Law Tips: The Problem of Financial Exploitation of the Elderly and Disabled

Financial exploitation of the elderly and disabled has been called “the hidden epidemic.” Attorneys who represent the aged and disabled frequently encounter acts of financial exploitation. And attorneys must do what they can to protect their clients from the risk of being financially exploited.

This statement from James Voelz, ICLEF’s Elder Law Institute faculty member, is a reflection of his ongoing concerns about the elderly and disabled clients he serves. I am grateful that Jim agreed to share his expertise on protecting clients in the expanding elder law arena with Law Tips readers. This week he provides background on the “problem” and the applicable law. Then, as we go down this road, we’ll hear Mr. Voelz’s further advice on steps elder law attorneys may want to take to prevent exploitation of clients.

Jim Voelz’s thoughts on the financial exploitation problem:

The Indiana Adult Protective Services (“APS”) program received 41,334 reports, of which 10,506 reports were investigated during 2012. The reports were classified as follows: Abuse- 2,689, Neglect- 3,176, Self Neglect- 3,198, and Financial Exploitation- 1,443. How many cases of financial exploitation are reported? The estimates range from 1 in 5 to 1 in 44.

I recently met with an APS investigator who has almost 25 years of experience. He said that reports of financial exploitation are increasing, and voiced extreme frustration that he has never seen criminal charges filed against a person who financially exploited an elderly or a disabled person! He said that we have the tools to protect people in Indiana, but these tools are not being used effectively. He said the exploiters are getting away with financial exploitation when they are not being prosecuted. He said prosecutors do not file charges, because victims suffer from dementia or other health issues making it difficult to prove that a crime has been committed.

I also contacted Patrick D. Calkins, who is the Program Director for Adult Protective Services. Mr. Calkins told me that APS does not keep statistics about the number of financial exploitation reports that result in criminal charges being filed against the alleged perpetrator. He did verify that the most common excuse for failure to prosecute is “that the victims make bad witnesses.” But he said that his take on this is that homicide victims make bad witnesses also, but prosecutors still file charges for murder.

Mr. Calkins also told me that the victim’s attorney is often the victim’s last line of defense. Consequently, it is important that we do what we can to help our clients not become victims of financial exploitations, and if our client does become a victim, then to help stop the continuation of financial exploitation and to help our client seek appropriate remedies.

Adult Protective Services

Indiana has had an adult protective services (APS) law since 1985. See Indiana Code 12-10-3-1 through 12-10-3-31. Indiana is the only State in which the APS program is a criminal justice function.

The Division of Aging of the Indiana Family and Social Services Administration oversees the APS program. There are 16 APS unit geographic boundaries. APS has 42 field investigators who are employed by “hub prosecutors” who have a contract for services with the Division of Aging, and they are paid from State funds.

A person who believes or who has reason to believe that another person is an “endangered adult” shall make a report to the adult protective services unit, a law enforcement agency, or the Division of Aging on its statewide toll free telephone number (1-800-992-6978), as required by Indiana Code 12-10-3-9.

So what should an attorney, who knows that his client has been financially exploited, do?

Is the attorney required by law to report this? Yes, Indiana Code 35-46-1~3(a) does require a report to be made to the Division of Aging, APS, or a law enforcement agency.

But, what duties does the attorney have pursuant to the Indiana Rules of Professional Conduct?

Rule 1.14(b) and (c) outlines these responsibilities. (Law Tips note: Here is a link to specific language of Rule 1.14: Indiana Rules of Professional Conduct. Consult the Rules for guidance on when a lawyer is permitted or required to take protective measures. One comment to the Rule concludes as follows: “The lawyer’s position in such cases is an unavoidably difficult one.”)

Suspicious Activity Reports

The Financial Crimes Enforcement Network of the United States Department of the Treasury issued an Advisory to financial institutions regarding the filing of suspicious activity reports regarding elder financial exploitations on February 22, 2011. Please refer to http://www.fincen.gov/statutes_regs/guidance/html/fin-2011-a003.html. The Advisory lists potential indicators of elder financial exploitation.

If the financial institution has a reasonable explanation for the transaction based upon the available facts, including the background and possible purpose of the transaction, it is relieved of the obligation to file a Suspicious Activity Report.

Attorneys who are representing clients or other agents who are involved in an activity with a financial institution that could result in the institution filing a Suspicious Activity Report should provide the financial institution with a reasonable explanation for the transaction. This may prevent a visit from Federal or State law enforcement.

Senior Consumer Protection Act

Indiana has a new law called the Senior Consumer Protection Act that became effective July 1, 2013. The Act provides civil remedies involving financial exploitation of a person who is at least 60 years of age. The Act can be found at Indiana Code 24-4.6~6-1 through 24-4.6-6-6.

We’re breaking here in Jim Voelz’s discussion of financial exploitation of the elderly and disabled. But he continues to share his expertise next week in areas such as the right timing for a person to gift their assets and the amount of power given to the attorney-in-fact.

For a comprehensive update in elder law from an outstanding panel, check out the 2014 Elder Law Institute on October 9-10, 2014.

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About our Law Tips faculty participant:
James K. Voelz, Voelz Law, LLC, Columbus, Indiana. Mr. Voelz ‘s law practice primarily involves estate and disability planning, estate and trust settlement, elder law, and Medicaid qualification services. Jim is a member of Hoosier Hills Estate Planning Council, National Academy of Elder Law Attorneys and its Indiana Chapter, and the Indiana State Bar Association’s Elder Law and Probate, Trust and Real Property Sections. Mr. Voelz serves on the Committee on Character and Fitness of the Indiana Supreme Court.  And he is also the author of “Senior Moments” newsletter.

About our Law Tips blogger:
Nancy Hurley has long-standing connections with Indiana lawyers. She was formerly a member of the ISBA and IBF staffs for over 30 years. Nancy’s latest lifestyle venture is with ICLEF. We are utilizing her exceptional writing and interviewing skills while exploring how her Indiana-lawyer background fits with ICLEF’s needs. When she isn’t ferreting out new topics for Law Tips, her work can be found in our Speaker Spotlight blogs, postings on the ICLEF Facebook and Twitter pages, and other places her legal experience lends itself.

Thank you for reading Law Tips. You may subscribe to this weekly blog through the RSS link at the top of this page.  Also, you are encouraged to comment below or email Nancy. She welcomes your input as she continues to sift through the treasure trove of knowledge of our CLE faculty to share with you.

ICLEF • Indiana Continuing Legal Education Forum, Indianapolis, IN

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Law Tips: More Ways Technology Has Changed Employment Law

How has an employer’s obligation increased with speedier electronic reporting capabilities? Which side has the tactical advantage in electronic communication? What are the causes of action available to employees based on modern technology?

Donna Panich, our Law Tips employment law contributor, is in the midst of sharing her expertise on several technological advancements that are impacting her area of practice. (Scroll down for her tips from last week.) Following are other interesting challenges that have emerged during Ms. Panich’s 35 years of advising employment law clients:

The Tactical Advantage of Asymmetrical Discovery Has Been A Powerful Weapon For The Plaintiff’s Bar

The proliferation of electronically stored information (ESI) has provided the plaintiff’s bar with a powerful weapon. Up to this point, most of the data in employment cases has been in the hands of the employer. The burden associated with the preservation, collection, review and production of that data has sent many an employer to the settlement table. If the plaintiff is able to assert a colorable claim of spoliation, the weapon becomes that much better.

Proposed amendments to the Federal Rules of Civil Procedure may have some impact on tempering the risks of spoliation. The advent of social media has created a source of ESI which may increase the amount of ESI controlled by plaintiffs and thus reduce the incline on the playing field. However, the tilt remains and will likely remain until (a) courts actively enforce the limits on discovery currently in the Federal Rules, (b) litigants and the courts recognize that the requirements of Rule 34 are not met by a discovery request for all documents hitting upon a set of search terms, and (c) everyone places greater emphasis on the speedy resolution of the merits rather than fulsome disclosure of “all” ESI on any topic remotely related to the litigation.

Employer Obligations, Investigations Of Failures To Meet Those Obligations, And Class-Based Litigation Have Expanded To An Enterprise Level

In a paper world, decisions were usually localized. Analysis of employment statistics was painfully slow. Cross country incidents were difficult to track. Electronic databases have changed all this. Not only is centralized control of decision making much easier, documentation of those decisions, and data relating to all those decisions, is centralized as well so that collection of the information, and tracking information is much easier.

As a result, the Occupational Safety and Health Administration tracks every citation issued at every facility of the employer or its affiliates. It can determine whether any patterns exist. It can escalate the severity of a violation to repeat or willful without regard to where a prior citation had been issued.

EEOC is able to conduct analyses across the entirety of a company’s workforce, as is plaintiff’s counsel. Moreover, an employer’s claim that producing data on a broad, enterprise level is overly burdensome is less appealing when the data can be requested and obtained in the form of an electronic report requiring only a few hours of programming time.

Given the trend in enterprise-wide investigation and litigation, employers may wish to emphasize localization of decisions while concurrently asking in-house counsel, or human resources, under the guidance of its counsel, to look at decisions on a broad basis. If patterns of adverse impact or underutilization are detected, corrective action may avoid broad liability. Likewise, it is imperative that the company maintain adequate inter-facility awareness of legal developments. Ignorance regarding problems at a sister plant a thousand miles away will not be a defense to a repeat or willful citation.

“Concerted Activity” Is Redefined And Enabled Through Social Media And Email

The National Labor Relations Act protects employee rights to engage in concerted activity regarding workplace issues such as wages and working conditions. Before the advent of electronic communications and social media, concerted activity usually involved employee meetings, strikes, boycotts, picketing, or other physical shows of disagreement, most of which were contained to the immediate environs of the dispute, were limited in message content, and largely involved only unionized workplaces. Now, employees can express disagreement with their wages and working conditions with little effect or inconvenience and can reach a diverse, widely scattered audience by using social media. Moreover, most of the cases coming before the National Labor Relations Board have arisen in non-unionized work environments.

A union seeking to organize a group of employees has traditionally been barred from directly communicating with employees on the employer’s work site. However, recent rulings from the National Labor Relations Board, as well as proposed new election rules, would give the union access to the target employees via email -perhaps even through the employer’s own email system.

Because of these new realities, most employers are actively rethinking and revising their social media and computer usage policies, unions are developing new organizing strategies, and plaintiff’s counsel should always consider the potential new cause of action available to an employee who is discharged or reprimanded based on the content of his or her communications.

Thank you again to Donna Panich for providing her dynamic update on technological advances impacting employment law. Her presentation on this topic is a segment of the seminar entitled, 54 Practical Issues, Tips and Traps for Employment Lawyers check out the On Demand Seminar or Video Replay Seminar by Clicking Here.

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About our Law Tips faculty participant:
Danuta (Donna) Bembenista Panich, Ogletree, Deakins, Nash, Smoak & Stewart, P.C., Indianapolis, has a varied practice dealing with all aspects of labor and employment law. However, since 1995, she has focused primarily on defending employers – including many of the nation’s largest companies – in class actions, multi-plaintiff and collective actions, pattern and practice claims, and other “bet the company” matters such as investigations of catastrophic industrial accidents. Ms. Panich has dealt extensively with electronic discovery and litigation preparedness. Since she joined Ogletree Deakins in 2007, she established, and has since served, as chair of Ogletree Deakins’ Record Retention and E-Discovery Practice Group.

About our Law Tips blogger:
Nancy Hurley has long-standing connections with Indiana lawyers. She was formerly a member of the ISBA and IBF staffs for over 30 years. Nancy’s latest lifestyle venture is with ICLEF. We are utilizing her exceptional writing and interviewing skills while exploring how her Indiana-lawyer background fits with ICLEF’s needs. When she isn’t ferreting out new topics for Law Tips, her work can be found in our Speaker Spotlight blogs, postings on the ICLEF Facebook and Twitter pages, and other places her legal experience lends itself.

Thank you for reading Law Tips. You may subscribe to this weekly blog through the RSS link at the top of this page.  Also, you are encouraged to comment below or email Nancy. She welcomes your input as she continues to sift through the treasure trove of knowledge of our CLE faculty to share with you.

ICLEF • Indiana Continuing Legal Education Forum, Indianapolis, IN

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5 Hot Tips On Trust Administration

If you are involved in trusts, this is your opportunity to brush up. I have five tips for you on trust administration from Ellen Deeter, a lawyer with extensive background in the area. Ms. Deeter spent most of the past 35 years working in bank trust departments, including as senior trust counsel.  Ellen generously agreed to share her expertise with Law Tips readers.

Tip #1 – Read the entire trust agreement!

• After you have read the trust agreement from beginning to end, including the “boilerplate”, read it again. And then a third time.

• Next, write out a synopsis of the trust agreement, highlighting key provisions. Pay particular attention to the provisions identifying the beneficiaries (current and future), noting mandatory and discretionary distributions, termination provisions, and allocations between principal and income.

• Every time you receive a request for a distribution refer back to the document and make sure that the request is:

1. from someone entitled to receive it.

2. for a purpose that is allowed in the document.

Tip #2 – Read and know the Indiana statutes on trusts (make Indiana Code Title 30 your friend).

• In addition to the Indiana Trust Code, also become familiar with the Indiana Probate Code, the Uniform Principal and Income Act, Total Return Unitrusts. Don’t forget the Internal Revenue Code and the provisions governing the taxation of trusts.

Tip #3 – Establish a process, follow it consistently; communicate.

• Don’t wait until you get a request from a beneficiary for a discretionary distribution to let him or her know the type of information you will need to evaluate the request. Establish ground rules ahead of time for how the request is to be made and the types of documentation that they will need to provide.

• Explain to beneficiaries that the trustee has a duty to both income beneficiaries and remaindermen.

• Let beneficiaries know how the trust (and beneficiaries) are taxed on income earned in the trust and when to expect to receive their Schedule K -1s.

Tip #4 – Understand the difference between accounting income and accounting principal.

Become familiar with the Indiana Uniform Principal and Income Act. Read the document to detennine if the trust agreement makes provisions contrary to the act (which it may) or whether the trust agreement gives the trustee discretion on allocating receipts and disbursements between income and principal.

• Explain to the beneficiaries what the term “net income” means. General (simplified) rule: interest, dividends, rents, royalties less 1/2the trustee fee.

Tip #5 – Document your files.

• Beneficiaries are entitled to inspect your files. Remember that as you write notes to the file.

• Beneficiaries have been known to be litigious (surprise, surprise). Keep copies of all correspondence and emails. Make written, contemporaneous notes of telephone conversations and meetings. Follow meetings up with letters confirming the discussion

Ms. Deeter’s bonus tip: Realize what you DON’T know and engage professionals to assist you. 

I hope you polished your trust administration skills through Ellen Deeter’s review. If you would like to take advantage of the CLE program that includes her discussion of trusts, look for the Video Replay or On Demand Seminar of 120 Hot Tips in Probate, Guardianships, Trusts and Tax by Clicking Here.

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About our Law Tips faculty participant:
Ellen M. Deeter earned her J.D. magna cum laude from Indiana University School of Law at Indianapolis in 1982. She started her career as an inheritance tax examiner for the Indiana Department of Revenue in 1978. Since that time Ms. Deeter has spent most of her career with bank trust departments, including Indiana National Bank, Wachovia Bank, N.A. and Merchants National Bank. She recently retired from The National Bank of Indianapolis, where she worked in various roles over 18 years, including serving as the Manager of the Personal Trusts and Estates Group and as Senior Trust Counsel.  She also is a Certified Trust and Financial Advisor.

About our Law Tips blogger:
Nancy Hurley has long-standing connections with Indiana lawyers. She was formerly a member of the ISBA and IBF staffs for over 30 years. Nancy’s latest lifestyle venture is with ICLEF. We are utilizing her exceptional writing and interviewing skills while exploring how her Indiana-lawyer background fits with ICLEF’s needs. When she isn’t ferreting out new topics for Law Tips, her work can be found in our Speaker Spotlight blogs, postings on the ICLEF Facebook and Twitter pages, and other places her legal experience lends itself.

Thank you for reading Law Tips. You may subscribe to this weekly blog through the RSS link at the top of this page.  Also, you are encouraged to comment below or email Nancy. She welcomes your input as she continues to sift through the treasure trove of knowledge of our CLE faculty to share with you.

ICLEF • Indiana Continuing Legal Education Forum, Indianapolis, IN

Posted in Law Blogs, Law Tips0 Comments

Law Tips: Smoking Guns; 3 Ways Technology has Changed Employment Law

Technological advancements such as email and the virtual office have made life easier, for sure! But these conveniences can carry challenges. Certain areas of law, such as employment law, are impacted directly by these changes in the technology arena. Our latest Law Tips participant, Danuta (Donna) Bembenista Panich, of Ogletree, Deakins, Nash, Smoak & Stewart, P.C., Indianapolis, is acutely aware of these effects on the practice of employment law. Ms Panich has been an employment law practitioner for more than 35 years and serves as chair of Ogletree Deakins’ Record Retention and E-Discovery Practice Group. I appreciate her sharing with Law Tips readers background on the “smoking guns” she encounters and the prudent advise she offers employers:

Clearly, the advent of computers and the intemet was technology change of proportions not experienced by anyone who graduated from law school after 1995. But I want to focus here on more recent, incremental changes in technology that have substantively altered employment law, as well as materially affected its practice:

  1. The virtual office
  2. Mobile communications devices
  3. Electronic communication and messaging systems
  4. Social media
  5. Big data (aka centralized databases).

Individually or in combination these advances in technology have affected employment law in at least the six ways discussed here.

I. “Off The Clock” And “Refusal To Accommodate” Claims Are Proliferating.

The virtual office has greatly expanded the ability to work from home and outside regular hours. There are positive effects flowing from the flexibility this creates: flex-time makes employees happier and makes it easier to balance work and family needs. But blurring the lines between workplace and home and on-duty/off-duty time also creates employment issues. The ability to work remotely opens the door to more accommodation claims under the Americans with Disabilities Act. The requirement to work specific hours from the confines of an office is harder to justify in today’s virtual environment. Similarly, that environment makes it far more difficult to argue against flexibility when requested by a pregnant employee, thus increasing the likelihood of Title VII liability. Prudent employers should carefully consider whether such accommodations are workable, rather than assuming they are not.

Because working from home/outside regular hours is difficult to supervise/control, the virtual office, particularly when coupled with mobile communications devices, can result in some challenging off the clock claims under state and federal wage and hour laws. If an employee checks email, or looks at a work order from a car or home, is that time compensable? And if it is compensable, does it prematurely start or extend the continuous workday?

Employers should be very deliberate in establishing and enforcing policies in order to avoid liability for unintended work time. This is particularly true since date and time stamping of all computer-related activities has provided a ready means of measuring time outside the confines of a time-clock. This ability makes proof of lost time far easier and more accurate. It concurrently increases the burden on the employer who must locate, reserve, and produce the data. In combination, these factors enhance the plaintiff employee’s chance to turn his claim into a class or collective action while also improving his or her settlement posture.

II. The Number Of “Smoking Guns” Have Increased Because We Have Changed The Formality And Frequency With Which We Communicate In Written Form.

People treat email, text messages, tweets and other electronic communications as the equivalent of oral communications. They blurt out whatever comes to mind, pay little attention to whom they direct their communications, and fail to proofread.

Electronic communication has also become a substitute for oral communication. People used to “tell” off-colored jokes to a small well-defined group. Now they broadcast them in written form, for endless redistribution. The result? The number of EEO and retaliation cases continues to grow. Nor is there any diminution in the percentage of cases found meritorious. Given the fact that 50 years of operation under equal opportunity laws must have resulted in less, not more, overt discrimination, one can only conclude that the proliferation of smoking guns has contributed to the seemingly inverse results. Employers should redouble efforts to sensitize employees to these dangers, and might wish to consider new rules on appropriate use of electronic communications.

Poor communication hygiene has also dramatically changed litigation practice. The plaintiff focuses on all forms of electronic communication as the richest potential source of helpful evidence – even if there is no true smoking gun, it is a rare case that does not include problematic or at least embarrassing electronic communications. Defense counsel’s witness preparation takes on a whole new dimension of scouring the record for any potentially harmful remark, and ensuring that the witness is cognizant of, and prepared to explain, all his/her linguistic faux pas. (Plaintiffs preparation should be similarly rigorous.)

III. Metadata and Big Data Create Unprecedented Transparency

Metadata – information about information – sometimes makes guilt or innocence irrefutable. For example, in a retaliation claim, the create date of a document in which the plaintiff’s termination from employment is discussed and agreed upon may prove beyond doubt that the decision was made before a protective activity occurred.

Conversely, metadata reflecting deletion of files, access to files, sending files, or the date of certain communications may prove the violation of a non-compete agreement or the theft of trade secrets.

Big data allows an employer to track every moment of an employee’s workday and every activity of the employee. Performance and productivity can be measured with astonishing precision both in and out of the office. The positive effects in the employment environment are that neither employees nor employers can avoid accountability and subjectivity and selective memory are removed from the decisional process. The negative impacts are greater job stress, less interdependence, trust, and loyalty. From the practitioner’s perspective, the results are more claims, more hard evidence, but less institutional knowledge and client loyalty.

Let’s take a break at this point in Donna Panich’s discussion of issues presented to employment law practitioners by technological change. But stay tuned! In next week’s Law Tips she talks about the alterations in such areas as asymmetrical discovery and the tracking of cross-country incidents.

Meanwhile, if you are interested in a comprehensive Employment Law CLE, check out the On Demand Seminar or Video Replay Seminar of 54 Practical Issues, Tips and Traps for Employment Lawyers by Clicking Here.

_________________________________________________________________________________

About our Law Tips faculty participant:
Danuta (Donna) Bembenista Panich, Ogletree, Deakins, Nash, Smoak & Stewart, P.C., Indianapolis, has a varied practice dealing with all aspects of labor and employment law. However, since 1995, she has focused primarily on defending employers – including many of the nation’s largest companies – in class actions, multi-plaintiff and collective actions, pattern and practice claims, and other “bet the company” matters such as investigations of catastrophic industrial accidents. Ms. Panich has dealt extensively with electronic discovery and litigation preparedness. Since she joined Ogletree Deakins in 2007, she established, and has since served, as chair of Ogletree Deakins’ Record Retention and E-Discovery Practice Group.

About our Law Tips blogger:
Nancy Hurley has long-standing connections with Indiana lawyers. She was formerly a member of the ISBA and IBF staffs for over 30 years. Nancy’s latest lifestyle venture is with ICLEF. We are utilizing her exceptional writing and interviewing skills while exploring how her Indiana-lawyer background fits with ICLEF’s needs. When she isn’t ferreting out new topics for Law Tips, her work can be found in our Speaker Spotlight blogs, postings on the ICLEF Facebook and Twitter pages, and other places her legal experience lends itself.

Thank you for reading Law Tips. You may subscribe to this weekly blog through the RSS link at the top of this page.  Also, you are encouraged to comment below or email Nancy. She welcomes your input as she continues to sift through the treasure trove of knowledge of our CLE faculty to share with you.

ICLEF • Indiana Continuing Legal Education Forum, Indianapolis, IN

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