B. Third Party Disclosures
The Fifteen states integrating the Model Act’s third party disclosure provision allow financial services professionals to disclose suspected abuse to certain trusted persons, even if they are not a legal owner of the senior investor’s account. Eight states (Alabama, Colorado, Indiana, Missouri, Montana, North Dakota, Tennessee and Texas) permit disclosure to anyone reasonably or closely associated with the eligible adult; Six states (Arkansas, Louisiana, Maryland, Mississippi, Oregon and Vermont) permit disclosure only to third parties previously designated by the eligible adult; and one state—New Mexico—not only permits disclosure to reasonably associated third parties, it requires disclosure to designated parties.
In response to these laws, many financial services firms have adopted some form of “emergency contact” or “trusted contact” authorization form. This form allows senior clients to designate trusted third parties to contact when concerns about abuse arise. Mike Rothman is the NASAA President and also Minnesota’s Commissioner of Commerce. Mr. Rothman has suggested that all firms adopt the use of these forms to combat the financial exploitation of seniors. The Securities Industry and Financial Markets Association (SIFMA) has developed a customizable form for firms to use. The form is available at: www.sifma.org/seniorinvestors/toolkit/.
2. Transactional Holds
Eighteen states now permit financial services professionals to delay disbursement of funds from a senior’s account when there is suspicion of exploitation. States vary, however, on how long such a hold may last. Some states use the Model Act’s 15-day hold, while others permit delays of only 5 or 10 days. In states where a hold is permitted, state agencies, including the state’s Adult Protective Service agency, can extend the hold for an additional 10 to 30 days, depending on the state. A further extension is possible upon application to the court. Importantly, each of the states adopting these measures extend immunity to those financial services professionals holding or delaying disbursements in good faith. The following chart summarizes the state provisions: