Financial Elder Abuse

Financial Elder Abuse
in Contract and Real Estate Disputes

The legal meaning of “elder abuse” is broader than many people realize. The term encompasses commonly understood forms of abuse, such as physical mistreatment and deprivation of the necessities of life, but in California it also includes “financial abuse.” This is an important concept in many financial, contractual and real property disputes involving an elderly adult (which in California includes persons 65 or older).

Financial abuse occurs when someone hides or obtains the property of an elderly adult for a wrongful use, with intent to defraud or by undue influence. California law defines these terms so broadly that they apply to many different types of transactions. Virtually any denial of a property right, including through a contract of any kind, can constitute elder abuse. As a result, many transactions that have an appearance of legal validity can be challenged under California’s elder abuse statute if a plaintiff can show wrongful use, intent to defraud or undue influence.

“Undue influence” means excessive persuasion that overcomes a person’s free will. Courts consider the following factors to determine whether there has been undue influence:

The vulnerability of the victim, as evidenced by (among other things) illness, disability, impaired cognitive function, emotional distress, isolation or dependency;
The influencer’s authority over the victim, including influence arising from status as a family member, fiduciary or health care provider; and
The tactics used by the influencer, such as controlling access to information, use of affection or intimidation and haste or secrecy in causing changes to the elderly adult’s property rights.

“Wrongful use” includes the taking or misappropriation of any property that the defendant knew, or should have known, is harmful or likely to harm to the elderly adult.

For example, many seniors invest savings in real property ventures, partnerships or other investment vehicles. Often the contractual paperwork is poorly drafted or one-sided, and sometimes there is no written contract at all. In normal circumstances, deficiencies in deal documents may prevent or hinder someone whose money has been misused from recovering in court. A financial elder abuse claim provides an alternative path to recovery. California law, in effect, provides elderly adults heightened protections against financial losses.

Financial elder abuse claims are especially useful given the potent remedies available to plaintiffs. As a general rule, each party to a lawsuit must pay his or her own attorneys’ fees and costs. But California’s elder abuse statute provides a successful plaintiff the unilateral right to recover those fees and costs, in addition to the funds that were misappropriated. In some circumstances, punitive damages and restraining orders are also available. The strength of these remedies makes them important tools to generate leverage in litigation and can help a plaintiff reach an early, favorable settlement.

If you or a family member needs protection from financial elder abuse, the experienced professionals at Capobianco Law Offices can help.