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Texas Tech Univ. School of Law

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Saturday, May 3, 2014

Guest Post by State Director of the National Organization to End Elder Financial Abuse

The following is posted as a courtesy to Mr. Tom Fields, State Director and Board Member, National Organization to End Elder Financial Abuse:

The National Organization to End Elder Financial Abuse (EFA) is a non-profit corporation that was founded in 2011 by Kathleen Ryan.  EFA recognizes the same problems that Eike G. Hosemann (LL.M. (Harvard). Research Fellow, Max Planck Institute for Comparative and International Private Law, Hamburg, Germany) addresses in his recently published article entitled, Protecting Freedom of Testation: A Proposal for Law Reform, 47 U. Mich. J.L. Reform 419 (Winter 2014).  These problem are (1) the use of wrongful means such as undue influence or will forgery to acquire benefits through inheritance, and (2) the inadequacies of the remedies under inheritance law, tort law, and equity to deter this undesirable behavior.

More narrowly, EFA addresses the financial exploitation of older adults and others with severe cognitive impairment and vulnerability at the time they execute wills, trusts, POAs, deeds, mortgages and other important legal/financial documents -- and the ruinous litigation which often results under such circumstances. 

In order to provide a greater deterrence against such behavior, Mr. Hosemann has proposed a “disinheritance statute” which would bar wrongdoers from inheriting from their victims, not unlike the slayer statutes adopted by many state legislators in order to deal with “murdering heirs.”  

EFA board member Tom Fields has proposed several other legal reforms for the same purpose of deterring wrongdoers.  One simple proposal calls for the following 

Any financial or legal document, including a will, deed, trust, contract or POA, whose validity is challenged will be presumed to be invalid if there is credible evidence that it would have been exceptionally difficult for the subject executing the document to have studied the document due to a physical or mental impairment.  Under such circumstances, this presumption will not be overturned if there is substantial evidence that

1)      the subject’s impairment was exploited for financial gain or other personal benefit during the document’s drafting and/or execution, or

2)      the probate code, professional codes of ethics, the Americans With Disabilities Act or other applicable rule of law was not fully complied with. 

The person(s) who draft the document will be responsible for ensuring that the subject’s impairment is not exploited during the drafting of the document.  If it is proved by a preponderance of the evidence that the subject’s impairment is exploited during the drafting of the document, then the drafter(s) of the document will be responsible for all costs incurred by all parties involved in any litigation which results from the drafting of the document.

Similarly, the person(s) who present the document will be responsible for ensuring that the subject’s impairment is not exploited during the execution of the document.  If it is proved by a preponderance of the evidence that the subject’s impairment was exploited during the document’s execution, then the document’s presenter(s) will be responsible for all costs incurred by all parties involved in any litigation which results from the document’s execution. 

On 4/2/2014, Mr. Fields submitted an earlier version of this proposal to William Weisenberg, the Ohio State Bar Association’s Assistant Executive Director.  In response to Mr. Weisenberg’s initial feedback, and after consultation with other EFA board members, including EFA’s chief counsel Robert Brown, Mr. Fields amended his proposal and resubmitted it to Mr. Weisenberg, who has indicated that he will forward this proposal to his association’s Estate Planning, Trust and Probate Section as well as some other committees for their review. 

For more information about EFA, go to EFA’s website www.efanow.org.

http://lawprofessors.typepad.com/trusts_estates_prof/2014/05/guest-post-by-state-director-of-the-national-organization-to-end-elder-financial-abuse-.html

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