If you have any dealings with a person aged 65 or older, you need to get your hands on a copy of the new Section 32.55 of the Texas Penal Code. Memorize it. Use it to measure every future action.
And maybe, just maybe, you can stay out of jail.
What is Section 32.55?
Section 32.55 creates an offense for financial abuse of an elderly person. This is not a slap- on- the- hand crime – the charges range from a Class B misdemeanor to a first- degree felony, depending on the value of the property involved. To put it in perspective, a first -degree felony kicks in for property valued at $150,000 or more and carries a maximum sentence of 99 years.
Family members, business partners and advisers need to focus on the part of the statute that defines financial exploitation, which is a type of financial abuse. As we delve deeper into the language, see if you can come up with a scenario that looks innocent on the surface but could easily be construed as exploitation under the statute.
Who Does Section 32.55 Apply To?
Section 32.55 spells out the type of suspect relationships involved in financial abuse. It includes everyone commonly found within a senior’s inner circle: a parent, spouse, adult child or other relative by blood or marriage, a joint tenant or tenant in common, someone who has a legal or fiduciary relationship, a financial planner or investment professional who provides services, and a paid or unpaid caregiver. Note especially the breadth of family relationships. Son? Check. Daughter-in-law? Check. Grandchild? Check.
What is Considered Exploitation?
Exploitation means – and please forgive the list, but every word is important – the wrongful taking, appropriation, obtaining, retention or use of money or other property.
Let’s focus on the word “use” for a minute. If you drive your elderly mother’s car, isn’t that a type of use? If you move into your elderly father’s house and don’t pay rent, isn’t that a type of use? Suddenly common actions in a family setting start looking sinister.
Now let’s look at the type of behavior that is considered exploitation. The statute provides that exploitation may involve coercion, manipulation, threats, intimidation, misrepresentation or exerting undue influence. It then gives 4 specific examples.
The first one is a breach of a fiduciary relationship, such as misusing a power of attorney or abusing guardianship powers, that results in the “unauthorized” appropriation, sale, or transfer of the senior’s property. That should make any agent think twice before making an investment or selling an asset for the senior.
The second one is the unauthorized taking of personal assets. Thinking about helping yourself to the family china or your elderly mom’s jewelry? Bad idea.
The third one is taking money from the elder’s personal or joint account. All those adult children who are convenience signatories to their parents’ accounts may want to reconsider.
The first three examples are serious, but the fourth one is just plain scary. It deserves to be quoted verbatim: “the knowing or intentional failure to effectively use another person’s income and assets for the necessities required for the person’s support and maintenance.” Wow. What does “effectively use” mean? What type of necessities are required for support and maintenance? Does this criminalize some common Medicaid planning techniques? Will anyone ever want to help an aging family member manage finances with this type of criminal liability out there?
Financial abuse is a huge problem. It should be criminalized. You just may be a bit surprised about what is considered criminal activity.
Virginia Hammerle is president of Hammerle Finley Law Firm. She is an Accredited Estate Planner, has been Board Certified in Civil Trial Law for 25 years, and recognized as a Super Lawyer for the past 10 years. She blogs regularly on senior issues and the law and has a monthly newsletter. Contact at email@example.com.