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The Case of the Aging Parents Who Were Giving Away Their Money

November 2008

By Lee Aronson

Answer: Unfortunately, your situation is a common one. Your best bet is to try talking to your parents. Tips I’ve heard for having such a conversation include: get all of the siblings together; make clear that you are not trying to take control of your parent’s lives; and ask how you and your siblings can help to make things easier. If taking to your parents isn’t going to work, there are some things you can do, but none of them will be easy or pleasant.  

In Louisiana, every adult is presumed to be competent and can do what they want with their money. Even if you could prove that your parents did not understand what they were doing when they were giving money to the relative, you would still be out of luck. That’s because Louisiana law only allows the person making the donation to challenge it due to his or her lack of understanding. In other words, adult children have no legal right to challenge a donation make by their parents based on their parents’ lack of capacity. I read one case where Mom gave her interest in the family farm to only one of her kids. The other children thought that Mom was incompetent and did not understand what she was doing when she made this donation and sued to have the donation revoked. The court threw the case out, stating the general rule that only Mom would have authority to sue to have the donation revoked.

So if your parents aren’t willing to talk, perhaps you should try having a conversation with the distant relative. You might want to explain to the relative that financial exploitation of an aged person is a crime in Louisiana. Financial exploitation includes “the intentional diminution or use of the property or assets of the aged person without the express voluntary consent of [the aged individual.]” You could mention the only case that I know of that involves this law: a grandson cashed two checks on the account of his grandmother who was in a nursing home at the time. One check was for $65 and the other was for $50. Criminal charges were brought against the grandson, he pled guilty and was sentenced to five years imprisonment and fined $1,500.

Or perhaps you should report the distant relative to Elderly Protective Services. Elderly Protective Services is a special State agency out of The Office of the Governor and it’s their job to receive and investigate reports of suspected elder abuse, neglect, and financial exploitation. And the agency will keep your identity confidential: your parents and the distant relative will not be able to find out that you were the one making the report.

An option that probably won’t work is Power of Attorney. That’s because not only must your parents be willing and able to give Power of Attorney, but also because the granting of Power of Attorney doesn’t mean that they are signing their lives away. If your parents give you financial Power of Attorney, you have authority to act on their behalf in financial matters but your parents retain all of their rights to do whatever they want with their finances. And your parents can change their mind and revoke the Power of Attorney at any time.

Another unpleasant option would be to file a lawsuit to have your parents declared incompetent and to have a guardian appointed to take over their finances. In Louisiana, such a suit is called an interdiction and is a big deal. A sheriff will have to actually have to go out to your parents’ house and serve them with court papers. Your parents will then have 15 days to answer the lawsuit and if they don’t, the Judge will appoint an attorney to represent them. The Judge may also order your parents to undergo a medical evaluation and have the doctor’s report entered into evidence. If the Judge finds that your parents are “unable consistently to make reasoned decision regarding the care of their property or to communicate those decision and their interests cannot be protected by less restrictive means,” then the Judge will declare them incompetent and will appoint a guardian. Usually, a family member is appointed as the guardian and only the guardian will have authority to act on your parent’s behalf. Your parents will lose all authority over their finances and will no longer be able to make any gifts or take any act at all pertaining to their property. That’s a severe remedy: one Louisiana court called a Judgment of Interdiction to be “a pronouncement of civil death without the dubious advantage of…a tombstone.”

Lee Aronson is an attorney with Legal Services of North Louisiana. His practice areas include consumer protection law, housing law and health care law.