Trustee not providing information - the "flags are there"

[strongsilence]

Client is elderly and not competent and owns several properties.

Trustee has bank account authority for the client.

Trustee is not providing information to file the 1099s

Trustee is not allowing me and other key people to see bank statements

Trustee told the property manager that the client owed 400K in taxes for 2025.  The client owed 0.

Trustee is not allowing the bookkeeper to proceed with setting up QuickBooks (which he agreed to do six months ago.)

These are all red flags in my mind.  I'm going to call Aon to see how to proceed.

I am inclined to pressure the trustee to allow us to do the bookkeeping and tax filing in some way, but I have not been in this situation.

[BobKamman]

Check on state law.  Here in Arizona, the first call should be to the police, not to the insurance company.

Arizona Revised Statutes Section 46-454:

...C. An attorney, accountant, trustee, guardian, conservator or other person who has responsibility for preparing the tax records of a vulnerable adult or a person who has responsibility for any other action concerning the use or preservation of the vulnerable adult's property and who, in the course of fulfilling that responsibility, discovers a reasonable basis to believe that abuse, neglect or exploitation of the vulnerable adult has occurred shall immediately report or cause reports to be made of such reasonable basis to a peace officer or to the adult protective services central intake unit. The reports required by this subsection shall be made immediately by telephone or online.

And if you don't do that, you are guilty of a crime yourself. 

...M. A person who violates this section is guilty of a class 1 misdemeanor, except that if the failure to report involves an offense listed in title 13, chapter 14, the person is guilty of a class 6 felony.

[IRonMaN]

I smell a thief.  This is a really good time to listen to Bob ---------------------- not that you can't listen to Bob at a really bad time.

[strongsilence]

Thank you, Ironman. Thank you, Bob.

I see a few California statutes which are relevant, but I don't see one that directly states that a CPA is a mandatory reporter.

Right now, we are trying to get information from the attorney to file 1099s (for the elderly individual and for the Special Needs Trust). I think it is best that I don't file a 1099 for the amount paid to the attorney unless I am absolutely certain of the amount. I suppose it could be claimed that preparing a 1099 with an amount lower than actually paid to him is assisting a crime. I don't know.

15610.30. (a) “Financial abuse” of an elder or dependent adult occurs when a person or entity does any of the following:

(1) Takes, secretes, appropriates, obtains, or retains real or personal property of an elder or dependent adult for a wrongful use or with intent to defraud, or both.

(2) Assists in taking, secreting, appropriating, obtaining, or retaining real or personal property of an elder or dependent adult for a wrongful use or with intent to defraud, or both.

[BobKamman]

If you are not a mandatory reporter, you can report anonymously.  Of course that brings up questions about client confidentiality.  And who is the client?  Did you work with the taxpayer directly before he reached the current level of incapacity?  Or do you know him only through the trustee?  

[strongsilence]

Two clients:

1. Her as an individual

2. The Special Need Trust. She was the grantor and trustee for a while. The attorney in question is now the trustee. He has control of the bank accounts and statements.

Did you work with the taxpayer directly before he reached the current level of incapacity? 

yes and No. I never spoke with her except hello and courtesies on the phone, one time, five years ago. The property manager for her trust and individually owned properties has been her intermediary. Then two years ago she became incompetent - PER THE ATTORNEY-TRUSTEE.  The property manager has never seen documentation or certification of competence and I haven't either.  That could have been the first sign of malfeasance.

I will speak with an attorney next week.

Aside from legal issues. I now have a moral duty to stop the attorney, and I'll seriously consider an anonymous report if permitted.

[sjrcpa]

perhaps report to the State Bar since the Trustee is an Attorney.

@BobKamman ?

[BobKamman]

State Bar investigations sometimes find criminal conduct, but their primary targets are ethical violations reported by clients.  When you see or suspect a crime being committed, call law enforcement.  Even if you don't have a legal obligation to report, as you note there is a moral obligation.  "See something, say something" doesn't just apply to unattended suitcases at the airport.  

You're trying to meet a 1099 filing deadline?  Don't leave her hanging on that, but I would then end the client relationship.