Legal Question in Elder Law in Louisiana

My legally blind, 78-year-old Mother with end-stage renal disease �invested� the proceeds of her �reverse mortgage� with an entrepreneur the attorney originally writing/funding the transaction introduced her to at the closing (ostensibly to use her money in his business of buying and rehabilitating houses which he then sold to low-income families). He has paid her the agreed 10% monthly, as promised, and this year � to prevent her from withdrawing all her money � offered to paying her 14%. He�s very good looking/charming and gives her personalized attention. She is quite taken with him, sincerely believes he is �honest� and has embraced him emotionally as a �son.� He (and his attorney partner) recently told my only sister (who also believes in him) at their annual �re-signing� of the contract, that my Mother didn�t need the Will I recommended she have (Louisiana probate is tricky) just a Power of Attorney. Without a Will or a Durable POA, what are our chances of getting her money back from her "investment" upon her death?


Asked on 9/26/10, 10:33 am

1 Answer from Attorneys
Adam Lambert The Law Office of Adam S. Lambert

Powers of Attorney terminate at the point of death. A POA can NEVER be a substitute for a will. Once your mother dies, all powers of attorney for her will terminate automatically and you could get in real trouble if you try to use it after you know she has passed away.

As to the attorney doing business with your mother, attorneys are not supposed to enter into business transactions with clients, nor to steer clients towards other businesses for his own profit. To do so without getting written informed consent and informing the client that she should seek other representation prior to entering into the deal can lead to discipline against the attorney by the Louisiana Disciplinary Board (and possibly damages against the attorne in a civil suit). The Board takes complaints online, if you feel your mother has been taken advantage of. They are online at www.ladb.org.

The Rule which MAY have been violated (I can't say for certain it was) is:

RULE 1.8. CONFLICT OF INTEREST: CURRENT CLIENTS: SPECIFIC RULES

(amended 5/19/2006)

(a) A lawyer shall not enter into a business transaction with a client or knowingly acquire an ownership, possessory, security or other pecuniary interest adverse to a client unless:

(1) the transaction and terms on which the lawyer acquires the interest are fair and reasonable to the client and are fully disclosed and transmitted in writing in a manner that can be reasonably understood by the client;

(2) the client is advised in writing of the desirability of seeking and is given a reasonable opportunity to seek the advice of independent legal counsel on the transaction; and

(3) the client gives informed consent, in a writing signed by the client, to the essential terms of the transaction and the lawyer's role in the transaction, including whether the lawyer is representing the client in the transaction.

(b) A lawyer shall not use information relating to representation of a client to the disadvantage of the client unless the client gives informed consent, except as permitted or required by these Rules.

(c) A lawyer shall not solicit any substantial gift from a client, including a testamentary gift, or prepare on behalf of a client an instrument giving the lawyer or a person related to the lawyer any substantial gift unless the lawyer or other recipient of the gift, is related to the client. For purposes of this paragraph, related persons include a spouse, child, grandchild, parent, or grandparent.

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Answered on 10/01/10, 10:50 am


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