ATTORNEY NEWSLETTER

Life Insurance and Financial Elder Abuse

For years seniors have included life insurance as a part of their estate plan. Sometimes the policies are held outright and sometimes in trust for tax planning reasons. As policy owners age, insurance brokers encourage cashing in older policies and replacing them with newer contracts. Be extremely wary of this sales pitch; agents may try to churn your policies just for commissions. We at Evans Law Firm have years of experience with life insurance matters and cases of financial elder abuse, life insurance and annuity churning or twisting, botched 1035 exchanges and similar problems and schemes. We advise you to resist salesmen meddling with your existing policies. In particular, if your agent suggests a 1035 exchange, that should be a red flag for you to get a second opinion from a professional/outside source. If you or someone you know is the victim of financial elder abuse or insurance agent misconduct, call Evans Law Firm today at 415-441-8669 and we can help. We only represent those in the state of California.

How Agents Churn Policies

A recent California case illustrates how sound out advice of caution has been. In this most recent case, a team of agents manipulated an elderly couple into replacing (known as “churning” or “twisting”) their longstanding life insurance coverage with a supposedly better set of new contracts. The new policies in fact were vastly inferior to the existing ones and hugely more expensive. The results were disastrous and destroyed a sound estate plan in place for twenty-plus years. Sadly, both seniors suffered from cognitive impairment and made easy prey. The couple’s existing policies were held in a trust of which their daughter was a co-trustee but even that precaution didn’t dissuade the scheming agents. They simply ignored the trust, dealt exclusively with the aged couple, and concealed their plans from the daughter. Later, when the family discovered the fraud and sued for financial elder abuse the agents claimed the trust was not protected by California’s elder abuse statute.

Protection for a Family Trust

The appellate court fortunately rejected that argument. Even though the trust was the legal owner of the old and new policies, the court determined that the elderly couple themselves were the real victims. California’s Elder Abuse Act thus applied. The court found that the seniors were personally harmed by having to pump more money (up to $1 million) into the trust to cover the enormous (and undisclosed!) cost of the new policies. Ultimately, it’s anyone’s guess what the family may recover from the wrongdoers. But the case deserves special attention and shows that seniors must proceed with extreme caution whenever an agent or broker suggests replacing (read “churning” or “twisting’) existing life insurance or annuity arrangements by any means including a 1035 exchange. We at Evans Law Firm for years have been advising just such extreme caution, to the point of clients resisting such transactions completely. If you or a loved one has been the victim of loss by policy churning or any other form of financial elder abuse here in California, please call us today at (415)441-8669 and we can help.

Contact Us

If you or a loved one been the victim of financial elder abuse in San Francisco County, or in any California county, contact the Evans Law Firm financial elder abuse attorneys at (415) 441-8669, or by email at info@evanslaw.com. Our attorneys have experience with all types of financial elder abuse, investment and securities fraud, insurance and annuity fraud by churning, twisting, 1035 exchange or otherwise. We can help guide your case through a jury trial, through a FINRA arbitration, or toward an equitable settlement. We handle cases involving physical and financial elder abuse, qui tam and whistleblower law, nursing home abuse, whole life insurance and universal life insurance, and indexed, variable, and fixed annuities.