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Broken Trust

Conservators protect our most vulnerable

It can happen to anyone – to mom and dad, to your next-door neighbor or even to you. Financial abuse, especially among our aging population, is on the rise. by

The National Adult Protective Services Association describes financial exploitation as the misuse or taking of assets from a vulnerable adult for one’s own personal benefit -- usually without the knowledge or consent of a senior or disabled adult. Ninety percent of the time, those abusers are family members or trusted others -- caregivers, friends, pastors, doctors and neighbors. 

Abuse may include theft of cash, valuables, medication or personal property; fraud involving falsification of records, forgery or unauthorized check writing/real estate transactions; contractor and lottery scams; electronic “phishing” to acquire personal identification numbers to accounts as well as inappropriate mortgage loans, investment or insurance product sales.

Met Life describes a “typical” victim as being between the ages of 70 and 89, white, female, frail, cognitively impaired, trusting, and often lonely or isolated. Predators rely on deception, false pretenses, coercion, harassment, duress and direct threats. Younger folks guard online PINs, keep valuables locked up and watch their surroundings, but what happens when a senior’s memory begins to slip? And who’s protecting them if a caregiver, designated power-of-attorney or legal adviser isn’t honest? 

Legal Assistance

Eldercare advocates, the legal community and a growing tier of trained professional fiduciaries or conservators are working together to address the problem head-on. 

The Colorado Springs Police Department created its first Elder Abuse Unit in 2012. Today CSPD sees about 85 new cases of financial crimes against seniors reported each month, including five percent of individuals living in retirement or skilled nursing facilities. But that’s just the beginning.

“These are some of the most difficult crimes to investigate,” says Colorado Springs Police Detective Charles “Chuck” Szatkowski, who along with CSPD Lt. Howard Black and a full-time Victim’s Advocate supplied by Silver Key Senior Services heads the city’s Investigations/Crimes Against Elders unit. The team also works closely with Silver Key’s case managers, Pikes Peak United Way 2-1-1, the Alzheimer’s Association, PACE, fire departments, the Sheriff’s office and Adult Protective Services (APS), a division of the Department of Human Service.

Sometimes reported abuse isn’t what it seems. A family caregiver, for example, may legitimately need money for medical or household expenses – or a senior may truly gift money to a friend or romantic partner. 

To address growing abuse concerns, Colorado legislators passed two key measures: the Uniform Power of Attorney Act (2010), specifying certain “hot powers,” including direct access to a senior’s financial accounts be granted to POAs, and a Mandatory Reporting law (July 2014) requiring bank employees, investment managers and anyone with knowledge of financial abuse to contact Adult Protective Services or the police. One example: when an adult child repeatedly takes a parent’s money for his/her own use.

A Watchful Eye

Fortunately Court-appointed conservators play a key role in protecting vulnerable populations. 

In Colorado, naming a conservator is one option available to El Paso County Administrator and elder law attorney Catherine Seal. She has presided over or been involved in many such cases.  When older folks have no children, no designated Power of Attorney or when there isn’t a sufficient estate plan, her role is to protect the individual’s best interests for the remainder of life.   

 “Conservatorship is not usually my first choice.  I’d rather see someone put assets into a bank trust or name a General Durable Power of Attorney as their agent,” she says, adding that because Colorado has such simple probate laws, most people don’t bother with trusts. “If that’s the case, a designated POA can be helpful – especially if the person’s diagnosis is an illness like dementia.  But some POAs, family members or even attorneys have proven less-than-trustworthy.”

If APS makes a financial exploitation referral, Seal may be appointed as a temporary conservator to investigate the matter. The Court may also appoint a professional fiduciary to administer the senior’s fiscal affairs.  One of these conservatorship appointees is 31-year old Pikes Peak Probate Services founder Chris Marchese. 

A conservator must be able to show the Court assets of at least $500,000 and like attorneys, must qualify for Errors and Omissions bonding. Marchese manages a successful investment portfolio, but admits it still takes years to become a professional fiduciary - especially without a mentor or referral source. His clients are usually referred by nonprofit and government agencies or through word of mouth. “I don’t advertise. I think of myself as part of a professional network,” he explains. 

Private conservators’ fees run $65 to $135 per hour. Marchese, however, has worked for considerably less to help less fortunate clients and to earn additional Court appointments. Banks appointed as conservators charge monthly fees of 1 to 1.5 percent of total lifelong assets, and the VA receives 4 percent of a military retiree’s monthly income. 

“There are far more lucrative ways to make a living. But the rewards I get from my work more than compensate,” he says. 

One of his proudest accomplishments: uncovering the fact that an attorney, appointed as the victim’s conservator, had paid himself thousands of dollars from the estate. The lawyer was ultimately disbarred.

“I try to educate people. Saying ‘no’ is my most common response,” Marchese adds, explaining that one client’s son had asked his elderly dad to buy a new BMW.

“His estate simply wouldn’t permit it – the cost of the car, the insurance. Even if the state would have allowed my client a driver’s license, a Toyota Prius would have been a smarter alternative.”