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Written by Jay Beskin -- BT Contributor   
April 2013

Miami Lakes addresses the financial exploitation of seniors, something Aventura should have done long ago

Tbigstock-Helping-The-Needy-4601115he Town of Miami Lakes was incorporated five years after Aventura. Because the founders of both Miami Lakes and Aventura used the same law firm to draw up their charters, Miami Lakes’s form of government differs little from ours. Yet Miami Lakes officials have taken a path that is much different.

While Aventura officials dismiss the need for resident input on most matters, Miami Lakes has at least eight citizen advisory committees, some concerning the special requirements or interests of its residents. For example, there is a Youth Activities Task Force, a Veterans Committee, and an Elderly Affairs Committee.

A recent initiative of the Elderly Affairs Committee proves how citizen participation can have a positive impact on a community. Last month the committee held a seminar addressing the financial exploitation of seniors. According to the 2010 census, about 13.3 percent of Miami Lakes’s population is 65 years of age or older. Aventura has twice that proportion of seniors, 26.6 percent.

This correspondent is personally aware of four instances of financial exploitation of seniors that have occurred in or near Aventura. It’s a silent menace, because all too often family members or friends do not know how to respond, or are too embarrassed to publicize the experience. But we should be thankful the people of Miami Lakes had the wherewithal to address what is also an Aventura story.

This is how the story frequently unfolds. A senior lives alone. Her children or other family members live out of town and visit the senior only occasionally.

While still having full mental competence, the senior requires some day-to-day assistance with physical tasks, and she or her family hires an aide, who may work part-time or full-time. The aide assists the senior in bathing and dressing, prepares meals, cleans the condo, does the shopping, and drives the senior to medical appointments. The senior pays the aide an hourly rate. So far, so good.

Several years pass. The senior has become a bit more physically frail. She rarely leaves the condo, except for trips to the doctor and, once in while, to a restaurant with the aide. Mentally she’s not as sharp as before. The only person the senior sees on a regular basis is the aide.

The aide becomes the senior’s best friend. Suddenly, the aide is paid two or three times her original wage. The senior writes checks for a down payment on a new vehicle for the aide. The senior also pays the monthly car payments. (After all, the aide has to have reliable transportation.)

More checks are written for the aide’s household purchases, maybe even for a down payment on a new house. After a time the senior is unable to write checks. So the aide writes them, and the senior signs them without question.

You can easily guess how this story ends. One of the senior’s children visits, reviews the bank accounts, and, to his horror, realizes his mother may not have enough money on which to live out her years, particularly if, at some point, she is going to require admittance to a care facility.

If the senior didn’t sign appropriate estate documents when she was fully competent, legal guardianship proceedings have to be initiated to obtain control of the senior’s accounts. The guardianship proceeding is expensive, embarrassing, and intrusive. Four strangers -- a court-appointed lawyer and three healthcare professionals -- have to visit the senior to evaluate whether she retains her mental competence.

Of course, there are variations on this story. Sometimes a child is taking care of her mother’s affairs and writing checks out of a joint account or under power of attorney. That child, or her partner, has encountered financial difficulties. Checks are written to satisfy the child’s debts.

That’s what the mother would have done under the circumstances, if only she could fully grasp them, right? The other children get wind of this. Lawyers are hired, nasty letters are written, and lawsuits are filed.

So how do the good people of Miami Lakes tell us to prevent this problem? By having seniors adopt a set of carefully drawn estate planning documents while they are fully competent and clearly able to state their intentions, in the event they later become incapacitated.

First, a senior should execute a power of attorney, which enables a trusted person to deal with her financial matters in the event she no longer wishes, or is competent, to do so.

Beware, though. The power of attorney is an extremely powerful document. In certain cases, the agent appointed under the power of attorney can change the senior’s estate plan, and in all cases the agent can act on behalf of the senior by writing checks or rearranging investments, even when the senior is fully competent and wants to continue to manage her own affairs.

Accordingly, it’s important the appointed agent and/or her partner have no personal financial issues or a substance-abuse problem.

If the senior wishes to appoint one child to the exclusion of others, there should be no actual or potential conflict among the children, so that the children not acting as the agent have no reason to question the actions of the agent. Also the agent should have some experience in handling financial investments.

Second, the senior should create a living trust to which most, if not all, of her assets are transferred. A living trust is a document under which the senior is the sole beneficiary during her lifetime and remains in control of the assets so long as she remains competent. Thus there is no danger that anyone can take over her financial affairs until she is incompetent.

The senior can use the assets in the trust for any purpose. However, if the senior is no longer able to handle her affairs, no mortifying guardianship proceeding is required. Instead, a letter from a doctor who knows her well -- and perhaps one from another physician, such as a psychiatrist -- should be sufficient to transfer powers to a successor trustee.

The same rules in selecting an agent under a power of attorney should apply in selecting a successor trustee. If a qualified individual is not available, then a trust company may be a good choice. These are particularly experienced in saying no to friends and relatives who may want to “borrow” money from the senior.

If the approximately 9000 Aventura seniors take this advice from the people of Miami Lakes, there will be no Aventura story to tell anymore. The people of Aventura should thank the people of Miami Lakes.


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