46-456

46-456. Duty to a vulnerable adult; financial
exploitation; civil penalties; exceptions; definitions

A. A person who is in a position of trust and confidence to a vulnerable adult
shall use the vulnerable adult's assets solely for the benefit of the vulnerable adult
and not for the benefit of the person who is in the position of trust and confidence to
the vulnerable adult or the person's relatives unless either of the following applies:

1. The superior court gives prior approval of the transaction.

2. The transaction is specifically authorized in a valid durable power of attorney
that is executed by the vulnerable adult as the principal or in a valid trust instrument
that is executed by the vulnerable adult as a settlor.

B. A person who violates subsection A of this section or section 13-1802,
subsection B shall be subject to actual damages in a civil action brought by or on behalf
of a vulnerable adult and the court may award additional damages for an amount up to two
times the amount of the actual damages.

C. In addition to the damages prescribed in subsection B of this section, the court
may:

1. Order a person who violates subsection A of this section or section 13-1802,
subsection B to forfeit all or a portion of the person's benefits under title 14, chapter
2 with respect to the estate of the vulnerable adult, including an intestate share, an
elective share, an omitted spouse's share, an omitted child's share, a homestead
allowance, any exempt property and a family allowance. If the vulnerable adult died
intestate, the vulnerable adult's intestate estate passes as if the person who violated
subsection A of this section or section 13-1802, subsection B disclaimed that person's
intestate share to the extent the court orders that person to forfeit all or a portion of
the person's benefits under title 14, chapter 2.

2. Revoke, in whole or in part, any revocable:

(a) Disposition or appointment of property that is made in a governing instrument
by the vulnerable adult to the person who violates subsection A of this section or
section 13-1802, subsection B.

(b) Provision by the vulnerable adult that is contained in a governing instrument
that confers a general or nongeneral power of appointment on the person who violates
subsection A of this section or section 13-1802, subsection B.

(c) Nomination or appointment by the vulnerable adult that is contained in a
governing instrument that nominates or appoints the person who violates subsection A of
this section or section 13-1802, subsection B to serve in any fiduciary or representative
capacity, including serving as a personal representative, executor, guardian,
conservator, trustee or agent.

3. Sever the interests of the vulnerable adult and the person who violates
subsection A of this section or section 13-1802, subsection B in any property that is
held by them at the time of the violation as joint tenants with the right of survivorship
or as community property with the right of survivorship, and transform the interests of
the vulnerable adult and the person who violated subsection A of this section or section
13-1802, subsection B into tenancies in common. To the extent that the person who
violated subsection A of this section or section 13-1802, subsection B did not provide
adequate consideration for the jointly held interest, the court may cause the person's
interest in the subject property to be forfeited in whole or in part.

D. A revocation or a severance under subsection C, paragraph 2 or 3 of this section
does not affect any third party interest in property that was acquired for value and in
good faith reliance on apparent title by survivorship in the person who violated
subsection A of this section or section 13-1802, subsection B unless a writing declaring
the severance has been noted, registered, filed or recorded in records that are
appropriate to the kind and location of the property and that are relied on as evidence
of ownership in the ordinary course of transitions involving that property.

E. If the court imposes a revocation under subsection C, paragraph 2 of this
section, provisions of the governing instrument shall be given effect as if the person
who violated subsection A of this section or section 13-1802, subsection B disclaimed all
provisions revoked by the court or, in the case of a revocation of a nomination in a
fiduciary or representative capacity, the person who violated subsection A of this
section or section 13-1802, subsection B predeceased the decedent.

F. Section 46-455, subsections F, G, H, I, K, L, M and P also apply to civil
violations of this section.

G. The vulnerable adult or the duly appointed conservator or personal
representative of the vulnerable adult's estate has priority to, and may file, a civil
action under this section. If an action is not filed by the vulnerable adult or the duly
appointed conservator or personal representative of the vulnerable adult's estate, any
other interested person, as defined in section 14-1201, may petition the court for leave
to file an action on behalf of the vulnerable adult or the vulnerable adult's estate.
Notice of the hearing on the petition shall comply with section 14-1401.

H. Subsections A, B, C, D, E and F of this section do not apply to an agent who is
acting within the scope of the person's duties as, or on behalf of, any of the following:

1. A bank, financial institution or escrow agent licensed or certified pursuant to
title 6.

2. A securities dealer or salesman registered pursuant to title 44, chapter 12,
article 9.

3. An insurer, including a title insurer, authorized and regulated pursuant to
title 20.

4. A health care institution licensed pursuant to title 36, chapter 4 that provides
services to the vulnerable adult.

I. For the purposes of this section:

1. "Asset" includes all forms of personal and real property.

2. "Disposition or appointment of property" includes a transfer of an item of
property or any other benefit of a beneficiary designated in a governing instrument.

3. "Governing instrument" means a deed, a will, a trust, a custodianship, an
insurance or annuity policy, an account with pay on death designation, a security
registered in beneficiary form, a pension, a profit sharing, retirement or similar
benefit plan, an instrument creating or exercising a power of appointment, a power of
attorney or a dispositive, appointive or nominative instrument of any similar type.

4. "Position of trust and confidence" means that a person is any of the following:

(a) A person who has assumed a duty to provide care to the vulnerable adult.

(b) A joint tenant or a tenant in common with a vulnerable adult.

(c) A person who is in a fiduciary relationship with a vulnerable adult including a
de facto guardian or de facto conservator.

(d) A person who is in a confidential relationship with the vulnerable adult. The
issue of whether a confidential relationship exists shall be an issue of fact to be
decided by the court based on the totality of the circumstances.

5. "Revocable" means a disposition, appointment, provision or nomination under
which the vulnerable adult, at the time of or immediately before death, was alone
empowered, by law or under the governing instrument, to cancel the designation in favor
of the person who violated subsection A of this section or section 13-1802, subsection B,
whether or not the vulnerable adult was then empowered to designate the vulnerable adult
in place of the person who violated subsection A of this section or section 13-1802,
subsection B or the vulnerable adult then had capacity to exercise the power.