BILL ANALYSIS
SENATE JUDICIARY COMMITTEE
Adam B. Schiff, Chairman
1999-2000 Regular Session
SB 1742 S
Senator Hughes B
As Amended March 30, 2000
Hearing Date: April 4, 2000 1
Welfare and Institutions Code 7
GMO:pjs 4
2
SUBJECT
Financial Abuse of Mentally Impaired Elder Adults
DESCRIPTION
This bill would:
Authorize any peace officer, member of a county financial
abuse specialist team (FAST), or public guardian of a
qualified county to report incidents of financial abuse
perpetrated against mentally impaired elder persons.
Authorize trained peace officers to issue a declaration,
as specified, that an elder person is unable to manage
his or her financial resources or to resist fraud or
undue influence, that there exists significant danger
that the elder person would lose all or a portion of
his/her property as a result of the fraud or undue
influence, and that there is probable cause to believe a
crime is being committed against that elder person.
Authorize the public guardian to then immediately take
charge of the elder person's property without determining
whether a conservator of the elder's estate should be
appointed and whether the public guardian would apply for
the appointment.
Establish a process whereby a person identified as a
victim in the peace officer's declaration may bring an ex
parte petition to quash the certification.
Authorize the court, if it determines that there was
sufficient evidence for the public guardian's
certification, to order disbursements for the elder
(more)
SB 1742 (Hughes)
Page 2
person's needs out of the frozen estate, to appoint a
temporary conservator and to award reasonable attorney's
fees to the elder person's attorney. The court may also
order award up to $500 to the public guardian for
services rendered in connection with the filing of the
certification, if the filing was made in good faith.
BACKGROUND
With a few changes, this bill is another resurrection of SB
1868 (Hughes, 1998) and SB 163 (Hughes, 1999). SB 1868 was
vetoed by then-Governor Wilson as unnecessary, as Los
Angeles County had already been operating such a pilot
project for five years and that the 1998-99 Budget Act
appropriated $33.2 million to enhance county adult
protective services.
Governor Davis vetoed SB 163 on the same basis, stating
that the 1999-2000 Budget Act included a $34.9 million
augmentation for Adult Protective Services program "to
allow for enhanced investigation of reports of elder and
dependent abuse, including financial abuse, and services
for victims including emergency shelter, in-home protective
care, food and transportation. In addition, public
guardians have the existing legal authority to avail
themselves of the courts to temporarily freeze the assets
of potential victims." The message concluded that "[I]f
there is a demonstrated need for further legislation to
facilitate appropriate action at the county level, I will
entertain it."
CHANGES TO EXISTING LAW
Existing law provides various criminal and civil sanctions
for offenses involving the abuse of an elder or independent
adult.
Existing law provides for the public guardian of a county
to take possession or control of property that is subject
to loss, injury, waste or misappropriation, if the public
guardian determines the requirements for appointment of a
guardian or conservator of the estate are satisfied and the
public guardian intends to apply for the appointment.
SB 1742 (Hughes)
Page 3
[Probate Code Section 2900.] A written certification to
this effect by the public guardian is effective for five
days when issued, and may be recorded in the county in
which a person's real property is located. A financial
institution receiving the public guardian's written
certification is required to provide to the public guardian
information regarding property it holds in the name of the
proposed ward or conservatee and to surrender property that
is subject to waste, loss, or misappropriation. [Probate
Code Section 2901.]
This bill would authorize the public guardian of a
qualified county to take control of property belonging to
an elder person and to issue a certification of that fact
to a financial institution as provided under Probate Code
Section 2901, without first determining that the
requirements for appointment of a guardian or conservator
of the estate are satisfied and that the public guardian
intended to apply for the appointment as guardian or
conservator of the endangered estate. The bill would
limit this authority to the public guardian of a county
that has all of the following: a) a financial abuse
specialist team (FAST); b) sufficient law enforcement
trained in assessing competence; c) a law enforcement unit
dedicated to investigation of elder financial abuse and
enforcement of laws applicable to elder abuse. The public
guardian would base the decision to seize the property on a
declaration filed by an authorized peace officer.
This bill would authorize a peace officer, upon completion
of a check-off competence assessment form and signed
concurrence by a member of the FAST, to issue a declaration
to the public guardian stating that:
there is probable cause that the mentally impaired elder
is substantially unable to manage his or her financial
affairs or to resist fraud or undue influence; and,
there is significant danger that the elder person will
lose all or a portion of his or her property due to fraud
or misrepresentation or the elder's mental incapacity;
and,
there is probable cause to believe that a crime is being
committed against the elder person; and,
the crime being committed is connected to the mental
impairment of the elder; and,
the victim suffers from that inability as a result of
SB 1742 (Hughes)
Page 4
deficits in one or more of specified mental functions.
This bill would then authorize the public guardian to take
immediate possession and control of the elder's property
and to issue a recordable certificate to that effect. An
elder person who is the subject of a certification issued
by the public guardian may petition the court for an order
quashing the certification. The court would be required to
quash the certification if the court finds that there was
insufficient basis for the certification to have been
issued. If the certification is quashed, the bill would
authorize the public guardian to request the court for a
payment from the elder person's estate of up to $500 in
attorney's fees and costs incurred in taking this action in
good faith.
This bill would authorize the court hearing a petition to
quash the public guardian's certification to order, if
sufficient evidence is found to justify the certification,
disbursements from the elder person's estate for his or her
needs, the appointment of a temporary conservator, and an
award of reasonable attorney's fees to the elder person's
attorney from the estate.
Finally, this bill would entitle the public guardian who
has taken possession of property under this bill to
reasonable costs incurred in protecting the property,
including reasonable attorney's fees, if specified
conditions were met.
COMMENT
1. Stated need for legislation
In 1998, SB 1780 (Murray), SB 1715 (Calderon) and SB 2199
(Lockyer) were enacted to strengthen the laws against
abuse of the elderly and dependent adults. These bills
redefined financial abuse, broadened mandated reporting
requirements in cases where suspected abuse (including
financial abuse) is being perpetrated on the elderly and
dependent adults, and imposed penalties for crimes
SB 1742 (Hughes)
Page 5
involving financial abuse against the elderly. Though
the results of these three bills have yet to be measured
(two became effective January 1, 1999, and the other May
1, 1999), proponents of this bill state that they are not
enough, considering the problems encountered daily in the
field of financial abuse of the elderly.
The Commission on Aging and the Senior Legislature report
that cases of fiduciary abuse of the fast-growing elderly
population are multiplying, and that law enforcement
officers and financial institutions have expressed
frustration with the current system of protection given
to the elderly while their cases are being investigated.
According to the sponsor, many people assume that the
public guardian is always available to assist a victim or
potential victim during the course of an investigation.
This is not the case, however, as a public guardian is
not authorized by law to intercede in a situation unless
he or she intends to seek appointment as the conservator
or guardian of the victim. Moreover, the sponsor
contends that the public guardian is inadequately funded
and thus unable to intercede in many cases. This bill
would create pilot programs to reduce incidences of
financial abuse of the elderly and dependent adults by
utilizing resources available to peace officers, and by
expanding the public guardian's authority to issue a
five-day hold on vulnerable accounts and other property.
This bill, according to the sponsor, reflects one of the
recommendations made to the Commission on Aging during a
statewide summit to examine California's responsiveness
to the growing incidence of elder abuse. The California
Elder Abuse Summit for Empowerment (CEASE '97) was
attended by over 300 leaders of state and local social
services, law enforcement, health care providers, and
senior organizations.
2. Peace officer to issue declaration re: competence (or
incompetence)
Under this bill, a peace officer trained and certified by
Peace Officer's Standard Training (POST) in relevant
elder abuse laws may issue a declaration concerning an
elder person if all four conditions are met: the elder
SB 1742 (Hughes)
Page 6
person is unable to manage his or her financial affairs;
there is a significant danger that the elder will lose
part or all of his or her property; there is probable
cause to believe that a crime is being committed against
the elder person; and the crime is connected to the elder
person's inability to manage his or her financial
affairs.
This certification by the trained peace officer would be
done on a prescribed form contained in the bill. The
form essentially is a "check off" of various tests of
mental competence used in assessing potential
conservatees under Probate Code Section 810 et seq. The
peace officer would be trained in the administration of
these tests by a special POST course.
This bill would further require that this certification
be co-signed by another member of the financial abuse
specialist team (FAST) who is a mental health or medical
professional or a social worker dealing with adult
protective services, who would certify his or her
agreement with the certification.
3. Public guardian may or may not issue a certificate
under Probate Code 2901
This bill would authorize the peace officer to submit the
declaration regarding the suspected financial abuse to
the public guardian, who may then take immediate
possession of the elder person's property and further
decide whether or not to issue a recordable certification
that the public guardian is authorized to take possession
of the elder person's property in the county in which
said property is located.
Under current law, the public guardian would issue and
record such a certification only if he or she intended to
file a petition for a conservatorship or guardianship of
the elder or dependent adult.
This bill would allow the public guardian to record such
certification even if the public guardian has no
intention of filing for conservatorship, but the
recordation of said certification would freeze the elder
person's assets for a period of five days. During that
SB 1742 (Hughes)
Page 7
time, presumably, some action would be taken by a number
of other agencies, including the public guardian himself
or herself, to determine whether a conservatorship is in
order, family could be contacted, or other caretakers of
the elder person could take action.
4. Elder person's right to quash the certificate
This bill would permit an elder person to quash the
certification by filing a petition ex parte. Filing fees
could be deferred or waived for this application. The
court would then determine if there was sufficient
evidence to justify the certification, and, if so, the
court could order disbursements from the elder person's
estate for payment for his or her needs, and appoint a
temporary conservator for the elder person if there are
sufficient grounds to meet the requirements of Probate
Code 2250.
If there were not sufficient grounds for the public
guardian to have issued the certification, this bill
would require the court to quash the certification.
Under this bill, an elder person's estate could be
charged up to $500 in attorney's fees for services
rendered by a public guardian who takes custody of the
elder person's estate in good faith based upon the peace
officer's declaration.
5. Public guardian's fees
This bill would authorize the public guardian to collect
reasonable costs, including attorney's fees, from the
estate of the elder person for services rendered, even if
the public guardian does not petition the court to be
appointed as conservator of the elder person if one of
the following occurs after the public guardian takes
charge of the elder person's estate:
A) The public guardian or another person is appointed as
temporary or
general conservator of the estate or;
B) An attorney-in-fact under a durable power of
attorney, or a trustee (under
a living trust?) takes steps or is notified of the
SB 1742 (Hughes)
Page 8
need to take steps to protect
the rights of the elder person or;
C) An action against the financial abuser is brought by
the elder person or a successor in
interest of the elder person arising from a harm that
the public guardian's action was intended to minimize
or prevent.
The Los Angeles County Counsel, representing the public
guardian, states that in cases where the public guardian
would take action under this bill and not petition for
conservatorship, the costs incurred by the county would
be somewhere around $500. This fee would be charged to
the elder person or the conservator, trustee, or
attorney-in-fact, who may or may not pay the fee. If it
is not paid, the public guardian can send it to
collections or file a small claims action.
Where the action taken by the public guardian requires
much more work, and higher attorney's fees are incurred,
proponents state that the public guardian should be able
to hire private attorneys to do the work and pay for
those services. The attorney's fees and costs would then
be approved by the court as reasonable.
The reason for this, proponents state, is that unless the
public guardian can be paid reasonable attorney's fees
(to pay private attorneys) that approximate going rates
for private attorneys, only those estates large enough to
generate those fees will get the attention of the FAST
team. Probate judges are not inclined to pay the public
guardian the private sector value of their work,
proponents say, unless the estate is large.
6. Financial abuse specialist team (FAST) requirements;
coordination with existing adult services protective
agency programs
Under this bill, there would be at least 10 members of a
financial abuse specialist team (FAST), at least one from
each of the following categories:
psychiatrists, psychologists, marriage, family and
child counselors, clinical
social workers, or other licensed mental health
SB 1742 (Hughes)
Page 9
professional;
public guardian;
police or other law enforcement agent;
district attorney's office;
medical personnel with training in health services;
social workers with experience in prevention of
elder abuse;
member of the county adult protective services
program;
member of the county long-term care ombudsman
program;
representative of a financial institution;
attorney proficient in the practice of elder abuse.
Further, at least one member of FAST shall be:
trained in the prevention of financial abuse of elder
persons;
trained in the identification of financial abuse of
elder persons;
trained in the treatment of financial abuse of
elder persons;
trained in all of the above.
The FAST would be required to contain members who, in the
aggregate, are qualified to provide a broad range of
services related to the financial abuse of the elder
persons.
Under the provisions of the newly enacted laws relating
to elderly abuse, each county is to establish a
multi-disciplinary team that would respond within 10 days
to reported incidents of elderly abuse, including
financial abuse. These multi-disciplinary teams are to
be composed of 1) psychiatrists, or other trained
counseling personnel; 2) police officers; 3) medical
personnel with training in health services; 4) social
workers with experience or training in prevention of
abuse of the elderly; and 5) public guardians. This
bill, however, would mandate 10 different classes of
persons to be on the FAST.
Given that the same classes of persons would be mandated,
under this bill, to be part of the FAST, could not the
already mandated multi-disciplinary team function as the
FAST for the program contemplated by this bill? This
SB 1742 (Hughes)
Page 10
would simplify the constitution of the FAST, and avoid
duplication.
This bill would require that the activities covered by
the bill be coordinated with existing mandated programs
affecting financial abuse of the mentally impaired elders
that are administered by the county adult protective
services agency.
7. Governor's objections to SB 163 resolved
Proponents argue that in its present form, the Governor's
objections to the passage of SB 163 (Hughes, 1999) are
overcome. In contrast to what would have been required
of public guardians under SB 163, the public guardian
under SB 1742 would not be required to act if a peace
officer were to submit a declaration as defined in this
bill. This is so, even under current law, but at least,
proponents state, more incidents will be brought to the
public guardian's attention because of the involvement of
peace officers and the expanded version of the FAST, and
the expedited handling of potential financial abuse of
the elderly will be promoted.
8. Definition of "financial abuse"
This bill would make a clarifying amendment to the
current Welfare and Institutions Code definition of
"financial abuse" that affects transfers of property to
or from third parties, where the third party commits
acts of bad faith in regard to such transfers.
AB 2107 (Scott) would also redefine "financial abuse"
under the Welfare and Institutions Code. The
definitions should be reconciled if both bills pass.
Support: Board of Supervisors County of Santa Clara
Opposition: None Known
HISTORY
Source: State of California Commission on Aging; Estate
Planning, Trust and
SB 1742 (Hughes)
Page 11
Probate Law Section of the State Bar of
California
Related Pending Legislation: AB 2107 (Scott), see Comment
8.
Prior Legislation: SB 1868 (Hughes, 1998), vetoed; SB 163
(Hughes, 1999) vetoed.
**************