pay her caretaker.
She has several bank accounts, and the one where she has most of her money is an investment account presided over by a possibly shady financial advisor. We do not have proof of this but my cousin suspects (as he saw a list of trades that seemed much bigger than it should for a single year, for a woman who is probably in the last decade of her life and should currently be in low-risk investments) that the financial advisor is taking advantage of her by trading excessively using her money and benefitting from the commissions. He apparently drives her to H&R Block to get her taxes done, which seems pretty out of the ordinary for a financial advisor to do for a random client.
My cousin got POA access to an account at Bank #1 to check on her funds. So far, so good. He met with the maybe-shady financial advisor at Bank #2 and the guy wanted him to sign an arbitration agreement and disclosure of his own net worth before they would grant POA access to the Bank #2 account. My cousin, who is a lawyer himself, was not willing to do this. He is worried that the financial advisor is going to paint him as trying to steal my aunt's money since he has less money than her, and he doesn't want to agree to Bank #2's arbitration terms. So his access to Bank #2's accounts is currently blocked unless he signs this extra paperwork.
After that meeting with the Bank #2 financial adviser, we found out from the caretaker that my aunt went to Bank #2, and the next day removed my cousin from having access to Bank #1, which she can apparently still do pending a full conservatorship, even though doctors have deemed her incompetent to handle her own affairs. So we think the financial advisor told her to do this and that she is now planning to move all her money into the Bank #2 account that he controls.
She plans to leave her liquid assets to charity and her house and cars to me and my cousin.
My cousin is afraid that the end result of trying to gain full conservatorship will be that the financial advisor will attempt to weigh in and block him (the fact that POA was only designated after her diagnosis is potentially problematic); also, apparently anyone designated as a beneficiary in her will gets a say in the conservatorship hearing, and so, since she has a lot of money, the charities will probably appoint lawyers to advocate for an outcome that puts as much as possible into the liquid assets they'll eventually receive (i.e. block my cousin from conservatorship, appoint a public guardian, sell her house and cars and move her into the cheapest nursing home possible).
Or if he lets Adult Protective Services step in and appoint a public advocate for her, again, he's worried they will probably do the same thing--move her out of her house into a cheap nursing home, sell her house, financial advisor and charities will profit off it, family will get nothing. Neither of us cares about the house that hugely but it seems awful to essentially step back and have outsiders/bad actors taking advantage of her and profiting off her end of life, and it goes against her desire to stay in her own house as long as possible and to leave the house to me.
My cousin and I feel that the ideal situation would be for her to stay in her home as long as possible with the caretaker (and hopefully 1-2 others) taking care of her full time, and using her own money to pay for her care, then going to a nursing home once she needs care 24/7, and selling the house only if it's needed. However, since she doesn't know that her caretaker is being paid, it would be very hard to explain why money is coming out of her account. The financial advisor would almost certainly flag to her that her nephew is "stealing her money" if he starts to withdraw money from the accounts.
I called APS to try and ask about this, and they would essentially only do something if we put in a report, but I hesitate to do this since I think the financial advisor is probably technically operating within the law but in bad faith, and having them start to investigate might cause him to throw up yet more roadblocks. My cousin has a call in with an elder care attorney but of course the consulting fees are very expensive so he was trying to get my input on it before talking to them. I have no idea what to do and so I was hoping someone here could offer advice--maybe not even with the specific situation but perhaps another option for resources/advice/strategy.
Is there a way to get the financial advisor flagged/audited for ethics somehow? Or get a new financial advisor assigned? My aunt is very paranoid but also very naive in terms of money. I'm sure she told him to just do whatever was best for her and so he essentially has free rein over her large portfolio.
Would it make sense to try and explain the caretaker situation to my aunt? (I'm worried this would feel like a betrayal to her and then she would kick out the caretaker and nobody would be taking care of her at all... it's important to us to have a trusted party in the house checking on her and taking care of her.) There is a lot she doesn't understand anymore.
Would it make sense to sign the paperwork my cousin is hesitating about, that will put a lot more power into the hands of the banker that we suspect is taking advantage of her? Apparently without conservatorship, my aunt could just remove him from this account as well and so it would end up as an endless game of filing and re-filing the paperwork.
Should I file an official APS report? They've been involved with her case already but not from the financial side.
Should I or someone else in my family try to get conservatorship? My cousin was the one designated with POA so I assume it would be easiest for him despite the complication with the timing on when he was designated. I live out of state and don't especially want to take on full responsibility as this would be really hard logistically for me. I'm not sure anyone else in the family would be willing.
The whole thing is already very complicated and it feels doubly so with the resistance being put up by the financial adviser. Any advice would be welcome. Thank you!
My aunt currently lives alone and has a part-time caretaker who's currently being funded out of pocket by other relatives, but this is expensive, and the hope was that we could use my aunt's substantial savings to pay for the caretaker. She does not know the caretaker is being paid. She thinks this is a friend who is just coming to check on her out of the goodness of her heart.
Like most people, I'm sure, my aunt absolutely does not want to go to a nursing home.
My aunt gave her nephew/my cousin power of attorney when she was diagnosed a few years ago, but before she had declined too badly. He has been trying to get access to her bank accounts to help with the financial planning and eventually withdraw money to pay her caretaker.
She has several bank accounts, and the one where she has most of her money is an investment account presided over by a possibly shady financial advisor. We do not have proof of this but my cousin suspects (as he saw a list of trades that seemed much bigger than it should for a single year, for a woman who is probably in the last decade of her life and should currently be in low-risk investments) that the financial advisor is taking advantage of her by trading excessively using her money and benefitting from the commissions. He apparently drives her to H&R Block to get her taxes done, which seems pretty out of the ordinary for a financial advisor to do for a random client.
My cousin got POA access to an account at Bank #1 to check on her funds. So far, so good. He met with the maybe-shady financial advisor at Bank #2 and the guy wanted him to sign an arbitration agreement and disclosure of his own net worth before they would grant POA access to the Bank #2 account. My cousin, who is a lawyer himself, was not willing to do this. He is worried that the financial advisor is going to paint him as trying to steal my aunt's money since he has less money than her, and he doesn't want to agree to Bank #2's arbitration terms. So his access to Bank #2's accounts is currently blocked unless he signs this extra paperwork.
After that meeting with the Bank #2 financial adviser, we found out from the caretaker that my aunt went to Bank #2, and the next day removed my cousin from having access to Bank #1, which she can apparently still do pending a full conservatorship, even though doctors have deemed her incompetent to handle her own affairs. So we think the financial advisor told her to do this and that she is now planning to move all her money into the Bank #2 account that he controls.
She plans to leave her liquid assets to charity and her house and cars to me and my cousin.
My cousin is afraid that the end result of trying to gain full conservatorship will be that the financial advisor will attempt to weigh in and block him (the fact that POA was only designated after her diagnosis is potentially problematic); also, apparently anyone designated as a beneficiary in her will gets a say in the conservatorship hearing, and so, since she has a lot of money, the charities will probably appoint lawyers to advocate for an outcome that puts as much as possible into the liquid assets they'll eventually receive (i.e. block my cousin from conservatorship, appoint a public guardian, sell her house and cars and move her into the cheapest nursing home possible).
Or if he lets Adult Protective Services step in and appoint a public advocate for her, again, he's worried they will probably do the same thing--move her out of her house into a cheap nursing home, sell her house, financial advisor and charities will profit off it, family will get nothing. Neither of us cares about the house that hugely but it seems awful to essentially step back and have outsiders/bad actors taking advantage of her and profiting off her end of life, and it goes against her desire to stay in her own house as long as possible and to leave the house to me.
My cousin and I feel that the ideal situation would be for her to stay in her home as long as possible with the caretaker (and hopefully 1-2 others) taking care of her full time, and using her own money to pay for her care, then going to a nursing home once she needs care 24/7, and selling the house only if it's needed. However, since she doesn't know that her caretaker is being paid, it would be very hard to explain why money is coming out of her account. The financial advisor would almost certainly flag to her that her nephew is "stealing her money" if he starts to withdraw money from the accounts.
I called APS to try and ask about this, and they would essentially only do something if we put in a report, but I hesitate to do this since I think the financial advisor is probably technically operating within the law but in bad faith, and having them start to investigate might cause him to throw up yet more roadblocks. My cousin has a call in with an elder care attorney but of course the consulting fees are very expensive so he was trying to get my input on it before talking to them. I have no idea what to do and so I was hoping someone here could offer advice--maybe not even with the specific situation but perhaps another option for resources/advice/strategy.
Is there a way to get the financial advisor flagged/audited for ethics somehow? Or get a new financial advisor assigned? My aunt is very paranoid but also very naive in terms of money. I'm sure she told him to just do whatever was best for her and so he essentially has free rein over her large portfolio.
Would it make sense to try and explain the caretaker situation to my aunt? (I'm worried this would feel like a betrayal to her and then she would kick out the caretaker and nobody would be taking care of her at all... it's important to us to have a trusted party in the house checking on her and taking care of her.) There is a lot she doesn't understand anymore.
Would it make sense to sign the paperwork my cousin is hesitating about, that will put a lot more power into the hands of the banker that we suspect is taking advantage of her? Apparently without conservatorship, my aunt could just remove him from this account as well and so it would end up as an endless game of filing and re-filing the paperwork.
Should I file an official APS report? They've been involved with her case already but not from the financial side.
Should I or someone else in my family try to get conservatorship? My cousin was the one designated with POA so I assume it would be easiest for him despite the complication with the timing on when he was designated. I live out of state and don't especially want to take on full responsibility as this would be really hard logistically for me. I'm not sure anyone else in the family would be willing.
The whole thing is already very complicated and it feels doubly so with the resistance being put up by the financial adviser. Any advice would be welcome. Thank you!
Agree that you should report the financial advisor to his firm, but you can also look at Broker Check to see if he is registered with FINRA. Brokercheck will also show if he has any previous disciplinary history, which may be interesting to you. If he is registered with FINRA, someone in your family should also call the FINRA Senior Helpline . They may have additional steps you can take, and you can file a regulatory tip there with FINRA. While I believe the tip can be anonymous, it would be most useful if the person making it was willing to provide their contact information and to provide information about your aunt.
Reporting him to both his firm and, if applicable, to FINRA, should prompt his firm to take a closer look at her account. If the trading is suspicious, this could result in a number of things, including a new representative. The firm may also seek to make a financial settlement with your aunt or might not. Your aunt (or someone on her behalf) may also be able to initiate a FINRA arbitration against the rep and/or the firm (see https://www.finra.org/arbitration-mediation). There are many lawyers who primarily represent clients in FINRA arbitrations and most will do a free consultation, if you want to go that route.
posted by Caz721 at 4:43 AM on April 20, 2022 [9 favorites]
Reporting him to both his firm and, if applicable, to FINRA, should prompt his firm to take a closer look at her account. If the trading is suspicious, this could result in a number of things, including a new representative. The firm may also seek to make a financial settlement with your aunt or might not. Your aunt (or someone on her behalf) may also be able to initiate a FINRA arbitration against the rep and/or the firm (see https://www.finra.org/arbitration-mediation). There are many lawyers who primarily represent clients in FINRA arbitrations and most will do a free consultation, if you want to go that route.
posted by Caz721 at 4:43 AM on April 20, 2022 [9 favorites]
My cousin has a call in with an elder care attorney but of course the consulting fees are very expensive so he was trying to get my input on it before talking to them.
I had a similar situation, complicated by the fact that I jointly owned property with my aunt and a bad-faith guardian was trying to force me to sell. Anyway, hiring a good lawyer was really the only way, as I'm sure your cousin knows. I'm just responding to say that my attorney was able to get his fees covered by the estate because ultimately my hiring him saved the estate a huge amount of money because he was able to stop a frivolous lawsuit against me (the judge would have had to agree to that expenditure, and my lawyer showed why it was a very bad idea). If you and your cousin can front the fees, it sounds like your aunt has enough to cover them eventually. I'm not a lawyer and there are some important differences, so this is just a data point.
I also cannot tell you what it did for my own mental health to know I had a good lawyer who was dealing with all of this. Ultimately, there was some shit that we just had to let go of though. My aunt refused to make decisions when she was able to, she was persuaded, in her dementia, by an unscrupulous relative, and sadly, there were consequences she would not have wanted.
posted by FencingGal at 4:45 AM on April 20, 2022 [1 favorite]
I had a similar situation, complicated by the fact that I jointly owned property with my aunt and a bad-faith guardian was trying to force me to sell. Anyway, hiring a good lawyer was really the only way, as I'm sure your cousin knows. I'm just responding to say that my attorney was able to get his fees covered by the estate because ultimately my hiring him saved the estate a huge amount of money because he was able to stop a frivolous lawsuit against me (the judge would have had to agree to that expenditure, and my lawyer showed why it was a very bad idea). If you and your cousin can front the fees, it sounds like your aunt has enough to cover them eventually. I'm not a lawyer and there are some important differences, so this is just a data point.
I also cannot tell you what it did for my own mental health to know I had a good lawyer who was dealing with all of this. Ultimately, there was some shit that we just had to let go of though. My aunt refused to make decisions when she was able to, she was persuaded, in her dementia, by an unscrupulous relative, and sadly, there were consequences she would not have wanted.
posted by FencingGal at 4:45 AM on April 20, 2022 [1 favorite]
You need legal advice. I know it's expensive, but so is the potential outcome you're concerned about. Here's a comment from an attorney in a similar thread that may help you. (I also commented in that thread about a similar situation, but mine was more about logistics.)
I wish you all the best. I know this is so hard.
posted by ImproviseOrDie at 5:47 AM on April 20, 2022 [2 favorites]
I wish you all the best. I know this is so hard.
posted by ImproviseOrDie at 5:47 AM on April 20, 2022 [2 favorites]
Get a lawyer, but do not wait to do that to contact this "financial advisor"'s firm and FINRA (if registered). To be honest, any investigation may be perfunctory. But the sooner you put the firm on notice, the more likely you are to be able to recover from them should shenanigans be happening.
posted by praemunire at 7:35 AM on April 20, 2022 [1 favorite]
posted by praemunire at 7:35 AM on April 20, 2022 [1 favorite]
I know a very ethical Estate Planning Attorney that has practiced law in California for over thirty years and can give you a consultation online if you need assistance. Email me if you would like his contact information. He is very progressive, and has a lot of experience with conservatorships for people with dementia.
posted by effluvia at 8:15 AM on April 20, 2022 [3 favorites]
posted by effluvia at 8:15 AM on April 20, 2022 [3 favorites]
You seem extremely suspicious of this financial advisor (and the charities your aunt named as beneficiaries) based on not very much evidence. If you imagine that the advisor actually *does* have your aunt's best interests at heart and suspects that your cousin might be trying to take advantage of her, his actions make complete sense. It seems like perhaps a less-confrontational approach might be helpful before escalating to an adversarial position: have you tried asking him about the suspicious trading? (Do you even know he's being paid on commission based on account activity? Wealth managers associated with banks often are not.) Have you asked him to pay the caretaker out of your aunt's funds, and if so, what did he say?
posted by phoenixy at 11:50 AM on April 20, 2022 [1 favorite]
posted by phoenixy at 11:50 AM on April 20, 2022 [1 favorite]
Do you even know he's being paid on commission based on account activity? Wealth managers associated with banks often are not.
They don't have to be if they're getting soft funds. E.g., a front-loaded fund basically returns that front load to the salesperson.
At any rate, this "financial advisor" should not have a problem being transparent with someone appointed as power of attorney for his client.
posted by praemunire at 5:37 PM on April 20, 2022 [4 favorites]
They don't have to be if they're getting soft funds. E.g., a front-loaded fund basically returns that front load to the salesperson.
At any rate, this "financial advisor" should not have a problem being transparent with someone appointed as power of attorney for his client.
posted by praemunire at 5:37 PM on April 20, 2022 [4 favorites]
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