Sunday, July 20, 2014

17th Annual Elder Law Institute in Pennsylvania: Packed Program on July 24-25

The growing significance and scope of "elder law" is demonstrated by the program for the upcoming 2014 Elder Law Institute in Philadelphia, Pennsylvania, to be held on July 24-25.  In addition to key updates on Medicare, Medicaid, Veterans and Social Security law, plus updates on the very recent changes to Pennsylvania law affecting powers of attorney, here are a few highlights from the multi-track sessions (48 in number!):

  • Nationally recognized elder law practitioner, Nell Graham Sale (from one of my other "home" states, New Mexico!) will present on planning and tax implications of trusts, including special needs trusts;
  • North Carolina elder law expert Bob Mason will offer limited enrollment sessions on drafting irrevocable trusts;
  • We'll hear the latest on representing same-sex couples following Pennsylvania's recent court decision that struck down the state's ban on same-sex marriages;
  • Julian Gray, Pittsburgh attorney and outgoing chair of the Pennsylvania Bar's Elder Law Section will present on "firearm laws and gun trusts."  By coincidence, I've had two people this week ask me about what happens when you "inherit" guns.

Be there or be square!  (Who said that first, anyway?)     

July 20, 2014 in Advance Directives/End-of-Life, Elder Abuse/Guardianship/Conservatorship, Estates and Trusts, Ethical Issues, Federal Cases, Federal Statutes/Regulations, Health Care/Long Term Care, Housing, Legal Practice/Practice Management, Medicaid, Medicare, Programs/CLEs, Property Management, Retirement, Social Security, State Cases, State Statutes/Regulations | Permalink | Comments (0) | TrackBack (0)

Tuesday, July 15, 2014

Faculty Share Work from Australian Research Network on Law & Ageing

Representatives from some 16 countries participated in the 2014 International Elder Law and Policy Conference at John Marshall Law School on July 10-11.  There was impressive participation -- especially given the distances for travel to attend the short and intense conference -- by faculty members from Australia, including Dean Wendy Lacey from the University of South Australia School of Law, Associate Dean Meredith Blake from the University of Western Australia School of Law, Lisa Barry from Macquarie University Law School in Australia, and Eileen Webb from the University of Western Australia School of Law. 

I learned that there is a strong research network on law and ageing topics in Australia, ARNLA.  Many of the issues they are addressing mirror issues recognized elsewhere in the world, even as the laws and standards may differ between the countries.  Several of the Australian participants reported on recent research or works in progress.Flag_of_Australia_(converted)_svg

For example, Meredith Blake addressed the challenge of using advance directives to honor the directions or wishes of a principal after the individual develops dementia.  She pointed out that unlike some U.S. states that require agents to follow the principal's known wishes or directions, in Queensland the use of a "best interest" standard for agents acting under health care directives may frustrate the wishes of the principal.  Using a detailed and realistic hypothetical to illustrate concerns, Professor Blake urged adoption of a more flexible approach. 

Eileen Webb's presentation focused on how property law concepts in Australia may help or hinder efforts to respond to instances of potential financial abuse, as where an older individual allows or directs transfer of property interests to other family members or unrelated individuals "without adequate protection or for consideration which is illusory."

Professor Webb introduced me to a new but useful label,"family accommodation arrangements," which she reported was one of the most frequent sources of concern for elder abuse in Victoria.  I was particularly impressed by graphs she created to illustrate and organize potentially applicable legal theories, including fraud, undue influence, estoppel, failed joint ventures, common intention and contributions to purchase price for third parties.  The theory of law used to pursue a claim may affect the relief available. Professor Webb urged adoption of specific legislation in Australia to better address the potential for abuse through property transfers.

July 15, 2014 in Advance Directives/End-of-Life, Crimes, Elder Abuse/Guardianship/Conservatorship, Estates and Trusts, Property Management | Permalink | Comments (0) | TrackBack (0)

Tuesday, July 8, 2014

The Challenges of Enacting Uniform Laws on Powers of Attorney

If one looks at the Uniform Law Commission website, it appears that slow but steady progress is being made by states in adopting recommended legislation governing Powers of Attorney (POAs).  The ULC recommendation reflected more than four years of research and drafting, culminating in a detailed proposal for POAs issued in 2006.  According to the website, 16 states have enacted the uniform law, with an additional four states, Connecticut, Mississippi, Washington, and my own home state, Pennsylvania, considering adoption in 2014.   The ULC's recommendations were a deliberate attempt to "preserve the durable power of attorney as a low-cost, flexible, and private form of surrogate decision making while deterring use of the power of attorney as a tool of financial abuse of incapacitated individuals." 

On July 3 last week, Pennsylvania's Governor Corbett signed legislation, now designated as Act 95 of 2014, making significant changes to the existing law governing POAs in Pennsylvania.  However, the passage of this law also demonstrates how so-called "uniform" laws may be less than uniform from state-to-state in terms of their actual requirements, and I tend to wonder whether other states have also enacted some variation on the ULC's recommendation. 

Pennsylvania Act 95 of 2014 (available as HB 1429 here) took more than 3 years of drafting, redrafting, hearings, negotiations, and compromises to accomplish.  The spur for adoption was a court decision invalidating transactions executed in reliance on a "void" power of attorney, one purportedly "signed" with an X by a woman while hospitalized.  The majority decision put the financial impact on the party accepting the POA, without regard to whether it was using good faith in relying on a document that may appear valid on its face.  After that decision, many Pennsylvania retirement plan administrators, banks or other financial institutions were reluctant to  honor POAs, fearing they could become the guarantor of misused authority.  See Vine v. Commonwealth of Pennsylvania State Employees Retirement Board, 9 A.3d 1150 (Pa. 2010). 

PA Act 95 of 2014 addresses the "Vine" question by clarifying a grant of immunity for any person who in "good faith accepts a power of attorney without actual knowledge" of voidness or other invalidity.  But Act 95 also mandates certain execution protocols, including:

  • for most but not all POAs, requiring the principal's signature, mark or third-party signature to occur in front of two adult witnesses;
  • requiring the principal to acknowledge his or her signature before a notary public or other individual authorized by law to take acknowledgments;
  • continuing the requirement that principals must sign "notice" forms, but now with enhanced warnings about the significance of POAs, including the recommendation that "before signing this document, you should seek the advice of an attorney at law to make sure you understand it;"
  • continuing the requirement that agents must sign an acknowledgement of certain responsibilities, now including an obligation to "act in accordance with the principal's reasonable expectations."

Each of these execution requirements, although certainly permitted by ULC's proposal (and perhaps also entirely consistent with the ULC's concern about the potential for financial abuse), is greater than what is required by the Uniform Law on Powers of Attorney. 

At the same time, the Uniform Power of Attorney Act includes potential remedies for abuses of POAs not addressed by old or new law in Pennsylvania, including Section 116 that would grant spouses, parents, descendants and presumptive heirs the right to seek judicial review of an agent's conduct. One open question in Pennsylvania is whether wider standing to challenge suspected abuse is necessary.

One takeaway message from the history of more than 8 years of consideration by states of the Uniform Law on POAs, and more than 3 years of consideration in Pennsylvania about how or whether to adopt some or all of UCL's specific approach, is that achieving uniformity of state civil laws is not an easy task.  That makes me even more appreciative of the effort and comparative "ease" of adoption of early efforts at uniformity, such as the uniform commercial code and the recognition that interstate sales transactions would benefit from consistency.

Portions of Pennsylvania Act 95 of 2014, including the grant of immunity for good faith reliance on POAs by third-parties, are immediately effective, while other portions of the law take effect on January 1, 2015.  The Pennsylvania Elder Law Institute on July 24-25 in Philadelphia will have several sessions addressing the effect of the new law.

ElderLawGuy Jeff Marshall also has a great overview of the new Pennsylvania law on his blog.  Hat tip also goes to Pennsylvania attorney Bob Gerhard for keeping Pennsylvania practitioners up-to-date on the bill numbers and enactment details. 

July 8, 2014 in Advance Directives/End-of-Life, Elder Abuse/Guardianship/Conservatorship, Estates and Trusts, Ethical Issues, Programs/CLEs, State Cases, State Statutes/Regulations | Permalink | Comments (0) | TrackBack (0)

Thursday, June 12, 2014

U.S. Supreme Court Addresses Status of "Inherited" IRA Accounts in Bankruptcy

On June 12, the U.S. Supreme Court issued its decision in Clark v. Rameker, concluding that "inherited" IRAs are not protected from a holder's creditors during bankruptcy.  Justice Sotomayor delivered the opinion for a unanimous court.  In so ruling, the Court rejected application of the "retirement fund" exemption, because unlike a holder's self-funded IRA, inherited accounts lack the "planning" motivation that justified protection of the funds as a retirement asset.  

 Forbes described the result as "an opinion with far-reaching implications."   

Hat top to ElderLawGuy Jeff Marshall as the first to send the link this decision. 

June 12, 2014 in Estates and Trusts, Federal Cases, Retirement | Permalink | Comments (0) | TrackBack (0)

Sunday, May 25, 2014

Some intra-family feuds NEVER end...

Via the BBC: 


Distant relatives of King Richard III have lost their High Court battle over where his remains should be reburied.  His remains were found in a Leicester car park in 2012 _75053607_75053606and the city's cathedral was lined up for his tomb, but some wanted him reburied in York.  But a group claiming descent from the king's wider family were granted a judicial review, arguing more views should have been taken into account.  Judges at the High Court said there was "no duty to consult".  In the ruling, they added: "There was no public law grounds for the court to interfere.  Killed at the Battle of Bosworth in 1485, Richard III was buried in a Leicester church but the building was lost to later development.  Authorities in Leicester said they were delighted at the decision and they looked forward to reinterring the body with "dignity and honour".

 Read more here.

May 25, 2014 in Estates and Trusts, Other | Permalink | TrackBack (0)

Thursday, May 22, 2014

It's A Packed Schedule for World Congress on Adult Guardianships May 28-30

One of the speakers for the World Congress on Adult Guardianships, taking place next week in the Washington D.C. area, is visiting this week at Penn State Dickinson School of Law.

Prof. Dr. Dagmar Brosey, from Cologne University of Applied Sciences, is part of a two-person panel titled "Adult Guardianship Decision-Making Process: Psychomorphological and Legal Perspectives."  Professor Brosey, a lawyer, teaches courses on law for social work students, including advanced degree students.  During her visit, we've been talking about similarities and differences in approaches between Germany and the U.S. to protection and advocacy for adults, including older adults.  Dagmar Brosey

For example, I've learned that Germany has moved away from "guardianships" (as Americans often describe a court-appointed system of substitute decision-makers) to a system which does not require a finding of "incapacity" in order to permit appointment of a "Betreuer," a German word which translates into English as "custodian." A literal translation by itself is not quite adequate, as Dr. Brosey explains a German "Betreuer" also functions as a type of "legal caregiver." The Betreuer therefore has great responsibilities to ascertain the capabilities, desires and interests of the principal, rather than simply make decisions "for" the principal.  Professor Brosey also emphasizes that the modern German approach should be "person-centered," and involves recognition of "necessity" to determine the scope of the appointed person's authority to make decisions. 

A deeper understanding of the 22-year old German system will help the thinking of Americans and others, who are often more familiar with the historic view on how guardianships should function.  The contrast in approaches is central to the debates that are likely to take place at the Congress next week.  Even in Germany, with its modern approach, there is discussion underway about whether the Betreuer's role should be one of "supported decision-making" or "shared-decision-making," or "substituted-decision making."

Professor Brosey's co-presenter, Prosper Ayawei, from the Bayelsa State Government of Nigeria, has a background in psychology.  Thus, his emphasis is on a "psychomorphological" analysis. The contrast between their two presentations should be very illuminating. Their breakout session is scheduled for Thursday, May 29 at 1:45 p.m.

For more on the packed schedule for this important conference, here's a link to the program

May 22, 2014 in Elder Abuse/Guardianship/Conservatorship, Estates and Trusts | Permalink | Comments (0) | TrackBack (0)

Monday, May 19, 2014

Planning for the "Tough" Times

Casey Kasem, Mickey Rooney, Brooke Astor.  High profile, recent examples of tough times for aging individuals.  For lawyers, their histories demonstrate the challenges of planning. Lawyers juggle tough questions about how to handle waning capacity and respect an individual's preferences, while recognizing the probable need for safety and quality care. Add to this the reality that family members are often involved directly and indirectly.  We hope everyone agrees and is well intentioned, but, there are no guarantees. 

Texas Elder Law Attorney Renee Lovelace has a very good article from a few years ago, using another high profile example of the challenges of planning.  She writes about economist and statistician Mollie Orshansky who passed away in 2006 at the age of 91.  Orshanky's name has been in the news again recently because of renewed discussion of the "poverty thresholds" she articulated in the 1960s and which are still used (probably irrationally) as a measurement tool for public benefits. 

In her later years, Orshansky was at the center of a dispute about care that might be in her "best interest" but that also might be inconsistent with her expressed wishes.  In "Working with Elder Clients Who Refuse Help," (Texas Bar Journal, February 2008, available as downloadable PDF from archives), Renee writes:

"But when Ms. Orshansky needed assistance, she rejected help from family. She was hospitalized, and the court, critical of the family for not preventing her decline, appointed a nonfamily guardian. The resulting saga included an interstate guardianship battle, allegations of family kidnapping, a riveting series of Washington Post articles and Senate Committee hearings.  While Mollie's story may be movie-worthy, it is alarming to realize that she did everything that we suggest clients do to plan ahead — and her case still had a disastrous result."

Lovelace identifies several key points to keep in mind when helping clients to plan ahead, including the importance of "the talk" with family members.  She discusses the possibility of building in monitoring options, while also recognizing the potential for even the best intentioned caretaker or agent to make mistakes. She talks realistically about the need for balance between "people, paper and money." 

What are other techniques and approaches -- more than just documents and legal advice -- that seasoned lawyers use to avoid these kinds of disputes?  Feel free to add your "comments."

May 19, 2014 in Cognitive Impairment, Current Affairs, Elder Abuse/Guardianship/Conservatorship, Estates and Trusts, Ethical Issues | Permalink | Comments (0) | TrackBack (0)

Thursday, May 15, 2014

Analyzing State Trust Law and Federal Welfare Programs

Maryland Elder Law and Disability Law specialist Ron Landsman provides a thoughtful analysis of use of trusts, especially "special needs trusts," to assist families in effective managment of assets.  His most recent article, "When Worlds Collides: State Trust Law and Federal Welfare Programs," appears in the Spring 2014 issue of the National Academy of Elder Law Attorneys (NAELA) Journal.   Minus the footnotes, his article begins:

"'Special needs trusts,' which enable people with assets to qualify for Supplemental Security Income (SSI) and Medicaid, are the intersection of two different worlds: poverty programs and the tools of wealth management.   Introducing trusts into the world of public benefits has resulted in deep confusion for public benefit administrators. . . . The confusion arising from the merger of trust law with public benefits is sharply drawn in the agencies' [Social Security Administration (SSA) and Centers for Medicare and Medicaid Services (CMS)]  attempts to define what it means for a trust to be for the sole benefit of the public benefits recipient. Public benefits administrators have focused on the distributions a trustee makes rather than the fiduciary standards that guide the trustee.  The agencies have imposed detailed distribution rules that range from the picayune to the counterproductive and without regard, and sometimes contrary, to the best interests of the disabled beneficiary."

Drawing upon his experience in drafting trusts for disabled persons, Ron takes on the challenge of explaining how and where he sees the agencies' focus on "distribution" as misguided.  He contends, for example:

"The [better] task for CMS and SSA [would be] to use their authority to develop standards and guidelines that utilize, rather than thwart, competent, responsible, properly trained trustees as their partners in making special needs trusts an effective tool in serving the needs of people with disabilities.  If this were done properly, capable trustees would be the allies of the federal and state agencies in the efficient use of limited private resources.  Beneficiaries would live better, more rewarding lives to the extent that resources can make a difference, at a lower cost to Medicaid, with a greater possibility of more funds recovered through payback."

Ron is detailed in his critique of agency guidelines and manuals, and he provides clear examples of his "better" sole benefit analysis. 

May 15, 2014 in Estates and Trusts, Federal Cases, Health Care/Long Term Care, Housing, Medicaid, Property Management, Social Security, State Cases, State Statutes/Regulations | Permalink | Comments (0) | TrackBack (0)

Friday, April 25, 2014

Prof. Alexander Boni-Saenz on "Personal Delegations"

Chicago-Kent Law Professor Alexander A. Boni-Saenz shared a copy of his law review article, "Personal Delegations," published recently in the Brooklyn Law Review.  Here is an intriguing excerpt from the introduction, minus the footnotes:

"Donald and Gloria Luster married on October 5, 1963 and had four children. Donald retired in 2005, and it was about this time when Jeannine Childree, his youngest daughter and a registered nurse, noticed that he was exhibiting signs of dementia. After a number of consultations with doctors, Donald was officially diagnosed with Alzheimer's disease in 2009 due to his memory loss, disorientation, and other cognitive impairments. Based on these medical evaluations, a Connecticut probate court declared Donald incapable of handling his personal or financial affairs and appointed Jeannine and his other daughter, Jennifer Dearborn, as his guardians. Shortly thereafter, Gloria filed for a legal separation from Donald, and in response, the daughters counterclaimed for divorce, suspecting their mother of financial and emotional abuse. Should the guardian-daughters have the authority to sue for divorce on behalf of their father?"

The author then offers a second fact pattern, involving a man serving as agent for his incapacitated brother under a power of attorney, asking whether the agent should have "authority to execute a will on his brother's behalf," where only a small percentage would be left to the brother's biological child. 

Professor Boni-Saenz suggests that the numbers of people lacking "decisional capacitiy" are in the millions and "will only increase with an aging population."  This likelihood "presents many difficult questions" while also creating "an opportunity to rethink and reevaluate how the law treats people with cognitive impairments."  He then introduces his "personal delegation" thesis, in support of giving greater deference to agents in certain circumstances, permitting them to make binding decisions that might otherwise be questioned under what he outlines as a bias or presumption in current law:

 "The central claim of this article is that in the case of decisional incapacity, decisions that implicate fundamental human capabilities should generally be delegable. Thus, it rejects the rationale employed by courts to justify nondelegation--that these types of decisions are too personal to be made by another. This line of reasoning confuses nondelegation for nondecision, and it only serves to privilege a status quo outcome over the expression of fundamental human capabilities by individuals with cognitive impairments."

The full article is easily available on SSRN and on Professor Boni-Saenz' faculty web page, linked above.

April 25, 2014 in Cognitive Impairment, Dementia/Alzheimer’s, Elder Abuse/Guardianship/Conservatorship, Estates and Trusts, State Cases, State Statutes/Regulations | Permalink | Comments (0) | TrackBack (0)

Wednesday, April 23, 2014

Dementia Diagnosis and the Law

On April 24, I have the good fortune to be working with a neuropsychologist from the neurology department at Penn State Hershey Medical Center in presenting a program on "Dementia Diagnosis and the Law," for a meeting of the Estate Planning Council in York, Pennsylvania.  Professor Claire Flaherty and I have "traded" presentations in the past, with her speaking at the law school and me speaking at the medical school, but this will be our first time presenting together.  We're excited. 

One of the important lessons that I've learned in working with Claire is the clear potential for cognitive impairment to exist without the "usual" symptoms associated with "Alzheimer's."  For example, much of Claire's work is with patients and families coping with early onset dementias.  Because Frontotemporal Dementia or FTD (sometimes also referred to as Frontotemporal Lobar Degeneration or FTLD) can begin to manifest in persons aged 45 to 64 years, the onset may be overlooked or misunderstood. Plus, as Claire reminds me, "FTD is primarily a disease of behavior and language dysfunction, while the hallmark of Alzheimer's Disease is loss of memory."

For legal professionals, including those asked to prepare deed transfers, wills or estate planning documents, the potential for subtle presentations of cognitive impairment can be especially significant.  Making sure the client is oriented as to "time, place and person" may not be enough to address the potential for loss of judgment, thus opening the door for unusual gifts, risky financial decisions or even of adamant rejection of once trusted family members. 

A good place to turn for information about early onset forms of dementia, including FTD, is the Association for Frontotemporal Degeneration or AFTD -- or join us for the York Estate Planning Council meeting this week.  

April 23, 2014 in Cognitive Impairment, Dementia/Alzheimer’s, Estates and Trusts, Ethical Issues, Legal Practice/Practice Management | Permalink | Comments (0) | TrackBack (0)

Monday, April 21, 2014

Potpourri: Recent "Elder Law" Articles from SSRN

Here's a sampling of recently published articles from the Social Science Research Network (SSRN) falling loosely under the heading of "Elder Law" as well as other classifications:

From our Law Prof Blogging colleague Gerry Beyer, "Who Said Learning Trusts & Estates Can't Be Fun?"  The abstract alone is inspiring for those of us who teach in this field:

"From even before their first day of law school, Texas Tech University School of Law students have the opportunity to appreciate the importance of the estate planning area and to understand that it can be both an enjoyable and rewarding area of law in which to practice. During orientation, which takes place the week before classes start, new students participate in full-day programs centered on a particular area of practice either of their own choosing or assigned by the administration. For the 2013 entering class, I was in charge of two full-day Estate Planning Tracks with a total of aproximately thirty-five entering students.



As their legal education continues, students have additional exposure, some mandatory and some optional, to estate planning topics. In my first year required Property course, I spend several days reviewing the basic principles of intestate succession and wills. Texas Tech then requires all students to complete a four-credit introductory course entitled Wills and Trusts as a condition of graduation during their second or third year. Students desiring a more sophisticated treatment may take courses such as Estate Planning, Texas Estate Administration, Guardianship, Estate and Gift Tax, Elder Law, and Marital Property. Students may also compete for a coveted position as an editor for the Estate Planning and Community Property Law Journal that Texas Tech publishes.



This Article reveals my basic teaching philosophy and the general pedagogical techniques I employ to make Trusts and Estates topics both fun and relevant. I will then share with you the specific tools I use when teaching the introductory course as well as the advanced courses such as Estate Planning and Texas Estate Administration. It is my hope that you may be able to gain insight from my approach to enhance your own teaching and the experience you provide to your students."

From Northern Illinois Law Librarian Sharon Nelson, a thoughtful bibliography of articles drawing lines between mistreatment of animals and the potential for family member abuse or neglect.  I have to say that I never thought about this connection before, but it does ring true for a possibly related phenomenon I observed when we were interviewing caregivers for an aging family member.  If candidates were nervous around our completely benign pooches, they rarely coped well with the not-so-benign family member.  Nelson sumarizes her article, titled "The Connection Between Animal Abuse and Family Violence:"

"This Selected Annotated Bibliography assembles legal and social literature that examines the link between domestic violence and animal abuse. Drawing from an ever-growing body of written works dedicated to the issue, the Bibliography presents the works that are most informative and useful to the legal community. These include case studies, current and proposed legislation, and social services guides that address the occurrence of and response to the animal cruelty-family violence correlation. In doing so, the Bibliography creates a resource that will prove helpful to a variety of legal practitioners, law makers, and professionals within the criminal justice system, and will serve as a tool to promote further understanding of the patterns of abuse that often concurrently victimize both humans and animals."

And from Canadian J.D. candidate Mathew Ponsford, an article about implications of advance care decision-making issues and legislation in Ottowa, "A Discussion of Conflict Resolution Processes Used in End-of-Life Care Disputes Between Families and Healthcare Providers in Canada."  The abstract begins:

"Conflict at the end-of-life, particularly between families and healthcare providers, involves many complex factors: differing opinions surrounding a patient’s prognosis, cultural differences, moral values and religious beliefs, associated costs, internal family dynamics, and of course, legal ramifications. Bill-52 (2013): An Act Respecting End-of-Life Care, introduced in Québec's National Assembly, will have far-reaching implications for healthcare decision-making for families, healthcare providers, religious groups, and others. Here, Bill-52 is used as the backdrop to examining the often neglected stories of disputes arising between families and healthcare providers, and the communication strategies, negotiation and mediation processes which result amidst an often stressful, costly, and time-consuming ordeal. Numerous conflict resolution processes are discussed, but the Consent and Capacity Board, regulated through Ontario's Health Care Consent Act (HCCA), is the primary focus. The importance of empathy and cultural understanding is also analyzed, as well as the challenges of cross-cultural conflict, including sensitivities toward Canada's First Nations peoples."

April 21, 2014 in Advance Directives/End-of-Life, Crimes, Current Affairs, Elder Abuse/Guardianship/Conservatorship, Estates and Trusts | Permalink | Comments (0) | TrackBack (0)

Sunday, April 13, 2014

Critical Issues to Consider in Planning Via Powers of Attorney

ElderLawGuy Jeff Marshall succinctly discusses four critical issues that individuals and families should consider when using Powers of Attorney in estate and incapacity planning. Here's the link to Jeff's "Powers of Attorney: Things You Need to Know."  

April 13, 2014 in Advance Directives/End-of-Life, Consumer Information, Elder Abuse/Guardianship/Conservatorship, Estates and Trusts, Property Management | Permalink | Comments (1) | TrackBack (0)

Friday, April 4, 2014

Florida Supreme Court Ruling Demonstrates More Dangers of DIY Will "Forms"

The Florida Supreme court ruled unanimously in Aldrich v Basile on March 27 that property acquired by a testator after execution of her will was not be controlled by the will, because although she had made bequests, the "E-Z Legal Form" she used did not include a residuary clause to address non-specific bequests.   Thus the after-acquired property passed by intestacy laws to family members not mentioned in the will.

The testator has used the "will form" to make specific bequests of several items of valuable property, including her house, vehicle and bank accounts (identified by numbers) to her sister, and provided that if her sister "dies before I do I leave all listed to" her brother.  The sister died first, leaving "Putnam County" property to the testator. Two nieces (children of a second brother, also deceased) asserted an interest in the probate action, arguing that "without any general devises and in the absence of a residuary clause," the will "contained no mechanism to dispose of the after-acquired property." They could recover under Florida's intestacy laws. 

The court also rejected consideration of a separate hand-written note by the testator as evidence of her "true" intent with regard to the after-acquired property to the named brother, because Florida's law requires "the same formalities" as a will for codicils.

In a separate concurring opinion, Justice Pariente pointed to the pre-printed will form, noting there was no "space to include a residuary clause or pre-printed language that would allow a testator to elect to use such a clause." Justice Pariente described the unfortunate decision by the testator to rely on a form, rather than hire a "knowledgeable lawyer," as an example of the "old adage 'penny-wise and pound-foolish:'"

"I therefore take this opportunity to highlight a cautionary tale of the  potential dangers of utilizing pre-printed forms and drafting a will without legal assistance.  As the case demonstrates, that decision can ultimately result in the frustration of the testator's intent, in addition to the payment of extensive attorney's fees -- the precise results the testator sought to avoid in the first place."

For another example of a "penny-wise and pound foolish" outcome from use of commercial estate planning "forms," see our October 2013 post on a Pennsylvania case, see "Do-It-Yourself Wills:  Penny Wise & Pound Foolish?"

 Thanks to Professor Laurel Terry for pointing to an ABA Journal Blog post on the Florida case.

 

April 4, 2014 in Current Affairs, Estates and Trusts, State Statutes/Regulations | Permalink | Comments (0) | TrackBack (0)

Friday, March 28, 2014

Failure of Consideration and Promises to "Care for Grandma for the Rest of Her Life"

This semester I'm teaching Contracts, which always provides interesting opportunites to introduce "Elder Law" concerns in a traditional course.

This week I offered a not-so-hypothetical fact pattern, where Grandmother deeds house to Grandchild, in exchange for Grandchild's "promise to care for Grandma for the rest of her life."  Whenever I use this hypo, I pick one of a number of reasons the agreement does not work out as planned, such as the individuals don't get along with each other, grandchild gets pregnant or ill, etc.  This week's reason was "Grandma needs more specialized care" but cannot afford it because she's given away her primary resource. Grandchild doesn't want to sell the house, now that it is "hers," and she doesn't want to take out a mortgage. House

I ask the students to brainstorm Grandmother's options.  Almost always, someone suggests Medicaid, and we talk about whether Medicaid will provide adequate assistance and whether there are potential barriers to eligibility for public benefits, such as the five-year look back period. 

Students sometimes suggest Grandmother is subject to "undue influence," which if proven would be grounds for potential rescission.  Good job!  Except that I am usually careful in my hypo not to make Grandchild overtly manipulative.  And in truth, many of these arrangements begin more because of the desires of the aging individual, than because of any greed on the part of the younger person. We also explore "incapacity" and "duress" as possible grounds for rescission.

This week, students also suggested "failure of consideration" as grounds for rescission.  There is an interesting line of cases, perhaps a hybrid of Property and Contract law, that treats "support deeds" as a specific analysis, potentially justifying relief. Examples include:

  • Gilbert v. Rainey, 71 SW. 3d 66 (Ark. Ct. App. 2002), permitting mother to rescind deed for failure of consideration, and admitting mother's parol evidence to show daughter promised life care in exchange for the conveyance of the home, to show that conveyance was not a completed gift;
  • Frasher v. Frasher, 249 S.E. 2d 513 (W.Va. 1978), granting cancellation of deed from grandparents to grandchildren, on the grounds that where discord arises between the parties to a "support deed" between an aged grantor and a younger family member, the property should be restored "if it can be done without injustice" to the younger family member. 

After class was over, some of my students stopped by to chat, offering variations on the hypothetical, sometimes from examples within their own extended families.  In both of the sample cases above, the court attaches special meaning to the concept of "support deeds" going from older to younger generation, but most of the cases along this line are fairly old.  The fact that my students were offering modern variations on the fact pattern suggests there may be good reason to revisit this area of the law. 

Perhaps any resurgence in this topic is another sign of our "aging" times. So, that leads to my question, does your state recognize failure of consideration, tied to "support deeds," as grounds for rescission of a conveyance?

March 28, 2014 in Cognitive Impairment, Current Affairs, Estates and Trusts, Ethical Issues, Health Care/Long Term Care, Housing, Medicaid | Permalink | Comments (2) | TrackBack (0)

Sunday, March 23, 2014

California Court: Enforceability of Mandatory Arbitration Clauses in Trusts

On March 11, 2014, California's intermediate appellate court ruled that a mandatory arbitration clause in an inter vivos trust would not control, where the beneficiary challenging the trust "was not a signatory to the arbitration agreement."  The daughter who challenged the document alleged her mother lacked capacity to sign the newly revised agreement in question and contended the revisions were the product of "elder abuse" and undue influence.  The decision offers much to consider. 

In McArthur v. McArthur, the court noted enforceability of arbitration provisions in trusts was a question of first impression in California and turned to other states for guidance.  In Schoneberger v. Oelze, 96 P. 3d 1078 (Az. Ct. App. 2004), the Arizona court ruled that arbitration clauses contained in trusts agreements are generally not enforceable against nonsignatory beneficiaries, a decision that was later superseded by revisions to Arizona statutes.  In Rachal v. Reitz, 203 S.W. 3d 840 (Tex. 2013), the Texas Supreme Court relied on wording of the state's arbitration law in concluding a trust beneficiary can be bound to arbitrate, regardless of whether the trust document was analyzed as a contract.

In ruling against mandatory arbitration, the California court characterized one daughter's argument that "public policy" favored arbitration of trust disputes as more appropriate for the Legislature.  The Court concluded that "whatever the national trend might be, [the proponent of the trust and mandatory arbitration] fails to demonstrate that any other jurisdiction would compel arbitration under the facts of this case, where the [contesting] beneficiary has not either expressly or implicitly sought the benefits of a trust agreement containing the disputed arbitration provision."

The California decision also points to several law review articles addressing arbitration provisions in trusts disputes, including a 1995 article by Yale Professor John H. Langbein, and a 2012 article by University of Missouri Law Professor S. I. Strong.  By email, Professor Strong notes it will be interesting to see whether the McArthur case goes to the California Supreme Court. 

While not addressed in the opinion directly, the details of the trust history in the California case also suggest another potentially interesting question, about the use of particular "mandatory" dispute mechanisms or mandated organizations that could favor a certain result. 

The original McArthur trust, created in 2001, apparently granted the three daughters equal shares of their mother's estate.  The challenged 2011 amendment, however, allegedly favored one daughter and as described in footnote 2, added a "Christian Dispute Resolution" provision that described the mother and that same daughter as "Christians [who] believe the Bible commands them to make every effort to live at peace and to resolve disputes with each other in private or within the Christian church." The mother as "Trustor" and the mother and daughter as "Co-Trustees agree that any claim or dispute arising from or related to the Trust as amended shall be settled by biblically based mediation and, if necessary, legally binding arbitration before the Institute for Christian Conciliation (TM), a division of Peacemaker (R) Ministries...."  

So, if one challenges the very essence of the amended trust and the role of the new co-trustee, doesn't that suggest the challenger might have a uniquely steep uphill climb, whether or not a "member" of the faith or organization granted the power of enforcement?

March 23, 2014 in Elder Abuse/Guardianship/Conservatorship, Estates and Trusts, Religion, State Cases | Permalink | Comments (0) | TrackBack (0)

Monday, March 17, 2014

Student Comment on Expansion of Medicaid Estate Recovery

From 3L student Katie L. Summers at my own law school, Penn State Dickinson,  a recently published Penn State Law Review comment titled "Medicaid Estate Recovery: To Expand, or Not to Expand, That is the Question."  Here is a taste, from the abstract:

"To recoup some of the costs of Medicaid, the states are required to implement a Medicaid estate recovery program.  There are certain mandated requirements, but the reach of the recovery program is primarily left to the discretion of the states.  Pennsylvania recently contemplated expanding its Medicaid estate recovery program, but the proposed changes were not enacted.  This Comment provides an overview of Medicaid estate recovery in Pennsylvania by exploring the background of Medicaid, Medicaid estate planning, and Medicaid estate recovery generally.  In addition, this Comment examines the arguments for and against Medicaid estate recovery.  Finally, this Comment recommends the creation of a system that expands Medicaid estate recovery in Pennsylvania, while retaining certain protections for the deceased Medicaid recipient’s heirs."

March 17, 2014 in Estates and Trusts, Ethical Issues, Federal Cases, Federal Statutes/Regulations, Health Care/Long Term Care, Medicaid, Property Management | Permalink | Comments (0) | TrackBack (0)

Thursday, March 6, 2014

Court's Approval of Estate Account No Bar to Criminal Charges Against Trustee/Agent

In companion appellate cases, a brother and sister argued the Commonwealth of Pennsylvania was "collaterally estopped or otherwise barred by the constitution and/or statute" from bringing criminal charges against them arising from payments from a trust account, because of a civil order "approving" the final accounting in the estate.  Pointing out that the state was not a "party" to the Orphan's Court proceeding, even if it had an interest in proper disbursement of estate funds, the Pennsylvania Superior Court rejected the estoppel arguments as a "matter of law." 

The Court observed, "As [Charles] McCullough has indentified no ruling or filing in the certified record that made the Commonwealth a party to the Orphan's Court proceeding, we conclude that it was not a party. As such, collateral estoppel cannot apply."

The rulings in Commonwealth v. Charles McCullough and Commonwealth v. Kathleen McCullough, decided on February 27,  allow the siblings' cases to go forward on multiple criminal counts, including allegations of theft by unlawful taking and conspiracy.  The allegations go back to 2007, with multiple continuances of the scheduled trial dates.

The court appeared to credit the Commonwealth's theory that the complexity of the case was largely the result of the brother, a licensed attorney, who "intentionally obfuscated his roles as trustee and agent," creating confusion on the part of the bank, a co-trustee.  The brother was charged with "24 crimes arising from his actions as an agent and co-trustee for Shirley Jordan, now deceased. Jordan was approximately 90 years old, a widow without any children, and living in a senior living center when she executed a springing power of attorney in favor of McCollough."  The Court observed that it was estimated that "Jordan had assets of approximately fourteen million dollars at the time."  

Charles is accused of misusing Jordan's assets for his own benefit (including an alleged $10,000 gift to a charity allegedly connected to his family) and of arranging for his sister to be hired at an "exorbitant" rate of $60 per hour for companion services for the elderly woman, as compared to a "Department of Labor estimate of average wages of $8.63 to $9.74 per hour." 

The appellate opinions in the cases are fairly dry.  In fact, the sister was charged with theft of what, at first blush, seems like a fairly small sum, $4,575.01. 

The larger back story, however, includes the allegation that the sister was "hired" as a companion by her brother, using his authority under a Power of Attorney, just weeks after she had been fired and accused of misappropriating more than $1 million from her previous corporate employer. In a separate criminal proceeding, Kathleen McCullough was convicted in 2010 of theft from two companies that employed her, as detailed in the Pittsburgh Post-Gazette.  

March 6, 2014 in Crimes, Elder Abuse/Guardianship/Conservatorship, Estates and Trusts, State Cases, State Statutes/Regulations | Permalink | Comments (0) | TrackBack (0)

Friday, February 28, 2014

Kansas Attorney Disbarred After Forgery of Estate Planning Documents

In the February 7 disbarment of Kansas attorney Daniel R. Beck, the disciplinary record describes a cascading series of events (including the fact that Beck continued to practice law while on administrative suspension). The heart of the case is the attorney's role in execution of "updated" estate planning documents. 

During the disciplinary proceedings, Beck was found to have directed a man to forge the signature of the man's mother, a 90-year old woman in a nursing home, on key documents. Further, the attorney forged the name of his own secretary as the notary on the documents that included a family trust, a general durable power of attorney, a living will, a last will and testament, a health care power of attorney, an assignment of personal property, and an authorization to release health care information.  

The attorney had drafted the original estate plan for the woman and her then-husband. In preparing and executing the "updated" documents, he was interacting solely with the son, although the record does not suggest the son was seeking or receiving any "benefit" from the changes.    

In attempting to avoid major sanctions, the attorney argued that some of the updates, such as a "new" power of attorney and healthcare power of attorney, were necessary "because in his experience sometimes hospitals and financial institutions would not honor those documents if the documents are from a long time ago." At the same time he argued the updated documents made no substantive changes to the existing plan. No harm, no foul as a defense? The Kansas Supreme Court rejected the argument that the attorney's actions caused no harm to the woman in the nursing home, who died a few months after her signatures were forged:

"Respondent [Beck] admits L.H. was vulnerable but asserts that we must construe the word 'victim' to require a showing that the attorney's conduct 'actually exposed] [a] vulnerable client to real and significant harm,' and argues such as showing was not made in this case.

 

We  need not decide whether the term 'vulnerable victim' requires that an attorney expose a client to actual harm because we conclude the record contains adequate evidence of injury, including $2,800 L.H.'s trust paid to respondent for legal work L.H. never authorized, approved, or used....

 

Moreover, since respondent never spoke to L.H., he can only speculate as to whether the documents he drafted could comport with L.H.'s current wishes.  Put simply, an attorney injures, or at least potentially injures, a client when he or she takes legal action on the client's behalf without ever speaking with the client or ensuring that the proposed action is in accord with the client's wishes."

Hat tip to ElderLawGuy Jeff Marshall for this interesting opinion.           

February 28, 2014 in Advance Directives/End-of-Life, Crimes, Estates and Trusts | Permalink | Comments (0) | TrackBack (0)

Monday, February 17, 2014

Australian Court Permits Probate of iPhone "Will"

Under sad circumstances in Australia, where the testator took his own life after creating a "series of documents on his iPhone, most of them final farewells," the Supreme Court of Queensland has ruled that the man's Will created on the iPhone was properly subject to probate. 

Key to the decision in In Re Yu, [2013] QSC 322, are the findings that the electronically created and stored document satisfied all three elements required for nontraditional documents to be accepted for probate under Australian law, including: 

1. The existence of a document, which can include "any disc, tape, or other article, or any material form from which writings are capable fo being produced or reproduced, with or without the aid of another article or device."

2. Whether the document purports to state the testamentary intentions of the deceased.

3. Whether the decased inteneded the document to form his Will. 

The Supreme Court of Queensland is the highest court of Queensland and includes both a trial court and a Court of Appeal.  This decision was issued at the trial court level.

I can see U.S. law professors -- and law students -- already thinking about variations on this fact pattern.  Gives additional significance to the question, "Is there an app for that?"   

February 17, 2014 in Estates and Trusts | Permalink | Comments (0) | TrackBack (0)

Monday, February 10, 2014

Incapacity and the Second Amendment

Florida elder law and estate planning attorney Carla-Michelle Adams observes that state laws, such as that of her home state, are often silent on whether a guardianship determines the right of a ward to possess or access guns.  In an editorial column for the Florida Bar Journal in December 2013, "Grandparents, Guns and Guardianship: Incapacity and the Right to Bear Arms," she urges clarification of state laws to avoid confusion under the Constitution, and contends that guardianship orders should specifically address gun posession: 

"It is imperative that the right to bear arms is effectively removed by order of the court upon a finding of incapacity as a preventative measure for the ward and the community at large. Without legislation specifically indicating that the right to bear arms shall be subject to elimination upon a finding of incapacity, there is a question as to whether the Second Amendment right is subject to retention by the mentally incapacitated ward; the [Florida] statute is ambiguous to this end."

February 10, 2014 in Elder Abuse/Guardianship/Conservatorship, Estates and Trusts, Ethical Issues | Permalink | Comments (0) | TrackBack (0)