Consider Elder Protection Trust For Aging Vulnerable Parent

By Phil Rarick & Jacqueline Bowden Gold, Weston Probate Attorneys

An Elder Protection Trust – or EPT Trust - can be a critical tool to fight back against financial exploitation of an elder parent.

Forbes reports, “Although massively underreported, financial exploitation is increasingly becoming a rampant form of abuse among aging adults, particularly those with cognitive impairments such as Alzheimer’s disease or other types of dementia. These crimes are now so widespread that elderly financial abuse is often called “the crime of the twenty-first century.”

Stories such as the following have become common:

Joe’s Story: Joe, age 79, and proud father of three children is now retired in South Florida, continues to drive and live in his own home. All three adult children live outside of Florida. Joe is showing early stages of dementia and is being cared for 5 days during the week by a young, female caregiver who strictly monitors all calls coming in to Joe and all visitors. The caretaker writes checks for father to sign and opens all his mail. The children are concerned that the caregiver may be writing checks to herself after getting Joe to sign blank checks.

Marta’s Story: Marta, age 83, is a former high official of the FTC but now periodically shows signs of Alzheimer’s disease. She lives in Ft. Lauderdale with Frank, her youngest son, who cannot hold regular employment and is constantly in debt. Marta’s home is paid off. She has two other adult children, Larry, a CPA, and Melissa, a school teacher. Larry and Melissa believe that Frank may try to convince Marta to sign off on a line of credit on her house, and that he will then waste the money at Seminole Hard Rock Casino.

Joe and Marta have one thing in common: both would be extremely angry if any child tries to petition the court for a guardian to take away their personal freedoms and supervise their affairs. Are there any other solutions?

Provided Joe and Marta are still capable of understanding their financial affairs - even if they have bad days where their memory is not reliable - the answer may be an Elder Protection Trust. The benefits of an EPT Trust are many:

1. Control and security over financial affairs. With an EPT Trust, the parent can give the trusted child (or children as Co-Trustees) 100% control over the parent’s financial affairs. A trust is a way to give a third party – called a Trustee – complete legal control over financial matters.

Note #1: Another popular instrument to accomplish these same objectives is a Durable Power of Attorney (DPA). However, a DPA is a weak sister to a Trust; the Trust is much stronger. Still, the best solution is often to have both: the parent should establish a Trust and sign a DPA.

Note #2: Of course the key here is giving these strong powers to the trusted child or children. Any legal instrument can be subject to abuse if given to the wrong person.

2. Protect Parent From Exploitation. The EPT Trust can be made irrevocable, so the parent who is showing signs of unrelenting slippage of mental capacity cannot be unduly influenced to change the trust by an exploiter masquerading as a “caring” person.

3. Help Protect Lifestyle Of Parent In Manner They Have Become Accustomed.

A well designed EPT Trust can help protect the life style of the parent. It can ensure that limited funds and resources are used in a prudent and efficient way to help the parent maintain a high quality of life. It can protect limited funds from being siphoned away by foolish

decisions of the parent – such as buying a worthless timeshare from a scam caller.

4. Qualify For Medicaid – and Long Tern Care Benefits. The big hole in Medicare is that it does not pay for Long Term Care. However, Medicaid does pay for both nursing home care and care in the home. Medicaid has strict requirements and limits: for example, in 2019, an applicant cannot have more than $2,313 per month of income or $2,000 in assets. Assets transferred to an EPT Trust five years prior to application can help the elder person qualify for Medicaid.

Note: There are numerous legal options to qualify for Medicaid without waiting for the 5 year period. Contact us for a Medicaid Consultation.

5. Avoid the Cost, Stress – and Anger of Guardianship

The Florida default remedy to protect an aging parent suffering from a form of dementia is Guardianship. This is an often costly process whereby the court must intervene and appoint a family member or professional guardian to supervise the person and property of the parent. The cost to establish a guardianship can easily be $5,000 or more. After the guardianship is established there are annual fees to file reports to the court and typically more fees during the year. If you wait too long – where the aging parent can no longer make coherent conversation – then guardianship may be your only remedy. This is why timing is so important – see below. However, maybe as bad as the cost, is the stress that the court proceedings cause on all involved – the adult children and the parent. The parent may feel angry: mad that or she is being “betrayed” and the children are seeking to take away all her personal freedoms.

1. Elder persons, if competent, have many legal options under Florida law to avoid exploitation, beginning with an Elder Protection Trust. As discussed here, the EPT can serve many functions, but the most important being to help preserve a high-quality of care for your loved ones.
2. Do Not Wait - Timing Is Critical. The longer you wait, the legal options are fewer and more expensive.

Trust Attorneys at Rarick & Bowden Gold, P.A. have over 60 years of combined experience in designing legal plans to protect your family and business. To see if an Elder Protection Trust is a good legal option for your family, call Jacqueline Bowden Gold at (305) 556-5209 or email her at jbowden@raricklaw.com.