BILL ANALYSIS
SB 1742
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Date of Hearing: June 13, 2000
ASSEMBLY COMMITTEE ON JUDICIARY
Sheila James Kuehl, Chair
SB 1742 (Hughes) - As Amended: April 12, 2000
SUBJECT : PREVENTION OF FINANCIAL ABUSE OF MENTALLY IMPAIRED
ELDERS
KEY ISSUE : SHOULD PUBLIC GUARDIANS BE GIVEN NEW AUTHORITY TO
REDUCE FINANCIAL ABUSE PERPETRATED AGAINST MENTALLY IMPAIRED
ELDERS?
SUMMARY : Provides new authority to public guardians to reduce
financial abuse perpetrated against mentally impaired elders.
Specifically, this bill :
1)Authorizes the public guardian of a qualified county to take
immediate control of property belonging to an elder person, in
accordance with the following procedures:
a) In order to qualify, each county must have: (i) a
"financial abuse specialist team" (FAST), comprised of
specified members trained in the area of financial abuse of
elders; (ii) sufficient law enforcement personnel who have
experience conducting competency assessments; and (iii) a
law enforcement unit devoted to investigating and
preventing elder financial abuse.
b) A specially trained peace officer would be authorized to
issue a specified declaration to a public guardian
concerning an elder person if certain conditions are met,
including a determination by the officer that there exists
a significant danger that the elder person will lose all or
a portion of his or her property as a result of fraud or
misrepresentation or the mental incapacity of the elder
person.
c) In response to a peace officer's declaration, the public
guardian would be authorized, but not required, to issue a
written certification taking immediate control of an elder
person's property, without the need to pursue a
conservatorship for the elder's estate.
2)Provides that a public guardian acting in good faith is not
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liable when taking control of property pursuant to this bill.
3)Provides that an elder person who is the subject of a
certification by the public guardian may challenge it in
court.
4)Provides that if the court determines that there is sufficient
evidence to support the certification, the court may: (a)
order disbursements from the alleged victim's assets, as are
reasonably needed to address the alleged victim's needs; (b)
appoint a temporary conservator of the alleged victim's
estate; (c) deny the petition; or, (d) award reasonable
attorney's fees to respondent's attorney from the victim's
estate.
5)Provides that a public guardian who has taken of the property
of an elder person under the provisions of this bill is
entitled to reasonable fees and costs, including attorney's
fees, if certain conditions are met.
6)Requires the public guardian in such cases to exercise
reasonable care to see that the reasonable living expenses and
legitimate debts of the elder person are addressed.
7)Makes clarifying amendments to the current definition of
"financial abuse" in the Elder Abuse and Dependent Adult Civil
Protection Act.
EXISTING LAW :
1)Authorizes the public guardian to take possession or control
of property of a person if the public guardian determines
that: (a) the requirements for appointment of a guardian or
conservator of the estate are satisfied; and, (b) the public
guardian intends to apply for appointment. (Probate Code
section 2900(a). All further statutory references are to this
Code unless otherwise noted.)
2)Provides that if a public guardian is authorized to take
possession or control of property, the public guardian may
issue and record a written certification of that fact and the
certification will be effective for five days. (Section
2901(a).)
3)Provides that a financial institution shall, without the
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necessity of inquiring into the truth of the written
certification and without court order or letters being issued,
surrender to the public guardian property of the proposed ward
or conservatee that is subject to loss, injury, waste, or
misappropriation. (Section 2901(c).)
4)Provides various criminal and civil sanctions for offenses
involving the abuse of an elder or dependent adult. (Penal
Code section 368; Welfare and Institutions Code section 15600
et seq .)
FISCAL EFFECT : This bill will not be referred to the
Appropriations Committee.
COMMENTS : According to the author, this bill will enhance the
authority of public guardians to reduce financial abuse
perpetrated against mentally impaired elders by allowing them to
take immediate control of the victim's property without the need
to pursue a conservatorship. In support of the bill, the author
states that "there are several tools available to government
entities to address instances of financial abuse, but most
require several days (at a minimum) to be implemented. Under
current law, the assets of a potential victim can be temporarily
frozen by the Public Guardian under very narrowly defined
circumstances (i.e., the Public Guardian is prohibited from
freezing assets unless he or she personally intends to be
appointed as conservator of the victim's estate). In many
cases, however, other possible remedies exist which are more
appropriate. SB 1742 would allow the Public Guardian to freeze
assets of a vulnerable elder while pursuing one of these
alternate remedies. This bill contains several provisions to
ensure that proper care is exercised whenever an elder's assets
are frozen."
Prior Attempts to Enact Similar Legislation . This bill is
substantially similar to the author's SB 1868 of 1998 and SB 163
of 1999, both of which were passed by the Legislature but vetoed
by the governor. The principal difference between those bills
and the present measure is that the earlier bills were set up as
pilot projects. SB 1868, which would have created a pilot
project in Los Angeles County, and up to three other counties if
sufficient funds were appropriated, was vetoed by then-Governor
Wilson. In his veto message, the governor stated: "This bill
is unnecessary. Los Angeles County has already been operating
such a pilot project for the past five years. In addition, the
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1998-99 Budget Act appropriated $33.2 million to enhance county
adult protective services, and I have signed SB 2199 (Lockyer)
which expands the dependent adult reporting law to cover
financial abuse."
SB 163 would have established a three county pilot program to be
administered by the Department of Social Services. Governor
Davis vetoed SB 163 on a similar basis, stating: "The 1999-2000
Budget Act included a $34.9 million augmentation for the 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. If there is a demonstrated need for further
legislation to facilitate appropriate action at the county
level, I will entertain it."
Overview of Problem . On November 18, 1997, the Assembly
Committee on Public Safety held an Interim Hearing, "Invisible
Crimes: What Can the Legislature Do to Prevent the Physical and
Financial Abuse of the Elderly?" At the hearing, various
professionals in the areas of elder crime and care testified
that elders are targets of financial abuse, and penalties and
protections need to be expanded. The findings from the hearing
included:
Data : There are close to 3.6 million senior citizens in
California, with 1.2 million of those seniors residing in Los
Angeles County. Researchers estimate that 4% to 5% of those
seniors suffer one or more episodes of abuse (including
physical abuse, neglect, isolation, sexual and financial
abuse) each year, but only 1 out of 15 abuse cases are
reported.
Net Worth : Persons age 50 or older control 70% of the net
worth of United States households, according to Ken Dychtwald,
author of "Age Wave." For many elders, these assets have been
accumulated over a lifetime and real property has appreciated.
Study of Financial Elder Abuse : A Virginia study of elder
financial abuse found that 70% of victims suffered from mental
disabilities; 24% suffered from severe mental disabilities;
and 60% suffered from some form of physical incapacity.
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Vulnerable nature of elders : The San Francisco District
Attorney's Office reported that the elderly are often at an
increased risk for criminal victimization because as a group
they are typically trusting and trustworthy, often live alone
and are isolated and lonely, may be unsophisticated in money
matters, unaware of the true value of assets acquired years
earlier, are easily identifiable, and rarely report their
victimization once they recognize they have been victims.
Revised Definition of "Financial Abuse" . In addition to the
provisions enhancing the authority of public guardians to take
immediate control of the assets of certain mentally impaired
elders, as described above, this bill would also make a
clarifying change to the current definition of "financial abuse"
in Welfare and Institutions Code section 15610.30, which is
contained in the Elder Abuse and Dependent Adult Civil
Protection Act (EADACPA). The proposed changes clarify the
provisions affecting transfers of property to or from third
parties, where the third party commits acts of bad faith in
regard to such transfers. (See Welfare and Institutions Code
section 15610.30(a)(2)(C).)
AB 2107 (Scott), which strengthens the law with respect to
selling annuities and other insurance products to elders, would
also make various clarifying changes to the "financial abuse"
definition under the EADACPA. The definitions will need to be
reconciled should both bills pass.
ARGUMENTS IN SUPPORT : Proponents state that cases of fiduciary
abuse of the fast-growing elderly population are multiplying,
and 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 proponents, 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, proponents contend that the public guardian is
inadequately funded and is, thus, unable to intercede in many
cases.
Proponents also state that this bill reflects one of the
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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.
Pending Related Legislation . AB 2107 (Scott), described above,
is pending in the Senate.
AB 2253 (Jackson), which would authorize staff of financial
institutions to report suspected incidents of financial abuse of
elders, is pending in the Senate Judiciary Committee.
Prior Pertinent Legislation . SB 163 (Hughes) of 1999 and SB
1868 (Hughes) of 1998, as described above, were both vetoed.
In 1998, three bills were enacted to strengthen the laws against
abuse of the elderly and dependent adults: AB 1780 (Murray -
Ch. 980), SB 1715 (Calderon - Ch. 935), and SB 2199 (Lockyer -
Ch. 946). These bills redefined financial abuse, broadened
mandated reporting requirements in cases where suspected abuse
(including financial abuse) is being perpetrated on elders and
dependent adults, and imposed penalties for crimes involving
financial abuse against seniors. Though the results of these
three bills have yet to be measured, proponents of this bill
state that they are insufficient, given the magnitude of the
problems encountered in the field of financial abuse of the
elderly.
REGISTERED SUPPORT / OPPOSITION :
Support
Estate Planning, Trust and Probate Law Section, State Bar of
California (co-sponsor)
State of California Commission on Aging (co-sponsor)
Congress of California Seniors
Sacramento County
San Bernardino County Sheriff's Department
Santa Clara County Board of Supervisors
Senior Legislature
Opposition
SB 1742
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None on file
Analysis Prepared by : Daniel Pone / JUD. / (916) 319-2334