Criminalizing Exploitation of the Elderly and Its Effects on Estate Planning
For estate planning attorneys, the concept of criminal punishment is not the first thought when asked: “What could be the outcome?” In a typical case, the worst that happens is the client losses their share of an inheritance or perhaps ends up paying more taxes on the estate. However, Fla. Stat. §825.103 makes exploitation of an elderly person or disabled adult a criminal offense. But what is exploitation under the statute? A person is guilty of exploitation if they knowingly obtain or use, or endeavor to obtain or use, an elderly person’s funds, assets, or property with the intent to temporarily or permanently deprive the elderly person of the use of the funds, assets, or property. The person must be a person who stands in a position of trust and confidence with the elderly individual, or has a business relationship with the elderly individual. A Fourth District Court of Appeal case shows the slippery slope of how a situation that should be dealt with by a will contest can turn into a criminal trial.
In Cynthia Franke v. State, Cynthia Franke’s appealed her conviction for financial exploitation of the elderly. Franke and Mary Teris had been friends for almost thirty years and met when Teris became a client of the firm where Franke was a stockbroker. Franke and Teris became very close over the years and developed a mother/daughter type of relationship. Franke helped Teris, including driving her wherever she needed to go and helping with Teris’ two disabled adult sons.
In 1996, Teris created a special needs trust for her sons, a revocable trust, a power of attorney and a will. In 2008, Teris told Franke she wanted to make changes to the trust. Teris then met with an attorney and made multiple changes on June 22, 2009. Teris made Franke the trustee of trust instead of her sister, as well as a residuary beneficiary of her trust. Teris wanted to someone she could trust to manage her assets and take care of her sons, which is why she chose Franke as the trustee. She also named Franke as a residuary beneficiary because her sons were taken care of by the special needs trust, and her sisters did not need the money. Franke recognized the conflict between being a trustee as well as a beneficiary and as a result Teris amended the trust to remove Franke as a trustee, but she remained a beneficiary.
In 2010, Franke was arrested and charged with exploitation of the elderly. The trial court convicted Franke, and she spent close to two years behind bars before the Fourth District reversed her conviction. While the case was decided on technical criminal law grounds, the court did discuss the issue of property law principals. Because Franke was a beneficiary, she would not have received any of Teris’ property until Teris was deceased, even then she would only benefit if there was anything left in the trust. The court stated that it does not seem that obtaining the future expectancy of property under a will or trust is included in the statute. While this was not the reason the court overturned the conviction, the court hinted that future expectancy in a will or trust does not fall under the statute.
This article is intended to provide brief insight into a case law that may have implications on estate planning. Individuals interested in how this information will personally affect them should consult with an attorney. Do not hesitate to contact the attorneys of Chepenik Trushin LLP, who are ready, willing, and able to help with your estate planning needs.