Criminal Prosecution of a Guardian, or Agent under a POA?

     I recently faced an Orphan’s Court delay due to a most unusual case. As some readers already know, the court usually disposes cases that take the shortest amount of time first, then reschedules other cases, and the contested matters are heard last.This day in court, it was hard to ignore a slightly annoyed judge confronting a group of several litigants. It became apparent the case at the bar of the court involved a local continuing care community, demanding an accounting from the children of a resident. 

     As the story unfolded, it seems that years ago, as is customarily done, the parents in the continuing care community listed all their assets in an application for admission. The residents have now run out of money. The owners of the continuing care community, using simple math, realized that $400,000. disappeared from the time of the initial application.The parents’ health had deteriorated; it was not clear whether the children were acting under a power of attorney, or as court appointed guardians. One thing was clear, the continuing care community was asking the court to issue them subpoenas to financial institutions, permitting them to find the missing money. They were asking for a court order compelling the children to provide an accounting, and subpoenas for the children’s financial records.

     The children were suddenly on the hook for the $400,000. missing assets. As though that was not bad enough, someone from the Attorney General’s Elder Abuse Unit and another from the county District Attorney’s Office was monitoring the case just in case they would prosecute the children for elder abuse, and theft of their parents’ money.

     The children felt the entire matter was a family affair, and the continuing care facility had no business prying into their affairs. The court felt otherwise and ordered an accounting, and re-listed the case for the issuing of subpoenas for financial records. 

      The same judge presiding over the case happened to be teaching an Elder Law continuing education class the following week. He alluded to the case, without mentioning names. He said that he does not mind when a family engages in asset protection planning, but the trouble arises when the children decide to do their own planning, without professional advice, and transfer their parents’ assets to their name. The children might find themselves under investigation for elder abuse, and face the chance of being charged with theft, in addition to any filial support obligation. The relevant Pennsylvania law is Title 18, Section § 3927.  Theft by failure to make required disposition of funds received. That section of the theft code deals with misuse of funds entrusted under a fiduciary duty. With few exceptions, the grading of the offense depends upon the value of the property misappropriated or stolen. A way to avoid any of these hazards is to consult with an experienced estate planning or elder law attorney, or financial advisor before transferring your parents' assets. The cost of a consultation is far less than the cost of defending a criminal prosecution.

Stay well until the next post,

Bob Gasparro