Mediating Elder Financial Abuse

A few years ago, my long-time friend, Oakland-based attorney Frederick Hertz made the switch from litigating conflicts over money and property involving family members and partners to mediating them. When he told me that he’d teamed up with another mediator with 20 year’s experience as a family therapist to explore the legal and psychological interface of “family business” gone wrong, I was intrigued. So I sat in on a talk that he and Judy Barber gave at the Mediation Society in San Francisco earlier this year.

Their premise is that family conflicts involving money aren’t just about money. They’re also about longstanding sibling rivalries, parents’ playing off their kids against each other, and other assorted family dynamics and dysfunction. Which means that standard measures of success, like the size of settlements, are rarely adequate and even “winners” are likely to emerge feeling disappointed and wounded. Successful resolution, they contend, requires helping families move past their histories to engage in rational decision-making. That’s not to say that mediators should do family therapy, only that failure to address these issues altogether makes successful resolutions unlikely.

It seemed to me that their approach held tremendous promise for elder financial abuse cases involving family members, partners, and others with whom elders have relationships. Heidi, Li, director of the SF Consortium For Elder Abuse Prevention, agreed and offered to host a presentation to explore the use of mediation in elder financial abuse cases. It took place on December 4.

Elder abuse cases comprise a relatively small proportion of those that Fred and Judy mediate, but the hypothetical they prepared for the event did and had the group nodding in recognition. It involved an 80-year old widow with $2 million in equity and assets who’d borrowed against her home to help out a downwardly mobile son. When Mom started having trouble making the payments and called another son in a panic at the prospect of losing her home, he alerted two other siblings who were furious and wanted to sue their brother for elder abuse.

The first step in analyzing cases like this, according to Fred, is to assess the “real estate” of the transaction--the legal terrain, which includes the terms of the loan and the son’s ability to pay Mom back. But then, mediators need to look at the parties’ differences with respect to:

Their relationships to the property and assets in question. A property that’s seen as an investment to one family member may be “home” to another, with all the emotional attachment that that engenders.

The feelings of the parties (“I deserve this because I was there for Mom and you weren’t” versus “You’re too dependent on Mom; get a life!”)

Decision-making styles, which oftentimes are the result or cause of long-simmering resentments and conflicts.

Judy and Fred acknowledge that elder abuse cases may raise special considerations for mediators. These include uncertainties about capacity and undue influence, the limits of mediation with extreme power imbalances, and the effects of mandatory reporting. The latter factor was demonstrated at the Mediation Society session I attended where someone in the audience described a case he’d mediated in which the parties agreed to have a financial institution suspend activity on an account to prevent end runs while the mediation was in progress. An employee, sensing a problem, made an elder abuse report to the police, thereby potentially derailing the mediation. Still, the session served to convince me and others I spoke to afterwards that the approach clearly warrants further exploration. Seems to me that learning to recognize the factors that give rise to financial conflicts could also potentially lead to more rational estate planning and circumvent problems from arising later on.

The Consortium event ended with a presentation by Mary Joy Quinn, director of the San Francisco Superior Court’s Probate Department, describing a pro bono mediation program that she spearheaded, in which judges and commissioners refer cases to specially trained mediators as an alternative to conservatorships.

I’m delighted to add that I’ll be working with Mary Joy and Eileen Goldman again next year on a new project with the court funded by the Borchard Foundation. Working with California’s Administrative Offices of the Court, we’ll be drawing from research, case law, and practice experience to develop working definitions of undue influence that can be used in assessment and policy development.

For more on Fred and Judy, visit their Web sites at www.FrederickHertz.com and www.familymoneyconsultants.com. To learn more about how mediation and other forms of “restorative justice” are being used to prevent elder abuse, click here.