Preventing Financial Exploitation

The following article is provided as a courtesy by its author. It is provided for informational purposes only, and should not be taken as legal advice. You SHOULD in every case act or rely only upon the advice of an attorney who practices extensively in this area of the law. You SHOULD NOT in any case act or rely upon written materials of a general nature, such as the following article.

Arizona has very strong statutes on financial exploitation. The statutes provide for a duty to notify, a duty not to cause or permit illness or injury, and a draconian remedy of forfeiture. The notice statute provides that certain people must report exploitation, abuse or neglect of an incapacitated or vulnerable adult (the Adult) to a peace officer or an adult protection service worker. The people who must make reports include:

  1. Medical providers;
  2. Social workers;
  3. Peace officers;
  4. Someone who has responsibility for preparing the tax records for the Adult, including an attorney;
  5. Anyone who has responsibility for the care of the Adult;
  6. Anyone who has responsibility for any action concerning the use or preservation of the Adult’s property.

Under the injury statute, certain people can be guilty of a Class 5 felony if they “cause or permit” the life of the Adult to be endangered, or his health to be injured or endangered, by neglect. The classes of persons that can be guilty of the Class 5 felony are:

  1. Someone who has been employed to provide care;
  2. Someone who is a de facto guardian or conservator;
  3. Or who has been appointed by a court to provide care.

The injury statute provides that the adult or the state may file an action and the damages may include consequential and punitive damages, attorney’s fees and the costs and expenses of the prosecution and investigation. The standard of proof is only by the preponderance and the statute of limitations is a very generous seven years after actual discovery. The cause of action is not affected by the death of the adult.

The forfeiture statute is perhaps the most draconian of all three of these. It provides that someone who breaches his trust or who steals from the Adult by intimidation or deception forfeits his entire inheritance. Read literally, the statute has the effect that if son, who has his millionaire father’s power of attorney, is foolish enough to eat out one evening at dad’s expense, son has forfeited his entire million dollar inheritance. There is no provision in the statute for proportionality. The statute is phrased so that any breach of trust will cause a complete forfeiture.

The forfeiture statute provides a powerful reason why, if you are handling someone else’s affairs, even only under a Power of Attorney, you should have an attorney help you.

People who are in a “position of trust and confidence” and who are, therefore, subject to the forfeiture statute, include anyone in a fiduciary relationship to the adult, including a de facto guardian or de facto conservator. It also includes someone who has assumed a duty to provide care to the adult, and a joint tenant or a tenant in common.