Elder abuse cases often highlight the reality that the same frailties and vulnerabilities that make older clients easy victims, also make them imperfect witnesses and poor advocates for themselves. The state of Maine, however, has taken a unique approach in protecting its elderly from financial exploitation.
In 1987 a group of lawyers advocating for financially exploited elders undertook a legislative initiative, at a time where there was very little awareness of the problem. The result was The Improvident Transfer Act (33 M.R.S.A. 1021 et seq.).
At this time, Maine’s Legal Services for the Elderly (LSE) was seeing a sharp increase in the number of older people who had divested themselves from their assets, where most often the recipients of these assets were family members or others that the elderly person had a close and trusting relationship with.
In many cases, older people are generous with their family and make financial gifts willingly – free from inappropriate influence – for such things as assisting with college tuition, a down payment on a house, transferring real estate, and compensation for caregiving expenses.
However, the LSE was seeing – and still continues to see – clients in distress after giving up assets before they were ready, which left them in a precarious financial circumstance including being left destitute or even evicted.
The idea behind the proposed legislation was to shift the burden of proof from the transferor to the transferee by creating a presumption of undue influence under a limited set of circumstances:
- Transferor was “elderly” (age 60 or older);
2. Transferor was “dependent” on others;
3. Transferor was in a “confidential or fiduciary relationship” with the transferee;
4. Transferor did not have “independent counsel”:
5. Transfer was made for less than full consideration; and
6. Transfer of assets was “major” (19% or more of the elder’s estate)
After some initial opposition and amendments, most elder advocates have become strong supporters. In fact, attorneys appreciate that from a client-relationship standpoint, this legislation has allowed them to avoid the awkward position of being asked to represent both parties in these transactions.
If you have questions about this or any other aspect of real estate transactions, we are here to help! Send your questions to matthew@cumberlandtitle.com and we are happy to answer them and guide you in the right direction. Understanding the process is important and we strive to educate and simplify the process regardless of what side of the transaction you’re on.
