As elders age, more and more of their relationships become ones of trust. Eventually, they all are. It is one thing when this dependence stays within the family – quite another when the enterprises we must rely on to guard our health or wealth are strangers. The law recognizes this. The standards of the market place – where every man and woman must look out for themselves – should NOT govern those who make their money by inviting elders to trust them. For this reason there is a special law of trust that holds those who serve elders to a higher standard of conduct. The law says that these businesses and professionals owe a special duty of trust to elders, usually called “Fiduciary Duty.”
The Law of Trust
Generally, the law allows people to put their own self-interest first. There is an exception, however, when an enterprise depends on the trust of others to run its business. Under the law those enterprises owe a fiduciary duty to put the interests of their clients and customers before their own. So it is every man and woman for themselves except when they vow otherwise. Fiduciaries vow otherwise. So what are their special duties?
What Does it Mean to Have a Duty of Trust to an Elder?
A fiduciary may not profit from his or her position of trust at the expense of the elder. Fiduciaries must fully disclose to the elder any conflict of interest they may have in their dealings with them. If the elder gives the fiduciary money, the fiduciary must account for what he or she does with it. Before acting, a fiduciary must tell the elder what he or she is doing on the elder’s behalf. If fiduciaries do not follow these duties, they are liable for any and all harm the elder suffers as a result.
WHO Has This Duty of Trust?
For starters, most professionals who serve the elderly have this duty – lawyers, financial advisors and investment advisors lead the list. Those who act as trustees or who have been given special powers by elders, like those with the powers of attorney or health (or other agency powers) are also held strictly accountable for their actions as fiduciaries. Recent California case law extends the duty of fiduciary to doctors and health care companies (McCall v. PacifiCare of California, Inc.). Most importantly, businesses and corporations – such as hospitals, nursing homes and other care providers can and do have fiduciary duties to elders when they care for them.
Who Can Elders Trust with Their Money?
This may come as a surprise – but practically any person or corporation who does business in California with people over 65 now has a duty to take special care they do not harm the elder when they do business with them. Several years ago California amended its elder abuse laws to say that any person who wrongfully takes real or personal property from a person over 65 must pay it back. What’s wrongful? The statutes say that if a person (or business) takes such property when he or she knows or should have known that the taking would likely harm an elder, the law will presume it is wrongful.
The Bottom Line:
As the numbers of elders grow, more and more enterprises are being formed to serve their needs. Many of them are now publicly traded corporations or professional firms. Nearly all depend on the trust elders and their families place in order to do business. The general law of the marketplace – “Buyer Beware” – should not apply to their actions. Instead, these enterprises can and are held to a higher standard. Those businesses which depend on the trust of elders must respect it by placing the elders’ interests before their own. If they violate this law of trust, they can and should be held accountable.