On July 11, 2012

Choosing a professional to help manage your assets isn’t a decision that should be made lightly. Whether you’re looking for a trustee, a conservator or a power of attorney, you want to make sure that the person who makes financial decisions on your behalf is trustworthy. As we get much older, this task can become more difficult; there are simply too many people willing to take advantage of elderly and vulnerable people.

An example is the case of a man living in Aspen, Colorado, who pleaded guilty recently to charges of wire fraud and filing a false tax return. The 43-year-old man, a licensed stockbroker and investment adviser, admitted to stealing money from an elderly client while acting as the trustee of his revocable living trust, as well as his power of attorney.

From 2003 through 2007, the man misappropriated several hundred thousand dollars from the man’s bank and investment accounts. As part of that misappropriation, he’s accused of transferring more than $654,000 from his client’s Charles Schwab account to his bank account before taking the money and using it for his own benefit. He also wrote nearly $600,000 in checks to himself from the man’s accounts, calling it payment for services to his client.

The elderly man died in 2006, after which his trustee and power of attorney made out more than $243,000 in additional checks from the client’s estate to himself in the form of “estate services,” though he never provided any accounting to the man’s family members. He also never reported the income on his income tax returns.

The man committed the crimes while he was living in Washington state. After that state’s Department of Financial Institutions revoked his registration as a securities dealer on the grounds of unethical conduct in 2009, he relocated to Colorado.

Unfortunately, this type of conduct is all too common, and elderly clients are particularly vulnerable to fraud. If you’d rather not worry about whether your trustee or estate planner is operating in your best interests, it pays to seek out a professional with a long and trusted history. A consultation with an established law firm that focuses on estate planning, wills and trusts may be a good first step for you and your family.

Source: Bonney Lake & Sumner Courier-Herald, “Stockbroker pleads guilty to wire fraud/U.S. District Court,” June 24, 2012

Categories: Trustees, Executors & Fiduciaries

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