Fort Myers, FLAn elderly woman who earned just $1,800 in monthly income between her Social Security check and her pension was somehow persuaded to take out a life insurance policy worth $7.5 million. According to her son’s financial elder abuse attorney, the woman was saddled with a trust and allegedly persuaded to take out a loan valued at $1.1 million in order to satisfy premiums of $742,000. The woman’s son, who carries on with a Financial Elder Abuse lawsuit on behalf of his now-deceased mother, notes that such alleged deception of vulnerable individuals should serve as a rallying cry for advocates concerned about financial exploitation of seniors.
“I was beside myself,” said her 55-year-old son Michael Sterling, in comments published in The News-Press of Fort Myers (9/8/13). “After I read through that policy, it was like, here’s the one guy that she and her late husband had entrusted...and then [her financial adviser] could do this to them?”
The alleged elder abuse financial issue has its roots in 2006, when Gloria J. Emmert was 79 years of age and living modestly in a manufactured home located in North Fort Myers, Florida. The widow suffered from dementia and Alzheimer’s disease.
Elder financial abuse is not just a problem in Florida, which is a haven for snowbirds and retirees. It happens right across the country, prompting inclusion, in 2010, of the Elder Care Justice Act as part of the Patient Protection and Affordable Care Act.
In California, Governor Jerry Brown signed into state law Assembly Bill (AB) 381 - legislation that allows courts of law to award attorney’s fees and costs to seniors victimized by powers of attorney acting in bad faith and apart from the best interests of the senior entrusted to them.
This point was driven home by a recent case in California that saw a former Alameda County Superior Court judge plead no contest to relieving a 97-year-old neighbor of her life savings while serving as her power of attorney. According to The San Francisco Chronicle (8/2/13), Paul Seeman befriended Anne Nutting and her late husband (who died in 1999), obtaining powers of attorney for the couple. Seeman, according to charges filed in California last year, gained control of Nutting’s finances and barred her from her home from 1999 - the year her husband died - through 2007. Forcing her to take a room in a hotel for those eight years, Seeman is said to have sold off her art collection.
According to The Chronicle, Seeman stepped down from the bench in March and is barred from seeking judicial office in the state. He has also been disbarred from practicing law in the state of California and pled no contest to the charges. In a plea deal, Seeman will avoid jail time and is expected to face five years of probation when his sentencing takes place October 22. Anne Nutting passed away in 2010.
In Florida, Michael Sterling is carrying the legal torch for his late mother. According to his elderly financial abuse lawsuit, the $7.5 million life insurance policy was based on an application using fraudulent information pertaining to Emmert’s finances. Premiums on the policy were $742,000. In order to fund the premiums, a loan amortized over 30 months was arranged at an interest rate of 17.95 percent. With interest factored in, total cost of the loan ballooned to $1.1 million which, according to the lawsuit, “far exceeded the entirety” of Emmert’s assets.
Emmert’s elder financial abuse exploitation continued with the establishment of the Gloria J. Emmert Estate Reduction Trust, which was named sole beneficiary of the insurance policy. A secondary trust, or sub trust, was created to hold responsibility for the loan.
In theory, upon Emmert’s death the policy would pay out $7.5 million minus the cost of the $1.1 million loan, with final proceeds of $6.4 million to the primary trust. It was never established who was beneficiary of the primary trust. However, defendants in the lawsuit are thought to have benefited through the earning of commissions or other forms of compensation stemming from the issuance of the life insurance policy.
Elderly financial abuse is known to be a common problem in Southwest Florida, where many elderly Americans go to retire. According to The News-Press, there were 25 arrests for elderly financial exploitation in Lee and Collier counties since 2008. However, advocates note that the vast majority of financial abuse cases are not reported and fall under the radar.
“Oh my gosh, that seems very low,” said Dotty St. Amand, co-chair of the Lee Elder Abuse Prevention Partnership. St. Amand stated further that many cases of financial abuse elderly are underreported out of embarrassment, or if the adviser is someone whom the victim knows. In Emmert’s case, the primary financial adviser and catalyst of the multimillion-dollar life insurance policy was someone who had been advising both Emmert and her late husband for about 20 years. St. Amand also noted that seniors who suffer from dementia and who live alone are favored targets.
“Data around elder abuse in general (are) very limited,” said Kathleen Quinn, executive director of the National Adult Protective Services Association based in Springfield, Illinois, in comments published in The News-Press. Emmert’s son, who carries on his mother’s lawsuit after Emmert passed away, can’t understand what would lead someone to introduce such an idea to a vulnerable senior. “My mother could never have afforded the monthly premiums on a face value of that loan,” Sterling said. “She only made $1,800 income,” between Social Security and her pension.
According to the report, 10,000 Baby Boomers turn 65 every day in the US. That suggests an increase in elder abuse cases, and the need for a financial elder abuse attorney to sort through the mess in the aftermath.
According to an attorney hired by Sterling and skilled at financial elder abuse law, when the $1.1 million loan was taken out to fund the premiums for the $7.5 million policy, there were no scheduled payments for the $1.1 million loan and there were actually penalties for making payments prior to the loan maturing.
Emmert died in December of last year, at age 86. Sterling filed an updated lawsuit in Lee County circuit court in July. Defendants include Bill Basler, Erica Basler, David M. Jones and Wells Fargo Advisors LLC. Counsel for Jones, contacted by The News-Press, stated that allegations in the suit against his client were without merit. Wells Fargo Advisors would not comment on the specific litigation, but noted the firm was recognized in May for its efforts to address elder financial abuse.
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