Elder Financial Abuse - Undue Influence (CAL. USA)

Elder Financial Abuse – Undue Influence

By: George F. Dickerman, Esq.

Elder financial abuse generally occurs when a caregiver, family member or friend obtains property (real or personal) that once belonged to the elder. The manner in which these properties were obtained usually involves undue influence.

“Undue influence” has been defined by a myriad of statutes and case law, and varies somewhat among the states. In California, for example, undue influence is generally used in two contexts: (1) making a contract or conveyance, and (2) applying certain common law presumptions (See: Elder Law Litigation: Remedies for Financial Abuse, Continuing Education of the Bar/2005).

California Civil Code Section 1575 describes undue influence in contract and conveyance cases:

“The use, by one in whom a confidence is reposed by another, or who holds a real or apparent authority over him or her, of such confidence or authority for the purpose of obtaining an unfair advantage over him or her;

Taking an unfair advantage of another’s weaker state of mind; or

Taking a grossly oppressive and unfair advantage of another’s necessities or distress.”

The common law, and Civil Code section 1575, discuss presumptions of undue influence that exist, primarily when a fiduciary or confidential relationship occur between an elder and the alleged perpetrator. Undue influence results when the perpetrator participates in obtaining an undue profit or unfair advantage over the elder.

What this presumption means is that the burden of proof is shifted to the defendant to prove the nonexistence of the presumed undue influence or fraud (See: Continuing Education of the Bar, supra).

Abridged
SOURCE:    Elder Law- Phoenix Blog




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Testamentary Capacity and Undue Influence in Criminal Proceedings (USA)

Testamentary capacity and undue influence in criminal proceedings

By Saul Elnadav

2009 06 24

An article in Monday’s New York Law Journal raised the interesting question of whether a criminal trial is the best place to get to the bottom of issues surrounding Brooke Astor’s estate.

The case has all the hallmarks of a classic will contest. Anthony Marshall, Brooke Astor’s son, is accused of taking advantage of his mother’s dementia to divert assets from her estate to himself by influencing her to amend her will. The matter is now the subject of a criminal trial in State Supreme Court in Manhattan, but the issues – testamentary capacity and undue influence, among others – are most often seen in Surrogate’s Court.

It’s not just a question of which forum the case is tried in. The issues involved can get very sticky when applied in the real world. Family dynamics are always nuanced. When elderly parents, particularly those with diminishing mental capabilities, rely on their children, are the children being helpful, are they being controlling, do the parents feel controlled? What goes on outside of the earshot of the lawyers preparing the will? In the Astor case, the lawyers themselves are alleged to be part of the problem.

I noted earlier that whether someone has testamentary capacity is not a simple yes or no. Someone can suffer with Alzheimer’s disease and lack testamentary capacity, but wake up one morning with a clear mind and sign a will. The will may be valid, but proving capacity is another matter entirely.

These issues frequently arise in will contests, and Surrogate’s Court has the expertise to deal with them. A criminal fraud and conspiracy trial, on the other hand, may not be the best way to untangle what exactly was or was not on Brooke Astor’s mind when she signed the amendment to her will. In this particular case, the drama involving the so-called “doyenne” of New York society and her son, the cameo appearances of famous people like Henry Kissinger and Barbara Walters as witnesses, and news, blog and tabloid coverage (in no particular order), will certainly compound the difficulties of a careful analysis of the issues.

But there’s another important consideration. Unlike Supreme Court, Surrogate’s Court can’t impose criminal sanctions. It can order Anthony Marshall to return assets, but it can’t send him to prison for committing fraud. According to a former prosecutor quoted in the Law Journal article, “as the problem of elder financial abuse has gotten more serious, the courts have recognized that the penal law must be read more broadly to fully fulfill its purpose.”

SOURCE: Trusts Estates Law.com

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Undue Influence and Fraud: A Menancing Unbalance of Elder Abuse (USA)

May 8, 2009

By Steven Peck

May 8, 2009

A Superior Court judge has ruled that heiress Phoebe Hearst Cooke be evaluated by a psychiatrist who has no ties to either Cooke or other members of her family.

Cooke, 81, is fighting attempts by her family to have her estate, as well as her person, placed under a conservatorship managed by her twin brother, George Hearst Jr.

Abridged

SOURCE:    California Elder Law Attorney Blog

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Supreme Court Ruled on "Undue Influence" Case (Melb. Australia)

Supreme Court rules on Betty Dyke's $15m will battle

 By Norrie Ross

February 27, 2009

TWO couples who inherited a share in the $15 million will of an elderly spinster today won a Supreme Court battle to keep the money.

The husband in a third couple was excluded from his share of Betty Dyke’s after Justice Peter Vickery ruled that the old lady was subjected to “undue influence” in his case. 

The dispute centred on wills that left the bulk of her estate equally to Tim and Denise Knaggs, Robert and Sandra Allen, and Gary and Diane Smith. 

Millionaire Ms Dyke changed her will in favour of her neighbours at a time when she was sharing one room of a run-down fibro farmhouse with chickens and had no inside toilet. 

Justice Vickery ruled that a 1999 will made by Ms Dyke was valid apart from her decision to leave a portion to Tim Knaggs. 

The judge ruled that the clause in the will that left $5 million jointly to Mr and Mrs Knaggs should be overturned and that Mrs Knaggs is entitled to the entire sum in her own right. 

This reflected the true wishes of Ms Dyke, he said. 

Justice Vickery said the inclusion of Mr Knaggs in the will was “inconsistent with her long-held dislike of him”. 

At the time the will was made Ms Dyke was heavily dependent on Mrs Knaggs and because of this she fell under the influence of the couple. 

“The influence became undue when both Denise Knaggs and Tim Knaggs became involved in the preparation of Betty Dyke’s 1999 will,” the judge said. 

“The inclusion of Mr Knaggs as a beneficiary resulted directly from a telephone call made by Denise Knaggs to Betty Dyke’s solicitor a few days before she (Ms Dyke) signed the will.” 

The judge found that the Allens and the Smiths did not engage in any conduct amounting to undue influence on Ms Dyke. 

Abridged

SOURCE:      The Herald Sun, Australia

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For those who are interested in the legal findings of the Supreme Court in this case, particularly with regards to "Capacity", "Undue Influence", and Onus of Proof --- Check out the Austlii Report. Lengthy read of approx. 150 pages.

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Alleged Financial Elder Abuse: The Betty Dyke Case cont. (Melb. Australia)

Betty Dyke had no interest in money, court told
By Norrie Ross
November 13, 2008

AN ELDERLY spinster who left $15 million to her neighbours in her will had no need for money, one of the beneficiaries told a court yesterday.

Tim Knaggs said Betty Dyke "just wanted to make sure she had friends" and was extremely generous to people who helped her. He said she had no interest in material things.

Ms Dyke resisted attempts to improve her living conditions, he said, but the beneficiaries agreed to support her to the end.

"If she thought she was buying friends then 'good on you Betty'," he said. Mr Knaggs earlier told the Supreme Court will battle that Ms Dyke sold off a portion of her land in 2000 for $1.3 million and divided the proceeds between he and his wife Denise and two other neighbouring couples.

The hearing is expected to continue today.

Abridged
SOURCE: The Herald Sun (Vic. Austrlia)
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Please Note: The case is still going through the court. All parties must be taken as INNOCENT unless proven otherwise in court.

There are many lessons that we can learn from this case.
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Alleged Financial Elder Abuse: The Betty Dyke Case cont. (Melb. Australia)

Ex-cop tells of will 'rush'
By Norrie Ross
November 12, 2008

AN ex-police inspector said yesterday his wife started preparing guardianship papers for millionaire Betty Dyke the day after the elderly spinster was admitted to hospital with dementia.
Tim Knaggs, giving evidence in a Supreme Court will battle, said that within days he had sent copies of Ms Dyke's will to two other couples, who along with him and his wife were the main beneficiaries of her $15 million estate.

He said he and his wife Denise, who jointly received $5 million from the estate, had been advised by a solicitor to move quickly.

Richard Kendall, QC, suggested to Mr Knaggs in cross-examination that he and his wife had moved quickly to "control the situation" because of their stake in the will.
"Something had to be done. We were extremely rushed for time," Mr Knaggs said.
Mr Kendall quizzed Mr Knaggs about a legal document with a stamp in one corner, dated January 12, 2001, that stated Denise Knaggs had power of attorney over Ms Dyke's financial affairs.

Mr Kendall suggested the date was the same day Ms Dyke had signed her final will, of which the Knaggs, along with Gary and Diane Smith and Robert and Sandra Allen -- all the old lady's neighbours -- were the major beneficiaries.
Mr Knaggs denied that Ms Dyke had been unable to manage her financial affairs when she made the will.

Julie Nicholson, who is a second cousin of Ms Dyke, along with two friends of Ms Dyke and three charities, are contesting two wills, made in 1999 and 2001.

They have asked the court to revoke probate and to grant probate on her original 1985 will, alleging that dementia, ill-health and overuse of painkillers had made Ms Dyke incapable of giving independent instructions.

Abridged
SOURCE: The Herald Sun (Vic)
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Please note that as the case is still going through court process; All parties mentioned should be taken as INNOCENT unless proven guilty in court.
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Alleged Financial Elder Abuse: The Betty Dyke Case Cont. (Melb. Australia)

$5m will greed denied in Betty Dyke case
By Norrie Ross
November 11

A FORMER police inspector who jointly inherited $5 million from his spinster neighbour yesterday told a judge, "I'm not avaricious".

Tim Knaggs said Betty Dyke asked for assistance when she was drawing up a new will in 1999 but he didn't know details of the finalised document.

He told Supreme Court Justice Peter Vickery he knew Ms Dyke planned to leave land to him and wife Denise, Gary and Diane Smith and Robert and Sandra Allen, also neighbours.
Mr Knaggs also said he was present when his wife, a joint guardian, told hospital staff if Ms Dyke suffered cardiac arrest her notes were to state NFR -- not for resuscitation.

Mr Knaggs said Ms Dyke was a woman who "liked to reward people for their loyalty", and said he was not fully aware of the terms of her will until after she was admitted to hospital in June 2002.

But he was present when Ms Dyke told people she was happy to leave her land to friends who had helped her.

Mr Knaggs said he and his wife removed the will and other documents from Ms Dyke's home after she went into hospital because they were worried about security.

Under cross-examination from Richard Kendall, QC, he said he saw the 1999 will among the papers but didn't look at it. "I'm not avaricious," Mr Knaggs said.
He agreed that after Ms Dyke sold some land in December 2000 each couple got almost $420,000. He described it as a "straight-out gift" and not made on the understanding the couples would care for Ms Dyke until she died.

The trial has been told Ms Dyke's home was dilapidated and she lived and slept in a filthy kitchen, shared with five dogs and sick birds in cages.

Ms Dyke had severe Alzheimer's disease when admitted to Frankston Hospital.
Julie Nicholson, a second cousin of Ms Dyke, two friends of Ms Dyke and three charities are contesting the will. The hearing is to continue today.

SOURCE: The Herald Sun
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Mt Martha Spinster's Estate in Court battle (Melb. Australia)

Recluse millionaire suffered dementia: relative
29 Oct 08 @ 03:55pm
by MARK TESORIERO

ELDERLY Mt Martha recluse Elsbeth ``Betty’’ Jean Dyke suffered from dementia, a relative has told the Supreme Court.

Colin Nicholson, 59, of Mt Waverley, told the court that Miss Dyke would not have understood the documents she signed when changing her will , and that she didn’t understand what she was doing.

“My aunty suffered from dementia, from severe pain,” Mr Nicholson said.
“She overdosed on medication.”

Referring to Miss Dyke’s legal discussions with lawyers about changing her will, Mr Nicholson said: “I don’t believe she understood anything of their conversations.”

Defence counsel Russell Berglund, QC, asked Mr Nicholson why he didn’t say anything when Miss Dyke split the $1.26 million proceeds from the earlier sale of some of her land with neighbours Timothy and Denise Knaggs, Robert and Sandra Allen and Gary and Diane Smith.
Mr Nicholson said he believed the money had been given to the neighbours so Miss Dyke would be “looked after” later in life.

“If it ensured she had full private care and support in later years of life, it wouldn’t matter if it was $350,000 or $3 million,” he said.

Mr Nicholson’s mother was a first cousin of Miss Dyke.
Miss Dyke’s $15 million estate, which included the 17ha Sefton Grange property, is at the centre of an extraordinary legal dispute.

The changes to her original 1985 will effectively left her $15 million estate to the Knaggs, Allens and Smiths.

The will is being challenged by Julie Anne Nicholson, Judith and John Bailey and charities the Lort Smith Animal House, the Blue Cross Animal Society and Deaf Children Australia. Miss Dyke lived alone, never married and had no immediate family when she died, aged 84, in May 2004.
The plaintiffs’ action centres on arguments that Miss Dyke was not mentally fit when she made changes to her wills.

The trial continues before Justice Peter Vickery.

SOURCE: Mornington Peninsula LEADER

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Financial Elder Abuse or Will Scam (Melbourne, Australia)

Will scam claims are 'pure fantasy', says lawyer
Kate Hagan
October 28, 2008

THE family of an elderly Mount Martha woman who left her $15 million fortune to her neighbours were disgruntled because they were left out of her will, a court has been told.
Russell Berglund, QC, said Elsbeth "Betty" Dyke was fond of the neighbours, who looked after her for the last 20 years of her life, and wanted to help them. "Miss Dyke was a formidable woman who knew what she wanted and took steps to ensure she got (it)," he said.

Miss Dyke, a spinster who suffered dementia, lived alone on her 17-hectare property with her dogs and exotic birds until she moved into a nursing home in 2002. She died in 2004.

Mr Berglund said Miss Dyke's relative, Julie Anne Nicholson, considered the Mount Martha land as her family's inheritance and became upset when she found Miss Dyke had left them nothing.
Mrs Nicholson told the Supreme Court yesterday that neighbours Tim and Denise Knaggs had formed a "business venture" with the late solicitor Brian Kollias, who prepared Miss Dyke's 2001 will.

In a letter to Mr Kollias after Miss Dyke's death, Mrs Nicholson wrote: "You have … helped people steal our land. That land belongs to our family."
Asked in court if Mr Kollias was part of a grand conspiracy to defraud her family of the property, she responded: "Exactly."

Mrs Nicholson said Mr Kollias had orchestrated a "scam" by confusing Miss Dyke with constant questions about her will and falsely telling her she was leaving most of her estate to charity.


Mr Berglund said Mrs Nicholson's theory was "pure fantasy" and she did not have "one iota of evidence" to back it up.

Mrs Nicholson is challenging the will along with Miss Dyke's friends John and Judith Bailey, the Lort Smith Animal Hospital, the Blue Cross Animal Society and Deaf Children Australia.
In her will Miss Dyke left $5 million each — close to her entire estate — to neighbours Timothy and Denise Knaggs, Robert and Sandra Allen, and Gary and Diane Smith.

The case continues.


Abridged

SOURCE: The Age

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I've the following questions:

• With all the wealth, how was this poor lady treated; and who looked after her the last few years of her life?
• Did the lawyer, who prepared the last will, took measures to ensure that there would not doubt about the woman's mental capacity? And, did he take steps to ensure that there were NO 'Undue Influence'.

Simple, but fair questions. With aging population affecting many countries, there should be uniform approaches and safe-guards, that lawyers are required to do; when called upon to prepare documents e.g. will and/or power of attorney.

AC
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Financial Elder Abuse? $15 Million Fortune and Claims of "Undue Influence" (Melbourne, Australia)

Friends and neighbours who Betty made rich
By Kate Hagan
October 28, 2008

AN ELDERLY Mount Martha spinster with dementia was pressured by neighbours to cut charities from her will and leave her $15 million fortune to them, a court has been told.
Elsbeth "Betty" Dyke lived alone on her 17-hectare property with her five Pomeranian dogs and exotic birds before she died, aged 84, in May 2004.

In a will made in January 2001, she left $5 million each - her entire estate - to neighbours Timothy and Denise Knaggs, Robert and Sandra Allen and Gary and Diane Smith.

But that will is now being challenged in the Supreme Court by charities, friends and a distant relative of Miss Dyke, who claim the neighbours exercised "undue influence" to persuade her to change it in their favour.

Abridged
SOURCE: The Age (Australia)
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An interesting case! Will keep a look-out for the verdict.

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Elder Abuse: Undue Influence, Financial Exploitation (Tx. USA)

October 17, 2008
Editor, Jacksboro Gazette News

“Mr. Smith” awoke this morning with only the monotony and isolation of a typical day to look forward to.

At 77 years of age, and a widower, the highlights of the day would be a favorite television show or perhaps the likelihood he’d get a phone call from one of his three children, none of whom live in the same town with him. Ah, but today is Tuesday, and his private-pay provider will come in later this morning. A smile forms on his weathered and lonely face. He’ll have company through lunch, and maybe even through the afternoon—if only she’ll stay a bit longer.

He’s grown attached to her in a unique sort of way, and since she is his only regular form of contact, the bond sometimes overshadows that which he has with his own children. He rationalizes to himself that this is fine because he knows they are busy with their own lives and so the guilt of having assigned his unrelated helper as his power of attorney quickly diminishes. He won’t even have to tell them because his “helper” understands and assures him his children will worry further if they know he needs help with writing checks. She will make sure he and his children don’t have to worry.
Mr. Smith has become a victim. He is a victim of undue influence which is often a part of the scourge associated with elder financial exploitation. In its most simplistic form, undue influence is simply using trust or power as leverage for replacing a person’s desires or wishes with another’s. Sometimes it is subtle, or it can be as profound as “emotional blackmail.”

Sadly, “Mr. Smith’s” situation is only one of countless variations of financial exploitation. In his particular case a properly, but covertly executed legal instrument later proved to be the undoing of a substantial part of his life’s savings. This should have been a warning sign, but it was noticed too late.

There are several red flags – indicators of undue influence or potential exploitation. Isolation is a significant red flag – making the victim an easy target. Another potential warning sign is when an elderly person begins to have financial problems. It’s sometimes a concerned banker who thankfully notices. Perhaps it’s the claim by an elderly individual that things are missing from his house – a matter often dismissed as forgetfulness although later may be discovered to be a caregiver who took a little bit here and there.

Adult Protective Services, a division of the Texas Department of Family & Protective Services is the agency charged with investigating situations such as Mr. Smith’s. Specifically, if abuse, neglect or financial exploitation is suspected of being perpetrated against an individual over age 65, or against a person with disabilities over age 18, then APS will investigate. The alleged perpetrator must be a person related or providing care to, or who has an ongoing relationship with the elderly individual or person with disability.

If you suspect abuse, neglect, or exploitation of the elderly or disabled, please call 1-800-252-5400. Your call can help stop exploitation. You can help protect the unprotected.

Abridged
SOURCE: Jacksboro Gazette News
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