REMARKS OF

GREGORY D. TOTTEN

ST. JOHN'S HEALTHCARE FOUNDATION

ESTATE AND GIFT PLANNING SYMPOSIUM

November 3, 2006

I am a little concerned about speaking to such an impressive group of professional experts in the field of estate and gift planning. Perhaps my trepidation stems from a painful law school memory. You see, Wills and Trusts was not one of my favorite courses. Moreover, my Wills professor was not particularly fond of me either – that is … if the grade I received was any measure of his affection.

So, by way of disclaimer, I am really hoping no one asks me any tough questions about the rule against perpetuities or the finer points of drafting a living trust. Given my namesake and career in public service, I am sure you can appreciate that the only trust I have had any personal experience with is the Totten Trust -- better known as the poor man's trust.

But seriously, I am grateful for the opportunity to speak to you about elder abuse at this third annual Through the Looking Glass program. Naming today's program after Lewis Carroll's great sequel to Alice's Adventures in Wonderland is fitting given your responsibility to project how actions you and your clients take today will affect their future security and financial well-being. Just like Alice attempting to understand Jabberwocky or make her next move in a nonsensical game of chess, you must interpret complex tax laws and make financial moves where the consequences are often unpredictable.

Through the Looking Glass is also an appropriate theme for any discussion of elder abuse for our collective response to this issue today may well define the quality of the golden years for generations to come. Combating elder abuse is really all about protecting freedom. When the aged are victimized, all too often they lose the financial independence and personal freedom that retirees most treasure. And, in extreme cases, they even lose their will to live and die prematurely.

When I consider the elders we are trying to protect, my thoughts always turn to my own maternal grandmother. She was a very gentle and humble woman who, despite hardship and suffering, brought joy into to the lives of everyone she touched. As a child, she witnessed her family lose everything and even saw the grief over their sudden turn of fortunes eventually take the life her father. Later, she was a single mother at a time when such circumstances were frowned upon. To raise her children and make ends meet, she worked in a factory during the day and as a seamstress at night. Her dress was always modest, she never knew the security of a large bank account, or the comfort of the cars and homes we take for granted.

But much like the Bible's account of the poor widow who gave her last two coins to the church treasury, my grandmother gave generously from the heart. She taught us important lessons of life and faith that shaped and still influence us today. Her life mattered. And though she was never a victim of elder abuse, the memory of her reminds me that there are lot of grandmothers and grandfathers out there who may be nameless strangers to us but who lead lives that have value and deserve protection.

Now, I don't mean to be preaching to the choir – for as lawyers, accountants, and insurers, you are all too familiar with elder abuse because you see the havoc it wreaks on your clients and their beneficiaries. Your role is further complicated by the legal duty you bear to protect the client relationship and confidentiality.

So today I do not seek to criticize or even imply that you are not already doing your part. Instead, my sole objective is to propose a partnership between you and the district attorney's office and other entities charged with protecting our elders. Simply stated, I need your help and I think you need my help, too.

The first part of this partnership involves working together to prevent abuse wherever possible. Sociologists tell us that within healthy cultures there exists a social compact of sorts where each generation honors the contributions of its predecessor by caring for their needs in old age. Pulitzer Prize winning author Pearl Buck put it best when she wrote, “The [truest] test of a civilization is in the way that it cares for its [most] helpless members.”

Demographers report that during the last century our senior population grew from around 3 million to more than 34 million. To put this is perspective, in 1900 1 out of 25 Americans was age 65 or older, by 2000 1 in 8 were 65 or older. And it's projected that by 2030 there will more than 70 million, or 1 in every 5 Americans 65 or older. California has the largest senior population in the country. Here in Ventura County , 11 percent of our population is over the age of 65 and this number is projected to double by 2020.

Notwithstanding these numbers, in our modern culture where so much emphasis is placed on youth, appearance, and athletic prowess our elders are often forgotten and ignored or worse, held in contempt for failing keep up with the fast pace of life. Many are isolated, lonely, and limited by physical and mental ailments. Alienation or benign neglect from their families is also common. These are the people that have worked a lifetime to purchase homes and accumulate resources for their retirement. Because they possess more personal wealth than any other age group they are perfect targets for criminals. They are also the people that are walking through the doors of your firms seeking services.

Let me give you several case examples:

•  An 81-year-old victim's grandson quit his job and moved in with her purportedly to take care of the ailing woman. Several years go by before a granddaughter discovers that the grandson has been running up the victims credit cards. She also discovers that the grandson took the victim to an attorney and had the attorney to prepare a springing power of attorney. Later, the grandson contacted the attorney and requested the power of attorney be immediate. Thankfully, the attorney declined to do that without first consulting with the victim.

•  In another case, the defendant is a caregiver at a senior facility where the victim lives. The defendant befriended the victim and had her authorize an ATM card for him, which he promptly used to deplete the victims entire life savings. If that was not enough, the defendant had an attorney draft a will leaving the balance of the victim's estate to him by stating that he was like a grandson to her. Fortunately, the will was never executed because the victim was unwilling to leave the facility to sign the will.

•  Another defendant quit her job to become the sole caregiver for her mother and grandmother, both of who suffered from dementia and early stage Alzheimer's. She convinced the victims to open a second mortgage on their home and promptly took $90,000 in proceeds to purchase a motor home. The loan agent and other professionals involved in the transaction did not question fact that they never saw or spoke to the victims. In an all too common scenario, the victim quit making payments on the mortgage and the house went into foreclosure.

Here in Ventura County , nearly 90 percent of all elder abuse cases prosecuted involve a perpetrator that is a family member and 50 percent of our elder abuse cases involve financial exploitation.

Statewide, the Department of Corporations reports that older Californian's have lost more than $3.8 billion to fraudulent investment schemes. It is also estimated that 70 percent of Californians over the age of 50 have been solicited by individuals intent upon defrauding them.

As professionals dealing with elders on a daily basis, you are in a unique position to prevent this type of financial abuse. There is a wealth of material now available for seniors to inform and educate them about the perils of elder abuse. For example, the California Bar Association has a wonderful publication available on-line as does the California Attorney General. I have also brought copies of our own Senior Handbook that can also be obtained on our Web site. Joan Allen of the Financial Abuse Specialist Team has developed a DVD for elders using dramatizations to explain typical scams and schemes they may encounter and give them the tools to protect themselves.

By taking just a few moments with your clients to give them these materials and warn them about elder abuse, you can make a difference and prevent them from becoming victims. Moreover, my office stands ready to help you and your clients. Each year we give countless presentations to senior centers, churches, and community groups that are intended to help seniors avoid victimization. Our victim advocates and investigators are also regularly contacted by seniors who suspect they may have been victimized and we work with other public agencies like adult protective services, local law enforcement, and the Area Agency on Aging to intervene and prevent further abuse whenever possible. So I hope you will view us as a resource and partner in this prevention effort.

Beyond prevention, I believe we can also use this partnership to enforce and in some cases even reform public policy affecting the protection of elders.

Over the last decade, the California legislature has enacted a number of significant reforms to address this problem including everything from a specific Elder Abuse Penal Code section to mandated reporting to greater regulation of fiduciaries and conservators.

In fact, effective January 1, 2007, a new mandated reporting scheme for financial institutions will go into effect. The new requirements, which can be found in Welfare and Institutions Code section 15630.1, makes officers and employees of depository institutions as defined by federal law mandated reporters. It imposes up to $5,000 in civil fines for the failure to report suspected elder financial abuse.

Additionally, in 2006 four separate bills were enacted into law to address problems with guardians and conservators that were the subject of a Los Angeles Times series last year entitled, “Guardians for Profit.” Collectively known as The Omnibus Conservatorship and Guardianship Reform Act of 2006, AB 1363, SB 1116, SB 1550, and SB 1716 establish a new regulatory and licensing scheme for professional fiduciaries that also imposes significant new burdens on the courts and fiduciaries themselves, again with the singular goal of protecting conservatees.

But, beyond enforcing these important policy changes, I believe there is need for more policy reform. For example, from our experiences here in Ventura County , conservatorship problems are not isolated to private guardians and conservators. As you may have read in the newspaper, we are prosecuting a public guardian for the systematic financial exploitation of conservatees.

And I am also aware of the quandary professionals –

particularly lawyers – face when it comes to reporting elder abuse involving a client. While existing law contains a permissive reporting statute for nonmandated reporters that provides a degree a protection from civil litigation for the voluntary reporter, unlike other states California law does not expressly contain an exception to the attorney client privilege for such reports.

A San Francisco Bar Association opinion offers persuasive authority that attorney in these circumstances can make limited disclosures and pursue a conservatorship for an at-risk client, but there is not statute that gives clear guidelines on this issue. This is a glaring deficiency in state law particularly when you consider that more than 80 percent of elder abuse either goes undetected or unreported. I think this is something that we should work on together to ensure that lawyers are encouraged to report suspected elder abuse involving their clients and don't have to fear civil consequences for doing so.

In the meantime, when facing this reporting dilemma, I urge you to call the State Bar's Ethics Hotline to gain counsel on whether one of the exceptions applies or even consider reporting it anonymously so some action can taken.

I know you all care deeply about your elder clients and carry a great sense of responsibility for their well being and financial security. I recognize that I have only touched upon this subject, but I want thank you for your attention and interest in this issue. I also want thank Mike Murray and the St. John's Foundation for hosting this important program.

So today, let us begin a partnership that works to better protect those who have given us so much. The famous poet, Robert Browning, envisioned well over 100 years ago that the final years of life should and could be the best years – the golden years. I look forward to working with each of you to make that vision a reality. Thank you.