As people age, the ability to resist undue influence decreases. Predators use undue influence to overcome a persons own natural inclinations and imposes the predators wishes on senior adults that results in an involuntary estate plan, contrary to the persons long held wishes. Undue influence deprives a person of the right to be the one to determine who should receive his or her estate at death. California law allows its residents with the freedom to dispose of their property as desired, even if its on a whim, provided that the disposition is voluntary; that is, by the persons own choice.
WHO ARE PREDATORS?
Predators are people who seek to take something from someone for themselves. Predators influence elder adults to change their long-held estate plan to benefit themselves. They are often people who appear at first to be kind, friendly, helpful, and caring; however, their ultimate goal is to get the senior to give them his or her money or property, either during life, or at death.
Predators can be strangers, neighbors, or family members. There are many reasons why predators begin relationships with senior adults. Once the predators have gained the senior adults confidence, they can begin to exert their influence on the senior to benefit themselves. This is one of the reasons that California law prohibits gifts to caregivers except under certain circumstances.
CONSIDER THE FOLLOWING OPTIONS
TO PROTECT YOURSELF
REQUIRE FACE TO FACE MEETINGS: Create a provision in your trust that requires a minimum number of face to face meetings with the same attorney who prepared the most recent version of your living trust before you are able to make any substantive changes to your estate plan. You could even attach an age threshold at which this provision would begin.
REQUIRE WAITING PERIOD: Create a provision in your trust that requires a waiting period between the time you review a draft of your amendment and when you actually sign the documents that implements substantive changes to your estate plan.
REQUIRE THIRD PARTY CONSENT: Create a provision in your trust that requires the consent of a neutral third party before your trust could be revoked or substantive changes could be made. The identity of this third party should be carefully considered and pre-selected; there should also be a back-up person in case the first person is not able to provide consent. Note that I DO NOT recommend the drafting estate planning attorney serve as the neutral third party.
LIMIT USE OF DURABLE POWER OF ATTORNEY: Create a provision in your trust that limits the authority in a durable power to revoke or amend your trust to people who are already identified in the trust instrument. This may protect you from someone new being named as your Agent in a future power of attorney.
USE DIFFERENT TRUST POWERS FOR DIFFERENT SIZE TRUST ASSETS: Create a provision in your trust to enable smaller, liquid assets to come under your exclusive control but more valuable assets such as investment accounts and real property would be under the power of a Special Trustee.
USE A TRUST PROTECTOR: Create a provision in your trust that appoints a Trust Protector who has the right to receive the trusts financial information directly from the financial institution so that the Trust Protector could detect potential fraud or undue influence through marked changes in your financial situation. Note that the use of this option may involve a stand-alone authorization from the financial institution before your information is authorized to be send to a third person.
USE A SPRINGING TRUSTEE: Springing powers are common in durable powers of attorney. Although a power of attorney is signed on a given day, the actual authority does not spring to life until a certain event, usually the incapacity of the Principal. You could create a springing Trustee who automatically becomes a Co-Trustee with you when you reach a certain age. Having two Trustees who have to sign on financial transactions or to accept changes to a living trust may be useful.
LIMIT THE SURVIVING SPOUSES POWER TO APPOINT TRUST ASSETS AFTER THE DECEASED SPOUSES DEATH.
Create a provision in the trust which limits the Surviving Spouses ability to change the ultimate disposition of the Trust regarding the Deceased Spouses share of the trust estate.
Since the estate tax exemption has been increased to over $5 million per person, many people are now choosing to hold all of the assets in a single trust during the lifetime of both spouses rather than dividing the trust estate into His and Her shares at the death of the first spouse. The trust instrument could give the Surviving Spouse a limited power of appointment over the Deceased Spouses share of the trust estate. The trust instrument could even eliminate the power of appointment over the Deceased Spouses share entirely so that the Survivor could not change the terms on which that portion of the trust estate is distributed when the second spouse dies.
CREATE A DISCLAIMER TRUST. Your trust instrument could create an irrevocable trust into which some or all of the Deceased Spouses portion of the trust estate would be distributed because the Surviving Spouse would disclaim trust assets. You could combine this option with the one that names a neutral third party as the Trustee (or Co-Trustee with you). This kind of Disclaimer Trust also provides protection from the Surviving Spouses creditors during his or her lifetime.
THE FIRST HURDLE
Of course, the first hurdle to overcome in order to protect yourself from predators is to recognize that as you age, you may get to a point at which you will become easily influenced by someone to do things you would not otherwise do. Most older adults cannot face the fact of their age and the possible diminishment of their physical health and mental ability. They often believe they are as fully capable of managing their affairs as they were when they were thirty. Acknowledging limitations can be a big hurdle to cross, but one which may be necessary for protection.
Source: Christopher D. Carico, Esq.