Helping Families Navigate the Financial Challenges of Age Transitions

Month: January 2020

What is Undue Influence?

Ellis Hanson was once a brilliant engineer who was partially responsible for the development of computer typesetting that made him a wealthy man upon his retirement. He and his wife, Velta, purchased their retirement home in Naples Florida and he did well in the stock market, investing his money well. By the early 2000s, however, his cognitive abilities were declining, and the couple turned to a banker to handle their finances. On September 30th  2008, Hanson pulled a small piece of paper out of his pocket and stared at it blankly. Not understanding what it was, he asked his wife to look. It was a receipt for a $260 lunch in Naples.

Velta Hanson was surprised. Her then- 84-year-old husband, a brilliant engineer in the early stages of Alzheimer’s disease, had no recollection of eating there hours earlier. Velta Hanson hired a private investigator. But days before receiving his report, she found a letter revealing her husband had written a $10,000 check to a friend of two decades, Alma Teti. That was the day she asked her husband if she could take over their finances. It turned out that was just a fraction of what Ellis Hanson had given Teti. In addition to the lunch, there was also more than $1 million in checks from 2006 to 2008, nearly $85,000 in jewelry since 2005, including a $26,000 blue stone ring for her birthday, and thousands in expensive lunches, champagne and drinks.

In 2009, the couple sued Teti, alleging exploitation of a vulnerable adult and conversion of personal funds, illegally depriving the Hansons of their property. Florida law defines a vulnerable adult as someone 18 or older whose ability to perform the normal activities of daily living or provide his or her own care or protection is impaired due to a mental, emotional, long-term physical or developmental disability or dysfunction, brain damage or infirmities of aging. A three-day jury trial resulted in a judgment of over $2 Million against Teti.[1]

The means by which Alma Teti committed her offense is often referred to as Undue Influence. Undue Influence is the misuse of one’s role and power to exploit the trust, dependence, and fear of another to deceptively gain control over that person’s decision in a particular matter. Along with capacity and consent, Undue Influence is a key concept in elder law. Capacity and consent relate primarily to an individual’s abilities to understand and process information in order to take action or to make decisions. Undue Influence focuses more on the relationship between the individual and another person, coupled with that person’s opportunity and power to manipulate the vulnerable person’s thoughts and actions. An older person may be more vulnerable to Undue Influence because he or she has diminished capacity, or the person has become isolated from trustworthy family and friends.

The legal standard for Undue Influence has been defined as influence that amounts to deception, force or coercion that destroys a person’s free agency.[2] Undue Influence arises most predominantly in probate, trust and estates, power of attorney and guardianship matters. Undue Influence typically is not itself a crime, but it can be a means for committing a crime.

Undue Influence can take on other, more subtle behaviors as well. For example, the following may constitute Undue Influence if the resulting actions deprive an older person of their free agency in making a decision:

  1. An adult child threatens to stop visiting her elderly mother unless she gives her the silver dinnerware that she had been promised.
  2. A new companion convinces an older man to give her power of attorney because his children never come to see him and don’t care for him like she does.
  3. A representative of a religious ministry regularly visits an elderly shut-in and convinces her to make a large donation to the ministry after he assures her that “God will bless her abundantly” if she makes a sacrificial gift.

What’s important to remember about Undue Influence are the position of power that one individual may hold over another because of the relationship between them, and the opportunity to misuse that power through manipulation.  Here are a few tips to guard our elderly loved ones against Undue Influence.

  1. Avoid social isolation. When an older person has an active social life around lots of family and friends, the influential power of someone wishing to manipulate them is minimized, and the opportunities to do so are less available.
  2. Be aware of cognitive decline. Diminished capacity increases the vulnerability to Undue Influence. Maintain an attitude of honor and avoid patronizing language or tones such as baby-talk while honestly discussing any concerns you have with your older loved one.
  3. Adopt a family code of honor. All of the world’s great wisdom traditions have honoring parents and the elderly as a core tenant. It’s time to practice it. What is your family’s honor code?

Undue Influence is a very complex legal concept and should not be lightly alleged. If you believe that a loved one is being unduly influenced, contact an attorney licensed in your state with expertise in elder law.

[1]; Judge rules family friend exploited, took $2 million from Naples man with dementia, By Aisling Swift, Saturday, July 23, 2011

[2] Assessment of Older Adults with Diminished Capacity: A Handbook for Lawyers

Financial Planning Does Not End at Retirement

With the new year, I’ve entered my 36th year in the financial services industry. Just writing this fact feels strange. I’ve never characterized myself as a veteran of the industry, feeling instead that I’ve just hit my stride. The years however tell me differently and it’s easy to understand how senior professionals can feel marginalized. I chose a doctor several years my junior so that as I aged, he’d still be in practice. Understandably now, clients want to know who my back up is “just in case.”

The financial planning industry has done an admiral job of preparing people for two pivotal moments: Retirement – that magic age when one stops earning a paycheck, travels the world, plays golf every day, and enjoys a life of leisure; and Death – the final moment beyond which our assets and legacy are left to our heirs. It has done a poor job of equipping advisors to address the financial planning issues of the period in between. Sure, advisors sell long term care insurance to forty and fifty-somethings for this period, and others sell annuities to seniors skittish about the financial markets, but these are product solutions aimed at the senior market, not financial planning discussions. In a similar way, a walker solves an issue with balance and prevents falls, but a walker is not a comprehensive plan for health and wellness throughout life.

While there are several common financial planning issues for every age demographic, there are also many unique financial planning needs of the senior market.

Common Financial Planning Issues

  • Ensuring adequate cash flow throughout life.
  • Evaluating and addressing risks to financial independence.
  • Determining the financial impact of major life events.
  • Minimizing income tax.
  • Allocating investment resources to accomplish current and future goals.
  • Defining a plan for the distribution of accumulated assets at death.

Financial Issues Unique to Seniors

  • Plan for downsizing or home modification
  • Relocation plan if distant from family
  • Plan for continued social engagement
  • Family business succession
  • Identity and fraud protection
  • Annual Medicare elections
  • Developing a dependency plan to include
    • Living arrangements
    • Persons in charge of financial decisions
    • Persons in charge of healthcare decisions
    • Transportation needs

It’s tempting to ask how a plan for continued social engagement is a financial planning issue. With social isolation a major contributor to poor health among seniors[1], and healthcare costs absorbing a significant portion of a senior’s resources, a plan for social engagement as we age should be an integral part of the financial planning conversation with seniors.

Annual Medicare elections are another example of an often-confusing labyrinth of decisions that can have significant financial impact for years.

Identity theft and elder financial fraud are estimated to cost seniors between $3 and $30 Billion a year[2], and nearly everyone I know over age 70 has been targeted. A plan that includes identity theft protection as well as vulnerabilities to undue influence inside of familial relationships needs to be included.

Plans for living arrangements, whether aging in place, or facility care, should be discussed long before the actual need arises. Just as saving for retirement doesn’t begin at age 65, neither should plans for where someone lives out the remainder of their life be delayed until the 11th hour.

Family meetings to discuss an aging client’s dependency plan should be also be held long before a dependency event occurs. It helps assure family members that a plan is in place, informs them as to who-does-what-when, and when done early enough and under the direction of the aging client, preserves his or her seat of honor at the head of the table.

Family Business Succession has been a central component of financial and estate planning for years and is the least neglected area of financial planning for seniors among those who own a multi-generational family enterprise. Still, nearly 60% of the small business owners surveyed by Wilmington Trust, do not have a succession plan in place[3].

In conclusion, financial planning does not end at retirement. As one client reminded me years ago, “retirement is just another word for thirty years of unemployment.” It doesn’t look the same for all seniors but when practiced with integrity, it can be extremely beneficial to the entire family, and rewarding for the financial planner who chooses to serve this market.

[1] National Institute on Aging. (2020). Social isolation, loneliness in older people pose health risks. [online] Available at: [Accessed 7 Jan. 2020].

[2] Consumer Reports. (2020). Financial Elder Abuse Costs $3 Billion a Year. Or Is It $36 Billion?. [online] Available at:–3-billion—–or-is-it–30-billion- [Accessed 7 Jan. 2020].

[3] (2020). [online] Available at: [Accessed 7 Jan. 2020].

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