Tuesday, February 2, 2016

Illinois Law Prof. Kaplan Offers "Boomer Guide" to Defined Contribution Plan Distributions

Prolific scholar Richard Kaplan, from Illinois Law, has a new article with a clever title. Here's a taste from the abstract for What Now? A Boomer’s Baedeker for the Distribution Phase of Defined Contribution Retirement Plans:” 

Baby Boomers head into retirement with various retirement-oriented savings accounts, including 401(k) plans and IRAs, but no clear pathway to utilizing the funds in these accounts. This Article analyzes the major factors and statutory regimes that apply to the distribution or “decumulation” phase of defined contribution retirement arrangements. It begins by examining the illusion of wealth that these largely tax-deferred plans foster and then considers how the funds in those plans can be used to: (1) create regular income; (2) pay for retirement health care costs, including long-term care; (3) make charitable donations; and (4) provide resources to those who survive the owners of these plans.

This very practical article appears in NYU's  Review of Employee Benefits and Executive Compensation, Chapter 4, for 2015. 

 

February 2, 2016 in Current Affairs, Estates and Trusts, Ethical Issues, Property Management, Retirement | Permalink | Comments (0)

Thursday, January 28, 2016

If The Issue Is Accountability, Which Is Better? Power of Attorney or Guardianship?

Here are two recent appellate cases that offer views on issues of "accountability" by surrogate-decision makers.  

In the case of In re Guardianship of Mueller (Nebraska Court of Appeals, December 8, 2015), an issue was whether the 94-year-old matriarch of the family, who "suffered from moderate to severe Alzheimer's disease and dementia and resided in a skilled nursing facility," needed a "guardian."  On the one hand, her widowed daughter-in-law held "powers of attorney" for both health care and asset management, and, as a "minority shareholder" and resident at Mue-Cow Farms, she argued she was capable of making all necessary decisions for her mother-in-law.  She took the position that appointment of another family member as a guardian was unnecessary and further, that allowing that person to sell Mue-Cow Farms would fail to preserve her mother-in-law's estate plan in which she had expressly devised the farm property, after her death, to the daughter-in-law.  

The court, however, credited the testimony of a guardian-ad-litem (GAL), who expressed concern over the history of finances during the time that the daughter-in-law and the mother-in-law lived together on the farm, and further, expressing concerns over the daughter-in-law's plans to return her mother-in-law to the farm, even after a fall that had caused a broken hip and inability to climb stairs.  Ultimately, the Court of Appeals affirmed the lower court's appointment of the biological daughter as the guardian and conservator, with full powers, as better able to serve the best interest of their elder.  

Despite rejection of the POA as evidence of the mother's preference for a guardian,  the court concluded that it was "error for the county court to authorize [the daughter/guardian] to sell the Mue-Cow property.... There was ample property in [the mother's] estate that could have been sold to adequately fund [her] care for a number of years without invading specifically devised property." 

In an Indiana Court of Appeals case decided January 12, 2016, the issue was whether one son had standing to request and receive an accounting by his brother, who, as agent under a POA, was handling his mother's finances under a Power of Attorney.  In 2012, Indiana had broadened the statutory authority for those who could request such an accounting, but the lower court had denied application of that accounting to POAs created prior to the effective date of the statute.  The appellate court reversed:

The 2012 amendment did confer a substantive right to the children of a principal, the right to request and receive an accounting from the attorney in fact. Such right does apply prospectively in that the child of a principal only has the statutory right to request an accounting on or after July 1, 2012, but not prior to that date. The effective date of the powers of attorney are not relevant to who may make a request and receive an accounting, as only the class of persons who may request and receive an accounting, and therefore have a right to an accounting, has changed as a result of the statutory amendments to Indiana Code section 30-5-6-4. Therefore, that is the right that is subject to prospective application, not the date the powers of attorney were created

These cases demonstrate that courts have key roles in mandating accountability for surrogate decision-makers, whether under guardianships or powers of attorney.

January 28, 2016 in Advance Directives/End-of-Life, Cognitive Impairment, Current Affairs, Dementia/Alzheimer’s, Elder Abuse/Guardianship/Conservatorship, Ethical Issues, Property Management, State Cases, State Statutes/Regulations | Permalink | Comments (0)

Friday, January 22, 2016

Filial Friday: South Korea Recognizes "Filial Duty Contracts"

In South Korea, "filial duty" is apparently a hot topic, as reflected by a recent Korean Supreme Court ruling and a public survey.  And it is more than a theoretical concept or moral obligation, with "contract" law principles now coming into play.  As reported in English by the Korea Herald, published on December 30, 2015:

More than 75 percent of South Koreans surveyed by a local pollster think “filial duty contracts” -- a legal document that makes it mandatory for all grown children to financially and emotionally care for their aged parents -- are necessary should they receive any gifts such as real estate or stocks from them.



The survey results were released two days after the Supreme Court ruled in favor of an elderly father who filed a suit against his son, who, in spite of signing a filial duty contract, did not care for his ill mother as promised after receiving a personal estate. The court acknowledged the legality of the document and ruled the son must return the property to his father, as the property was gifted in exchange for his support.

Although "filial duty" has long been considered an important, traditional value in Korea, "the nation's changing family structure" and high costs for housing and education apparently have made it more difficult for elderly Koreans to rely on their children for voluntary care.  The survey, of 567 Koreans, showed strong support for greater enforcement of "filial duty contracts."  

Under the current law, a donor may rescind a gift contract if the recipient committed an act of crime against the donor, or if “the beneficiary is obliged to support the donor but does not do so.” However, the law also states that rescinding a gift contract does not have any effect once the gift has already been given to the beneficiary.

For more details, including a report on a pending bill that would give "Korean parents the right to sue their children in case of mistreatment and to ask them to return any gifts," read "77% of South Koreans See Need for 'Filial Duty Contracts.'" 

January 22, 2016 in Discrimination, Elder Abuse/Guardianship/Conservatorship, Estates and Trusts, International, Property Management, Retirement, Statistics | Permalink | Comments (0)

Thursday, December 31, 2015

Are Financial Institutions Part of the Problem When it Comes to Enabling Financial Exploitation?

The Wall Street Journal has a good article, Officials Seek Clampdown on Elder Fraud, reporting on attempts by federal and state agencies to increase accountability for financial exploitation, especially of older persons, by financial institutions handling the transactions: 

Grappling with growing financial exploitation of the elderly, state officials are pressing for laws that require financial advisers to report suspected “elder fraud” to authorities. But the mandate faces pushback from the financial industry, which says it could result in a massive number of reports that turn out to be false....

 

To help curb the problem, a coalition of state securities regulators in September proposed a model state law that would require financial advisers, including brokers at large investment houses and independent advisers, as well as their supervisors, to report suspected elder financial fraud to both a state securities regulator and an adult protective-services agency.

 

The legislation would mandate prompt reporting by a financial adviser who “reasonably believes that financial exploitation” of an older person “may have occurred, may have been attempted, or is being attempted.” The bill gives brokers and advisers civil immunity from privacy violations for reporting suspected fraud, and allows them to put a temporary hold on suspicious account disbursements. Supporters say advisers and brokers are well-positioned to raise early warnings about exploitation that can leave elderly victims with scant money left for necessities and little time to rebuild savings.

In hearings where I've testified about the potential benefits of so-called "mandatory reporting" by financial institutions, representatives of banks offer a host of explanations for why mandatory reporting isn't necessary.  Sounds like the same arguments I have encountered were repeated for the Wall Street Journal reporters:

Currently, even when financial advisers suspect an aging client is being taken advantage of, many say they are hamstrung by strict rules governing the execution of trades and processing of withdrawals, and worry about violating privacy laws if they report concerns.

 

The current system, “kind of puts advisers and firms in between a sort of legal rock and hard place,” said Steve Kline, director of state government relations for the National Association of Insurance and Financial Advisors, a professional association. The proposed rules aim to provide clarity.

Certainly I understand industry hostility to more regulations.  At the same time, it seems to me that one option would be to offer immunity from tort or contractual liability for "negligent" failure to report suspected financial abuse, for any financial institution that can show it routinely monitors for abuse and that uses a reasonable system for reporting.  A "carrot" rather than a "stick" to encourage reporting. 

Our thanks to University of Illinois Professor Dick Kaplan for sharing this article. 

 

December 31, 2015 in Elder Abuse/Guardianship/Conservatorship, Ethical Issues, Federal Statutes/Regulations, Property Management, State Statutes/Regulations | Permalink | Comments (0)

Monday, December 28, 2015

Bad Behavior by so-called "Professionals"

Sad news about manipulation by attorneys of older clients, and about specific individuals who have been sanctioned recently for their abuse:

  • Florida Supreme Court "permanently disbarred" Cape Coral Florida attorney William Edy for theft from his clients.  Before being charged with second degree grant theft from clients, Edy apparently held himself out as a trustworthy elder law attorney, writing a newspaper column and even commenting on financial abuse of the elderly.
  • New Jersey Supreme Court suspended New Jersey attorney William Torre for one year, while sanctioning his conduct in "borrowing" money from a "vulnerable" 86 year old client, acting in his own self-interest and failing to repay her in a timely and appropriate manner.   

The New Jersey court, writing unanimously, observed:

The Court considers respondent’s conduct against the backdrop of the serious and growing problem of elder abuse. As the population ages, and more people suffer health problems, it is not uncommon for family members to seek the appointment of a guardian to oversee the finances of an incapacitated loved one. Others, like M.D., turn to family or professionals for help and execute powers of attorney in favor of a relative, friend, or trusted lawyer. In those situations, the vast majority of attorneys perform honorably and act in a manner consistent with the highest ethical standards. But regrettably, as more seniors have needed help to manage their affairs, allegations of physical and financial abuse have also increased.

In a News-Press article about the Florida disbarment,  Professor Geoffrey Hazard (Emeritus at Penn Law, Southern California Law and Yale Law) is quoted as noting that places with large numbers of retirees, such as Southern California, Florida and Arizona, have a "greater risk of attorney misbehavior," in part because of isolation from children and friends with whom they can discuss situations. 

Along the same lines of financial misconduct by "professionals," a Texas psychiatrist, Dr. Robert Hadley Gross, was recently sentenced to "nearly six years in prison" for submitting false claims for services to residents at a nursing home, individuals who were shown to be either dead or discharged. 

December 28, 2015 in Crimes, Current Affairs, Elder Abuse/Guardianship/Conservatorship, Ethical Issues, Legal Practice/Practice Management, Property Management, State Cases | Permalink | Comments (0)

Sunday, December 13, 2015

More on Elder Abuse

I don't know whether the issue of elder abuse is just getting more coverage or whether cases of elder abuse are increasing. We all know that elder abuse is a global issue.  I ran across a few recent articles about elder abuse that I wanted to share in this post.

First, The Conversation published Why are we abusing our parents? The ugly facts of family violence and ageism . The article opens with the story of Gwen, who was being abused by her son. The article suggests that "[o]lder people experiencing abuse from family members share the same experience as women suffering intimate partner violence in having someone close to them, whom they ought to be able to trust, perniciously erode their sense of safety and wellbeing through excessive use of power and control." But, when its a child who is the perpetrator, "feelings of parental love and responsibility coupled with shame and guilt for having “failed” as a parent often stop the parent from seeking help and protecting themselves." Turning to Australia, the article examines the prevalence and frequency of multiple abuses of a victim. "For example, financial abuse was coupled with another form of abuse in 65% of cases." Linking abuse and ageism, the article offers that "[promoting the dignity and inherent value of older people is a crucial component of elder abuse prevention."  The article calls for educating professionals, elders and society about the issues.

Next, a newspaper in Bend, Oregon ran the story, Financial exploitation hits close. Report: Most financial exploitation done by someone the victim trusts. "A report by Oregon’s Office of Adult Abuse Prevention and Investigations found nearly three-fourths of Central Oregon’s financial-exploitation cases involved someone known or trusted by the victim." The cases in Oregon are similar to what is happening across the country:"[s]tate investigators recorded 1,059 cases in which people 65 or older, who lived on their own or with a loved a one, were victims of theft or someone had misused their money, medication or property...Financial exploitation for seniors living outside of a long-term care facility was the most common type of elder abuse for the third year running in 2014."

Finally (but finally only for this post; I have no doubt that there will be more posts on elder abuse, unfortunately) CNBC ran a story on elder abuse with a headline that caused me to do a double-take.  Why seniors don't fear elder financial abuse discusses a new report from Allianz Life that "queried over 1,200 seniors and more than 1,000 people ages 40 to 64 about seniors' finances and found that among the seniors, 89 percent were confident they could handle their money on their own. At the same time, 22 percent of the younger group said they were not confident in their own ability to recognize elder financial abuse, or were not sure."

The CNBC story indicates that family members worry more about the elder being a victim than the elder does. "The confidence of the seniors may make them even more vulnerable to financial scams or financial abuse by friends or family members, said Walter White, president and CEO of Allianz Life. ..."Everything we understand about the prevalence of the issue would suggest that confidence is misplaced," he said."  The CNBC story cites some other reports that provide good statistics and discusses the connection between financial exploitation and ultimately a nursing home placement.

That kind of loss can devastate a person's finances, and elder financial abuse is often a major reason why seniors wind up in nursing homes and assisted living facilities on public assistance. Dr. Mark Lachs, co-chief of the division of geriatrics and gerontology at Weill Medical College, has studied the issue and found that an older person who falls victim to abuse, including financial exploitation, is four times more likely to be placed in a nursing home, after adjusting for other known risk factors for nursing home placement.

Discussing the reasons a victim may fail to report financial exploitation, the story adds overconfidence as a reason, citing to the Allianz report. The CNBC story concludes with some links to resources to help fight elder abuse.

More information about the Allianz report is available here.  Allianz also offers a number of materials for elders and professionals available on the Allianz website, here.

 

 

December 13, 2015 in Consumer Information, Current Affairs, Elder Abuse/Guardianship/Conservatorship, Health Care/Long Term Care, Property Management, Retirement, Statistics | Permalink | Comments (0)

Thursday, December 10, 2015

ALI-CLE: Hot Topics in Estate, Trust & Conservatorship Litigation

While researching potential fact patterns to use in my Wills, Trusts and Estate exam (which the students have now taken, although I remain in the Valley of Doom, for those grading essay exams), I came across a recent American Law Institute-CLE course with a very useful outline of "hot" topics in estate, trust and conservator litigation, prepared by Los Angeles attorneys Terrence Franklin and Robert Sacks.  Also available on Westlaw as SW037 ALI-CLE 923, from June 2015, their list of hot topics includes:

  • Legal Standards for Lack of Mental Capacity: contrasting the standards used for assessment of capacity to make wills and revocable trusts, versus more immediate lifetime gifts, and pointing to the Commentary to Uniform Trust Code Section 601 that observes that "Given [the] primary use of the revocable trust as a device for disposing of property at death, the capacity standard for will rather than that for lifetime gifts should apply."
  • Legal Standards regarding Undue Influence: noting that "will and trust contests rarely rely on either a lack of capacity or undue influence claim alone. Usually, these claims are filed together, on the theory that even if the testator had the minimum level of capacity necessary to execute a valid will, her capacity was so diminished that she was more susceptible to the undue influence alleged. And California cases for decades have shown the tough burden a contestant has in contests on grounds of lack of capacity and undue influence."
  • Pre-Death Contests:  discussing standards used for decision-making by appointed guardians or conservators, including "substituted judgment," as well as states that have adopted statutory procedures that "expressly allow for pre-death determination of the validity of a will or trust," including Arkansas, Alaska, North Dakota and Ohio.  See e.g., Ohio Rev. Code Ann. Section 2107.081 to 085.
  • Intentional Interference with Expected Inheritance: summarizing the influential 2012 case of Beckwith v. Dahl, recognizing the tort of IIEI in California.    

In the outline linked above, the authors also addressed practical estate planning topics, such as the importance of asking "why" when crafting dispositive provisions in estate documents,  whether to videotape execution of testamentary documents, and whether to use "no contest" clauses.

December 10, 2015 in Cognitive Impairment, Consumer Information, Elder Abuse/Guardianship/Conservatorship, Estates and Trusts, Ethical Issues, Legal Practice/Practice Management, Property Management, State Cases, State Statutes/Regulations | Permalink | Comments (0)

Wednesday, December 9, 2015

An Interesting Case of "Mandatory" Bank Reporting of Suspected Elder Abuse

Here's a summary of interesting, key findings from the complicated case of Moylan v. Citizens Sec. Bank, an "elder abuse" and wrongful termination claim with a long litigation history in Guam: 

  • Bank Comptroller Moylan realizes his grandparents have certificate of deposit accounts in his bank, with assets totaling more than $1 million.
  • He notes that when the accounts rollover, they are no longer in the names of his grandparents, but rather solely in the names of  two individuals identified as "caretakers" for the grandparents.  
  • Moylan proceeds to "investigate further" and concludes that multiple transactions on the accounts were suspicious, given his "personal knowledge of his Grandparents' advanced age and deteriorating mental condition."
  • Moylan discusses his findings with his brother, an attorney, thus revealing bank account information without getting the permission of his Grandparents or the "caretakers" who were listed on the accounts.
  • The brother advises that the findings may constitute "elder abuse" and thus trigger a mandatory duty to report the activity to Adult Protective Services.
  • Moylan, fearing he may lose his bank job, encourages his father to make the report -- thus again sharing banking information without the consent of the listed account holders, the Grandparents and their caretakers.

Eventually, a guardians is appointed for the grandparents, the bank becomes a subject of the guardian's complaint about handling of the grandparents' accounts, the caretakers (one of whom is a family member) object to Moylan's "misuse" of his access to account information as a bank employee -- and, lo and behold, Moylan is fired in 2007.  Moylan challenged his termination as wrongful.

In 2015, after more than 7 years of litigation in the courts below, the Supreme Court of Guam overturned summary judgment in favor of the bank on Moylan's wrongful termination claim.  That's the good news for Moylan, as the Court recognizes a public policy exception to the "at will" nature of his employment contract:

Because the object and policy of the [Adult Protective Services Act] is to protect the elderly and disabled adults, the reporting requirements of 10 GCA §21003(a) should be construed liberally in favor of promoting the reporting of suspected abuse. This approach is consistent with the fact that the legislature chose to include the term “immediately” instead of a specified reporting deadline. Therefore, we hold that in the limited context of the facts of this case, Scott's oral reporting within seven days after the discovery of alleged abuse qualifies as sufficiently immediate....

 

Termination motivated by Scott's mandatory reporting would jeopardize the public policy to protect elderly and disabled adults from abuse because it would discourage future reporting. Scott presented evidence that at least one Bank executive knew that Scott had caused a report to APS before Scott was terminated.

Under Guam law, mandatory reporting of suspected elder abuse applies to "banking and financial institution personnel." 10 GCA §21003(b).

The bad news is the reversal sends the case back to the trial court for "further proceedings."  The full opinion by the Supreme Court of Guam, issued November 20, 2015, linked above, is well worth reading, as it demonstrates both weaknesses and strengths of statutory attempts to mandate that banks report suspected elder abuse.

December 9, 2015 in Crimes, Elder Abuse/Guardianship/Conservatorship, Ethical Issues, International, Property Management, State Statutes/Regulations | Permalink | Comments (1)

Thursday, November 5, 2015

Are There Limitations on Estate "Re-Planning" Following Adult Adoptions, Especially for Same-Sex Couples?

In my course on Wills, Trusts and Estates, students always seem to be intrigued by "adult adoptions." There can be a variety of reasons for an adult adoption, often tied to estate planning goals, including attempts to create statutory heirs that can nullify challenges by other family members to bequests in traditional estate documents, such as wills or trusts on the grounds of "undue influence."  Sometimes the cases are connected to sad facts, such as the troubled life of tobacco heiress Doris Duke, who at age of 75 adopted a much younger woman, but came to regret that fact, leading to a mostly unsuccessful attempt at disinheritance. Robert Sitkoff's casebook on Wills Trusts & Estates has a fascinating profile of the Duke case, even though the original reasons for the adoption were not entirely clear. 

In the news this week is a less unhappy, but still complicated case -- and I imagine there could be similar cases around the country -- where in 2012,  after forty years as a same-sex couple, a retired teacher adopted his partner, a retired writer: 

Now, they're trying to undo the adoption to get married and a state trial court judge has rejected their request, saying his ability to annul adoptions is generally limited to instances of fraud.

 

"We never thought we'd see the day" that same-sex marriage would be legal in Pennsylvania, Esposito, 78, told CNN in a telephone interview. The adoption "gave us the most legitimate thing available to us" at the time, said Bosee, 68.

 For more on the facts, see "Couple Seeks Right to Marry.  The Hitch? They're Legally Father and Son," by CNN writers Evan Perez and Ariane de Vogue.  
 
And a hat tip to Dickinson Law student Kadeem Morris, who spotted this interesting piece. 

November 5, 2015 in Current Affairs, Estates and Trusts, Ethical Issues, Legal Practice/Practice Management, Property Management, State Cases, State Statutes/Regulations | Permalink | Comments (0)

Tuesday, November 3, 2015

WSJ: Are Guardianship Systems Under Critical Review?

A recent article in the Wall Street Journal focuses on challenges in state courts to how guardianships operate and the role of courts in appointment and oversight of guardians.  Titled "Abuse Plagues Systems of Legal Guardianships for Adults," the on-line version of the article carries the subtitle of "Allegations of financial exploitation and abuse are rife, despite waves of overhaul efforts."  The article uses extensive details from just two guardianship caess, one in the state of Washington involving a 71 year-old woman, and one in Florida involving an 89 year-old "mother," to  develop its theme of financial exploitation and abuse, pointing to critics that say "many elderly people with significant assets become ensnared in a system that seems mainly to succeed in generating billings."

The article includes statements from National Academy of Elder Law Attorneys president elect, Catherine Seal, providing a contrasting view of properly-managed guardianships.  She is quoted as saying, "The worst cases that I see are the ones where there is no guardian."

Arizona is identified in the article as a state that has adopted safeguards on unnecessary or abusive fees "by establishing fee guidelines" in 2012. Of course it did so after a significant 2010-2011 investigative news series by the Arizona Republic in Maricopa County that exposed a series of cases in which court permitted  fees and delays significantly impacted the alleged incapacitated persons' financial resources. 

The WSJ article, I think, can be criticized for using just two cases of conflict to dramatize allegations of systemic problems, characterized as exploitation.   We need to talk about systemic reform needs by looking beyond single case reports 

It seems clear, however, if you follow the pockets of deeper investigations from across the nation, including recent challenges in Florida and Nevada where allegations focused on an array of court-permitted problems, including delays generating more costs, or overly cozy relations between court-appointed guardians and courts, or the absence of monitoring systems, that there are larger systemic issues in need of watchful eye and, in certain jurisdictions, critical examination and reform.

My thanks to Marilyn Berquist and Rick Black for recommending the WSJ article.

November 3, 2015 in Current Affairs, Elder Abuse/Guardianship/Conservatorship, Estates and Trusts, Ethical Issues, Property Management | Permalink | Comments (1)

Sunday, November 1, 2015

LeadingAge 2015 Meeting Begins in Boston

LeadingAge Annual Meeting Program 2015.htmThe four-day annual meeting for LeadingAge, a trade association for providers of senior services with "6,000+ members and partners including not-for-profit organizations representing the entire field of aging services, 39 state partners, hundreds of businesses, consumer groups, foundations and research partners," starts today, November 1, in Boston  The program offerings are impressive with as many as two dozen choices per educational session and keynote addresses by high profile individuals, such as Monday's speaker, Dr. Atul Gawande, famed author of a best selling and much discussed book that challenges thinking on end-of-life case, Being Mortal.

I find LeadingAge as an organization to be fascinating, not least of all because of the scope of providers under its umbrella, but also because it has proven itself to be very responsive to changes in the market place.  It was once known as AAHSA or American Association of Homes and Services, but voted to change its name to LeadingAge in 2010. 

More changes are in the works, as long-time and much respected Larry Minnix is retiring as the head honcho of LeadingAge.  Nonprofit Continuing Care Retirement Communities (CCRCs) were once a major (perhaps even the most dominate) part of the membership, but as the senior care and services market is changing that is less and less true, especially with trends in favor of mergers and acquisitions, including not infrequent  transitions to for-profit operations.  Interestingly, during this year's meeting, LeadingAge is announcing a new for name for CCRCs.  Stay tuned!

This organization clearly understands the need for change to stay attractive to consumers.  At the same time, name changes can also complicate understanding by consumers of the choices available to them -- and can complicate state efforts to evaluate and, where appropriate, regulate different models of senior and adult housing and care services.

November 1, 2015 in Current Affairs, Health Care/Long Term Care, Housing, Programs/CLEs, Property Management, Statistics | Permalink | Comments (0)

Thursday, October 22, 2015

NYT: Dying Alone Is Not -- in the Long Run -- a Solo Activity

In one of those feature articles that The New York Times does so well, N.R. Kleinfeld reports The Lonely Death of George Bell.  It is a sad story, as Mr. Bell died in his apartment at the age of 72 and no one "missed him," so his body was not discovered for days.  You may have stopped reading precisely because it is such a sad story.  But, at the same time, George's story is a surprising tale of the potential consequences of dying alone.  The article lays out the layers of necessary decision-making, from the simplest of questions -- where will George be buried -- to the complex, where public authorities must hunt for an executor and for beneficiaries named in George's 30-year old will.  Then, in turn they must hunt for their heirs, when it turns out that this modest man's death left behind almost a half million dollar estate and few living connections.

My thanks to Penn State law student Kevin Horne who shared with me the link to this interesting story.  As he points out, this story gives another side to our course on Wills Trusts & Estates.     

October 22, 2015 in Current Affairs, Estates and Trusts, Legal Practice/Practice Management, Property Management, State Cases, State Statutes/Regulations | Permalink | Comments (2)

Wednesday, October 21, 2015

The Importance of Understanding Trusts in Family Law, Especially If Divorce Looms

The ABA Section on Family Law has devoted the entire Fall 2015 issue of its Family Advocate magazine to "Crossing Paths with a Trust."   The paper copy of the issue just appeared on my desk. The opening editorial advises family law attorneys advising clients considering divorce not to fear trusts:

Lawyers who simply take a deep breath and read the trust will often be surprised to learn that they have in their hands a road map for how assets will be managed, who gets what, when they get it, and under what terms. 

The articles in the issue include a "plain English guide to trusts as a means of orchestrating assets in divorce cases," how trusts can interact with disclosure requirements for premarital agreements, how to address equitable division of interests assigned to trusts, the use of child support or alimony trusts, and the unique potential advantages for using trusts for "special needs" planning for disabled children.  The issue ends with a bonus -- a primer on "will basics."

The articles underscore what I sometimes find myself saying to law students, that courses on "wills, trusts and estates" are about advanced family law issues, and that if families fail to address disputes among family members while they are still living, the issues may not be any less complicated when the asset-holding family member passes away. 

The entire issue seems like a good resource for a wide audience, including law students.  Unfortunately, the on-line version of Family Advocate issues is restricted to ABA Family Law Section members, at least during the first few weeks of  publication.  Apparently you can purchase paper copies (see for example the rates for the previous issue, for  Summer 2015) , including bulk orders, although I find there is often a lag time for specific issues to become available to purchase.  I guess you have to keep checking!    

October 21, 2015 in Estates and Trusts, Ethical Issues, Health Care/Long Term Care, Housing, Legal Practice/Practice Management, Property Management, Retirement, State Cases, State Statutes/Regulations | Permalink | Comments (0)

Monday, October 19, 2015

Market Trends in Financing for Senior Housing Options

Recently I was reading an issue of The Senior Care Investor, a subscription-based news service that reports on the "World of Senior Care Mergers, Acquisitions, and Finance," and doing so since 1948. 

For approximately the last three years, most of the M & A activity has been in assisted living (AL) and memory care (MC).  Senior Care Investor reports that CCRCs are "beginning to make a comeback" as the housing market recovers and prospective residents are again able to use equity in their homes to finance transitions into CCRCs.  The most recent issue also indicates some development money is returning to the skilled nursing facility market, even as overall M & A activity in senior housing is lower in 2015 than in 2014.  

I've been watching quite a bit of activity over the last few years in conversions of nonprofit senior housing operations to "for profit" and there is more evidence of that in the latest report. But the most recent issue (Issue 9, Volume 27) also reports on a "rare for-profit to not-for-profit deal," with a New Mexico-based company, Haverland Care LifeStyle Group, purchasing a new AL/MC community in Oklahoma.  

Also, the Senior Care Investor reports on a faith-based, not-for-profit CCRC provider that has decided to sell an entrance fee model (one that's in transition to an "all rental" model) that will offer independent living, AL, MC units and nursing home beds.  What happens when senior housing operations are fully "private pay" AND "rental" models AND disconnected from a faith-based organization?  Can they maintain their tax-exempt status? In other words, if the public is paying market rates (and thus higher rates based on any market increases) with no promises of future care if the residents run out of money, is that senior housing enterprise still a nonprofit operation entitled to be treated as exempt from federal income taxes?   

October 19, 2015 in Current Affairs, Federal Statutes/Regulations, Health Care/Long Term Care, Housing, Property Management, Retirement, State Statutes/Regulations | Permalink | Comments (1)

Thursday, October 15, 2015

When One Spouse Uses Community Funds to Care for His Infirm Parent, Is That A Breach Of Fiduciary Duty to His Spouse?

Last week I spoke on filial support duties, and one question from the audience was whether Pennsylvania's filial support law could obligate someone to provide for a stepparent.  My answer under Pennsylvania law was "probably not." My analysis was based on Pennsylvania cases, such as Commonwealth v. Goldman, that had used a strict definition of parent-child relationship for purposes of calculating the limits on indigent support obligations, although doing so in the context of in-laws rather than stepparents.

But something in the back of my mind was itching, and of course, over  the weekend I started scratching.  I remembered a case, which did seem to recognize a potential for indirect obligations to "parents-in-law." 

The case is from California, where divorcing spouses were arguing over division of community property.  One focus of the disputes was proceeds of the sale of a former house.  While rejecting an argument that the sale of the property transmuted the funds into 50/50 separate property, a California appellate court was willing to consider the expenditure by the husband of some of these funds to care for his "infirm mother" to be a "community debt."  Further, the court observed that unlike the obligation to "reimburse the community" for payment out of community funds to support a child not of that marriage, there was no statutory obligation to "reimburse the community" if the funds were used to care for one spouse's parent.

Pointing to California's "not commonly known" filial responsibility law, the court held that if the funds were actually spent for care of his indigent mother, such use did not constitute an "unauthorized gift."  

The court went further, however, noting that "a spouse's debt payments may constitute a breach of fiduciary duty and run afoul" of California law dealing with contracts with third parties, when entered into by only one married party. A bit of a Catch-22 problem, right? However, this interesting fiduciary duty issue "was not raised" in the parties' briefs and therefore was not resolved on this appeal.

On remand, husband was "entitled to establish the funds were expended to support his mother, who was in need and unable to maintain herself."  For the full analysis, including citations to the relevant California statutes, see In re the Marriage of Leni (2006).

October 15, 2015 in Estates and Trusts, Ethical Issues, Health Care/Long Term Care, Property Management, State Cases, State Statutes/Regulations | Permalink | Comments (0)

Monday, October 12, 2015

Mental Health Awareness - What They Don't Teach You in Law School (...Really??)

Last week was "Mental Illness Awareness Week," and in recognition of that fact, Maryland  Attorney Michael E. McCabe, Jr. posted an important Blog item on representing clients with diminished capacity.  I'm impressed that discussion of the need for lawyers to appreciate the potential for mental health to impact any aspect of the lawyer-client relationship is written for the IPethics & INsights blog, his law firm's " resource for intellectual property rights attorneys." 

In other words, the topics of mental health and legal capacity are not exclusively the province of estate planners, elder law attorneys, disability law practitioners or poverty law experts.

He notes at the outset:

According to the leading mental health organization in the country, 1 in 5 adults in the United States suffers from some form of mental health condition or disorder. Thus, it is likely that at some point in your legal career, you will be representing an individual client or a representative of a corporate client, who suffers from some degree of mental illness.

Attorney McCabe points to ABA Model Rule of Professional Conduct 1.14 as guidance, while also suggesting:

A two-prong test may be useful when determining the existence and degree of a client's mental illness:

 

(1) "take reasonable steps to optimize capacity," and

 

(2) "perform a preliminary assessment of capacity."

Attorney McCabe also links (although not directly attributing his recommendation) to Charlie Sabatino's important 2000 article, "Representing a Client with Diminished Capacity:  How Do You Know It And What Do You Do About It?"

I suppose I do have a small quarrel with the author, however.  The title of his post is "What They Didn't Teach You in Law School: Representing  Client with Diminished Capacity."  Mr. McCabe graduated law school in 1992, and perhaps diminished capacity was not well addressed by law schools at that time.  Although it could be my bias as an academic interested in aging policy, I believe law schools have changed with the times.  Certainly I find myself teaching the importance of "capacity" issues and the attorney-client relationship, and I start this in my 1L course on Contracts, while digging deeper into the field of mental health impacts in Wills/Trusts/Estates and, of course, Elder Law.  Other faculty members address mental health in a variety of other contexts, including courses on education law.

If Mr. McCabe is right that law schools are not currently addressing the complex concerns attached to mental health, then certainly the moral from his column is "we need to do better." 

My thanks to Attorney McCabe, and to Dickinson Law Professor Laurel Terry for sharing his article. 

October 12, 2015 in Cognitive Impairment, Current Affairs, Dementia/Alzheimer’s, Ethical Issues, Health Care/Long Term Care, Legal Practice/Practice Management, Property Management | Permalink | Comments (0)

Tuesday, October 6, 2015

"Over the Hill" as an Evolving History Lesson

We have mentioned Hendrik Hartog's book, Someday All This Will Be Yours: A History of Inheritance and Old Age, (Harvard Press 2012) on this Blog as we did on this post outlining a recent symposium law review with articles inspired by the book.  I've been remiss, however, in not recommending the book directly. 

So let me correct that oversight now.  If you haven't read Princeton Professor Hartog's book, or if (as was true for me for too long) you have allowed the book to sit on your "to read" stack, it's time to get to it.  The book is a treasure of analysis, commentary, legal history, critique and provocation arising from the simple proposition that in many relationships, someone often utters (or thinks they have heard) words to the effect, "when I'm gone, someday, all this will be yours."  The underlying legal question is what happens when no document (such as a will, a trust, or a contract) puts that pledge into writing.

I find much to talk about when reading Hartog's words.  One curious item he describes is a poem, "Over the Hill to the Poor House," published by Will Carleton in 1872.  Hartog explains that the poem is the source for the now common saying "over the hill" to refer to persons of a certain age.  But Hartog points out that the poem's poignancy comes from its all-too-true narrative by one woman about what it can be like to grow old, frail and widowed, even if you have a large family of loving children.

From the closing lines of the poem:

An’ then I went to Thomas, the oldest son I’ve got,
For Thomas’s buildings’d cover the half of an acre lot;
But all the child’rn was on me—I couldn’t stand their sauce—
And Thomas said I needn’t think I was comin’ there to boss.

An’ then I wrote to Rebecca, my girl who lives out West,
And to Isaac, not far from her—some twenty miles at best;
And one of’em said’twas too warm there for any one so old,
And t’other had an opinion the climate was too cold.

So they have shirked and slighted me,an' shifted me about-
So they have well-nigh soured me,an' wore my old heart out;
But still I've borne up pretty well, an' wasn't much put down,
Till Charley went to the poor-master, an' put me on the town.

Over the hill to the poor-house--my chil'rn dear, good-by!
Many a night I've watched you when only God was nigh;
And God 'll judge between us; but I will al'ays pray
That you shall never suffer the half I do to-day.

And for a colorful "sung" version of the poem, with a change in gender for point-of-view, go to Lester Flatt and Earl Scrugg's version of Over the Hills to the Poorhouse

Over 140 years later, we still hear the phrase "over the hill" in less-than-kind contexts, but one hopes the prospects for care and assistance are not quite as grim as described in these verses. 

October 6, 2015 in Books, Estates and Trusts, Ethical Issues, Property Management, State Cases, State Statutes/Regulations | Permalink | Comments (0)

Monday, October 5, 2015

Webinar on October 6: The "A to Zahner" on Medicaid Annuities

Sorry for the short notice, but on Tuesday, October 6, 2015 from noon to 1 p.m. (Eastern time), the Pennsylvania Bar Institute is hosting a very timely (and cleverly titled) webinar, focusing on the impact of the Third Circuit's recent decision in Zahner on Medicaid planning generally and specifically on the sue of annuities. 

Here is a link to PBI's details on "The A to Zahner on Medicaid Annuities," including how to register.

October 5, 2015 in Current Affairs, Estates and Trusts, Ethical Issues, Federal Cases, Federal Statutes/Regulations, Medicaid, Property Management, Webinars | Permalink

New Illinois Law on "Presumptively Void" Bequests to Non-Family Caregivers Has "Starring" Role

Illinois adopted a new law, Public Act 098-1093, effective on January 1, 2015 that assigns a "presumptively void" status to bequests made to non-family caregivers, if the transfer would take effect upon the death of the cared-for person.  The law applies only to post-effective date bequests that are greater than $20,000 in fair market value.  The statutory presumption can be "overcome if the transferee proves to the court" either:

1. by a preponderance of the evidence that the transferee's share under the transfer instrument is not greater than the share the transferee was entitled to receive under ... a transfer instrument in effect prior to the transferee becoming a caregiver, or

 

2. by clear and convincing evidence the transfer was not the product of  fraud, duress or undue influence.

The law only applies in civil actions where the transfer is challenged by other beneficiaries or heirs. 

(Fun) Spoiler Alert:  The new law plays a clever "starring role" in the Fall 2015 season premiere of  The Good Wife.  Let's see how many of our law students were watching!

October 5, 2015 in Current Affairs, Elder Abuse/Guardianship/Conservatorship, Estates and Trusts, Ethical Issues, Film, Property Management, State Cases, State Statutes/Regulations | Permalink | Comments (1)

Wednesday, September 16, 2015

Ward vs. Incapacitated Person? The Challenges of Labels in Modern Proceedings

Catching up on a bit of reading, I notice that the Uniform Laws Commission has a committee hard at work on drafting proposed revisions to the 1997 Uniform Guardianship and Protective Proceedings Act  (UGPPA).  University of Missouri Law Professor David English is Chair of that committee,  with many good people (and friends) on the working group.

In reviewing their April 2015 Committee Meeting Summary, available here, I was interested to see the following note under the discussion heading about "person-first language:"

Participants engaged in a lively discussion of the desirability of person-first language, and possible person-first terminology.  There was general agreement that the revision should attempt to incorporate person-first language.  For the next meeting, the Reporter [University of Syracuse Law Professor Nina Kohn] will attempt a draft that uses language other than "ward" or "incapacitated" to the extent possible and utilizes person-first language instead (precise wording still to be determined).  The Reporter will also attempt to use a single term that can describe both persons subject to guardianship and those subject to conservatorship.

I've struggled with "labels" in writing and speaking about older adults generally, and incapacitated persons specifically.  It will be interesting to see what the ULC committee recommends on this and even more daunting tasks, including how to better facilitate and promote "person-centered decision-making" and limited guardianships.

September 16, 2015 in Cognitive Impairment, Current Affairs, Dementia/Alzheimer’s, Elder Abuse/Guardianship/Conservatorship, Estates and Trusts, Ethical Issues, Health Care/Long Term Care, Property Management, State Statutes/Regulations | Permalink | Comments (0)