Financial abuse of the elderly is, unfortunately, an increasing problem. The aging population and increasing rates of dementia are factors that are leaving seniors exposed to exploitation by friends or family members. Currently, approximately 500,000 Canadians suffer from dementia and that number is expected to more than double over the next generation.
As I have blogged about previously, having a power of attorney for property in place appointing a substitute decision maker to act when the grantor of the power of attorney no longer has the capacity to make decisions is a good idea. However, unfortunately it is not uncommon for the person named as attorney to use his position to take advantage of a vulnerable senior and to misuse his authority.
While examples of power of attorney abuse include the extremes, such as outright theft or changing title to assets, it can also be more subtle – such as an attorney who is also the main beneficiary of an estate not making appropriate expenditures for the incapable person’s benefit so as to protect his own inheritance.
The recent saga involving the estate of Mickey Carroll, best known for playing a Munchkin in the Wizard of Oz is a good example of the dangers of power of attorney abuse. Apparently, after Carroll’s death in 2009 his relatives became concerned that there was money missing from his estate.
They hired a private investigator to look into the situation and the investigator’s findings have resulted in the relatives suing Carroll’s former caretaker and three of her friends for more than $500,000. In their lawsuit, the relatives allege that during a time when Carroll was suffering from dementia, the caretaker and her friends convinced him to grant a power of attorney in their favour.
The suit further alleges that after obtaining the power of attorney, the caretaker and her friends convinced Carroll to take out a sizeable line of credit against his home and not long after that he started signing cheques made out to “cash” for tens of thousands of dollars – something that was inconsistent with his prior spending habits.
The relatives are seeking the return of the missing funds. In an interview she gave not long after Carroll’s death, the caretaker characterized the allegations of the missing funds as being “foolish”.