FINANCIAL EXPLOITATION OF THE ELDERLY

REVOCABLE LIVING TRUSTS,LIFE INSURANCE &

ANNUITIES“Financial Exploitation” ?

Donald Akers, Jr.Assistant District Attorney

16th Judicial District of Louisiana

WORLD ELDER ABUSE AWARENESS DAY 2012June 11, Slidell, LA June 13, Acadiana

APPROVED OR DENIED **

* * Except for Louisiana Citizens ??

‘the 4 most essential documents that Suze believes everyone must have:’

Will

Advanced directive and durable power of attorney for healthcare

Financial power of attorney

Revocable living trust

www.suzeorman.com/igsbase/igstemplate.cfm?SRC=MD012&SRCN=aoedetails&GnavID=84&SnavID=30&TnavID=&AreasofExpertiseID=113

THE LOUISIANA TRUST CODELa. R.S. 9:1721 et seq

The trust is the owner of the property transferred to the trust and is managed by a trustee for the benefit of a beneficiary

Trusts can be created during life (living trust) or in a will (testamentary trust)

Trusts can be “revocable” or “irrevocable”

Trusts are used for many legitimate & lawful purposes

MARKETING TO THE ELDERLY

THE “FREE” LUNCH SEMINAR

Lure Leisurely Senior Citizens who have Time & Assetssuch as Retirement Funds & Real Estate

Provide for Higher returns in low return conventional markets (increased risks!)

“Free” evaluation of your portfolio, accounts & insurance

“Trust Mills” selling living trusts

But It Must Be Legitimate !

THE LOCATION & THE SPONSOR “EFFECT”

Assisted Living Complexes

AARP and Senior Group Meetings

Nursing Homes

Retirement Communities

Churches

University Leisure Classes

Trusts: A Method of Financial Exploitation in

Louisiana?Revocable Living Trusts: FACT or MYTH

Saves Inheritance & other Taxes

Avoids Probate

Costs & Attorney Fees are less than Wills /Probate

Prevents Freezing of Assets on Death

Protects All Assets

Cannot be Contested

Avoids Public Records Disclosure

Avoids Louisiana Forced Heirship Law…

LIFE INSURANCE & ANNUITIES …A New Trend in Financial Exploitation?

Independent Insurance AGENT SENTENCED TO 90 DAYS IN JAIL FOR FELONY THEFT conviction, sold complex “indexed” annuity to an 83 year old woman alleged to have shown signs of dementia…

Case Prosecuted under California Elder Protection statute.

Agent alleged the woman “appeared fine and wasn’t confused at the time of the transaction” and that he acted appropriately.

One agent said “There is nothing in insurance –licensing that prepares you as a nonmedical person to diagnose dementia.”

The company returned principal with interest and no penalties

An Alert Banker Reported It ! Bank Manager notified adult protection agency when customer appeared

confused and influenced by her boyfriend to withdraw $175,000 to purchase the annuity

AND IN THE ACADIANA AREA …

An area financial services company received an alert and caution from their corporate headquarters about the conviction reported in the Wall Street Journal

A financial consultant was contacted by his former customer an 83 year old man whose 81 year old wife suffered from Alzheimer's disease. The gentleman had unexpectedly closed his accounts of more than 20 years, withdrawing about $500,000 dollars.

Anatomy of a Life Insurance & Annuity Sales Transaction

• 83 year old elderly man (with an 81 year old wife with Alzheimer’s Disease) reports he started receiving calls from a non-local insurance sales agent many months before he was visited at home

• He reports the agent claimed his company’s interest rates were higher than his financial services company investment in short term bonds with a 2.5%-3% annual return

• He reports that the agent had him close his financial services account and sold him the following:

$ 100,000 Life Insurance (whole life) - 14 year surrender

$ 315,000 Index Linked S&P 500 Annuity - 16 year surrender

$ 160,000 Variable Universal Life Insurance

Total: $575,000

• He reports that he contacted his former financial advisor asking for help because he didn’t understand what he bought and needed $10,000 to pay taxes due to transactions and has no liquidity.

• He reports he was referred to elderly protective services and was advised to file a complaint with Louisiana Department of Insurance.

• He reports he receives a call and visit from the insurance broker who had received the complaint and was advised that if he dropped the complaint, he could receive funds sufficient to cover taxes due from cashing out bonds.

• He reports that he signs documents provided to him by the insurance agent dropping the complaint (reports he learned the document dropped all and not just one with cash available).

• He reports he paid his taxes, has no further liquidity and continues to look for help

ISSUESA “Crime” or A “Civil Matter”

Legal/Compliance Department says: “don’t participate”!

Why is this happening?

• Indexed annuities are attractive to agents because of high commissions, often 12% or more of the invested amount.

• Historically low interest rates and a volatile stock market draw buyers, especially fixed income investors.

FILE COMPLAINTS Louisiana Department of Insurance

Investigates your complaints against companies, agents, or adjusters

http://www.ldi.state.la.us/ConsumerComplaintForm/Complaints/Welcome.aspx

Web Site: http://www.ldi.state.la.us/

Phone: (800) 259-5300 -or- (225) 342-5900

Fax: (225) 342-3078

WHAT IS BEING DONE ?

• Class Action Lawsuits by Victims in many states are being brought for this ripe area of Consumer Fraud

• State Elderly Protective Agencies are focusing on these issues

• State Bar Associations are taking action

WHAT CAN YOU DO ?

• Take Time to Decide, Is it Too Good To Be True?

• Consult with YOUR attorney, accountant, banker or financial Advisor BEFORE YOU BUY A PRODUCT

• If you need a Trust or other Estate Planning, seek the advice of a reputable, licensed professional who deals directly with you

ADDITIONAL RESOURCES

LOUISIANA OFFICE OF FINANCIAL INSTITUTIONShttp://www.ofi.state.la.us/

Investment Adviser Public Disclosure Checkprofessional background and conduct, current registrations ,

employment history, and disciplinary events

8660 United Plaza Blvd.Second Floor

Baton Rouge, LA  70809-7024

Mailing Address:Post Office Box 94095

Baton Rouge, LA  70804-9095

Main Phone:   (225) 925-4660Fax: (225) 925-4548

Contact Information

• Donald D. Akers, Jr.Assistant District Attorney, Elderly Protective Services16th Judicial District of Louisiana300 Iberia Street, Courthouse Suite 200New Iberia, LA 70560-4583Phone: 337-369-4420Direct Ph: 337-365-3886Direct Fax:  337-365-3886

 • Additional Ph: 337-367-8451

Alternate Fax: 337-365-7034email: dakersjr@cox.net

• Website: www.16jda.com