The Maryland SAFE Act (Statute Against Financial Exploitation)
In October of 2021, a Maryland law was put into place to address the financial exploitation of susceptible adults and older adults. The statute has “teeth”.
An “older adult” is defined as someone at least 68 years old. The definition of a “susceptible adult” is more complex. “Susceptible adult” means an adult who is unable to perform, without prompting or assistance, one or more activities of daily living, is unable to protect the adult's rights, or has diminished executive functioning, due to: (1) Advanced age; (2) Mental, emotional, sensory, or physical disability or disease; (3) Impaired mobility; (4) Habitual drunkenness; (5) Addiction to drugs; or (6) Hospitalization.
A susceptible adult or older adult who has been subjected to financial exploitation in the State or, in accordance with § 13-605 of this subtitle, a person acting on the susceptible adult's or older adult's behalf may bring a cause of action against a person who has committed financial exploitation against the susceptible adult or older adult to recover damages and obtain other appropriate relief as set forth under this subtitle.
The definition of “financial exploitation is complex and for thos interested, I include it below.
This statue has “teeth”. In addition to compensatory damages, the statute authorizes a court to award up to 3 times the compensatory damages plus prejudgment interest and reasonable attorney fees and expenses. But, one must be careful because the statute also provides that if it appears to the satisfaction of the court, at any time, that an action is brought in bad faith or is of a frivolous nature, the court may order the offending party to pay to the other party reasonable attorney's fees and expenses.
In addition to the affected adult, a lawsuit may be filed by a wide range of people including: an attorney in fact, guardian, and trustee for the adult;
a person authorized to make health care decisions for the adult; a spouse, parent, or descendent of the adult; a presumptive heir; a person named as a beneficiary to receive any property, benefit, or contractual right on the adult's death, including a person who would be a beneficiary but for the financial exploitation; and the personal representative or special administrator of an estate of the deceased adult.
Finally, the statute of limitations is 5 years.
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“Financial exploitation” means an act taken by a person who (i) Stands in a position of trust and confidence with a susceptible adult or older adult and who knowingly obtains or uses, or endeavors to obtain or use, a susceptible adult's or older adult's funds, assets, or property with the intent to temporarily or permanently deprive the susceptible adult or older adult of the use, benefit, or possession of the funds, assets, or property for the benefit of someone other than the susceptible adult or older adult, in such a manner that is not fair and reasonable; (ii) By deception, false pretenses, false promises, larceny, embezzlement, misapplication, conversion, intimidation, coercion, isolation, excessive persuasion, or similar actions and tactics, obtains or uses, or endeavors to obtain or use, a susceptible adult's or older adult's funds, assets, or property with the intent to temporarily or permanently deprive the susceptible adult or older adult of the use, benefit, or possession of the funds, assets, or property for the benefit of someone other than the susceptible adult or older adult; or (iii) Knows or should know that a susceptible adult or older adult lacks capacity to consent and who obtains or uses, or endeavors to obtain or use, the susceptible adult's or older adult's funds, assets, or property with the intent to temporarily or permanently deprive the susceptible adult or older adult of the use, benefit, or possession of the funds, assets, or property for the benefit of someone other than the susceptible adult or older adult.
(2) “Financial exploitation” includes:
(i) Breach of a fiduciary relationship resulting in the unauthorized appropriation, sale, or transfer of property; (ii) Unauthorized taking of personal assets (iii) Misappropriation, misuse, or transfer of assets belonging to a susceptible adult or older adult from a personal or joint account; and
(iv) Intentional failure to effectively use a susceptible adult's or older adult's income and assets for the necessities required for the susceptible adult's or older adult's support and maintenance.
(3) “Financial exploitation” does not include an individual's good-faith use of a susceptible adult's or older adult's assets, including for the purposes of establishing and implementing an estate plan intended to reduce taxes or to maximize eligibility for public benefits in order to preserve assets for an identified or identifiable person.
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