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.

Meditations on Mediation

My old friend Fred Hertz is arguably the nation’s leading expert on “gay divorce.” A lawyer, he represents partners in break-ups and has written a book on the subject, been interviewed on NPR, appeared on Oprah, and is frequently quoted in the press.

So, I was more than a little surprised when he told me recently that he doesn’t want to litigate cases anymore but instead, use his skills to help couples stay out of court. After spending years handling mostly property ownership disputes, he’s concluded that conflicts involving people in personal relationships are better resolved through mediation than the adversarial process. Even in “successful” cases, where his clients prevail, they often come out feeling bitter and disappointed.

I’ve been interested in the use of mediation in elder abuse cases for years despite the bad rap it’s had in our field. The negative bias is a spillover from domestic violence theory, which holds that power differences between women, the victims in most cases, and their male batterers make mediation inherently unfair and dangerous. That’s because of institutionalized inequalities and barriers to justice, resources and protection. But most elder abuse cases don’t involve societal injustices. When you take that factor out of the equation, what's left are the inequalities and unfair advantages that exist between individuals, which aren’t nearly as insurmountable.

Fred’s cases often involve extreme imbalances of power with respect to personality, money or class. “When I ask clients why they contributed to the purchase of homes but never went on title or why they contributed more than their share, they often tell me that’s how their partners said it was going to be and they were too intimidated to refuse." Sounds to me like a lot of the elder abuse cases we see.

According to him, mediation is often the best way to resolve these imbalances, especially for the weaker person who has the most to gain. As intimidating as it can be, it’s much safer and cheaper than litigation. He cautions, however, that whenever serious power imbalances exist, mediation has to be structured in a way that protects weaker parties, which usually means that they have advocates present, or at a minimum, mediators who are willing to take on this challenge. “Traditionally, mediation hasn’t been used in cases that involve any sort of intimidation or fear on one party's part, so mediators need special training and different protocols.”

Reticence toward mediation extends beyond the elder abuse network into the broader aging services community. That's according to the Center for Social Gerontology of Ann Arbor, Michigan, which has been pioneering the use of mediation as an alternative to guardianship since the early 1990s. In 2001, they released a four-state study, which found that mediation was effective in helping disputing parties in guardianship cases reach agreements in three-quarters of cases. They’ve also explored the use of mediation in elder/family caregiver conflicts. Despite the promise it holds, mediation has been slow to catch on, which prompted the Center to form the National Elder Mediation Network earlier this year.

Just as we can’t apply one-size-fit-all interventions to the widely divergent cases we see, neither can we afford to reject interventions wholesale. Instead, we should be exploring when mediation is appropriate and when it’s not. It would be a shame to let misplaced biases get in the way.