Wednesday, December 6, 2017
California Law, Amended in 2017, Sets Process for Contesting Transfer Decisions in Continuing Care Communities
Following my recent post about "evictions" in Continuing Care and Life Plan Communities, Margaret Griffin, the president of the California Continuing Care Residents Association (CALCRA) provided me with a copy of legislation that was signed into law by the Governor in October this year, amending California law on Continuing Care Retirement Community (CCRC) contracts. This history is another window on how to handle involuntary transfers of residents. California's law already provided detailed topics that must be addressed in admission contracts. The newest provision requires greater sharing of any reasons for an involuntary transfer. For "disputed" transfers the law now mandates that the provider:
"... shall provide documentation of the resident's medical records, other documents showing the resident's current mental and physical function, the prognosis, and the expected duration of relevant conditions, if applicable. The documentation shall include an explanation of how the criteria [supporting the involuntary transfer decision] are met. The provider shall make copies of the completed report to share with the resident and the resident's responsible person. "
Further, the amended law provides that even though the CCRC has the right -- under certain conditions -- to transfer the resident, the resident may "dispute" the decision and have the reasons reviewed in a timely manner by the "Continuing Care Contracts Branch of the State Department of Social Services" in California. That office has statutory authority to determine whether the facility has followed its own contractual basis and process for transfers, and "whether the transfer is appropriate and necessary."
Ms. Griffin explains that the law "basically . . . requires an assessment be done to establish a functional reason for the transfer (as opposed to merely having the administrator’s whim be sufficient), and it allows the resident to appeal the actual decision (previously we were limited to requesting a review of the process)."
Thank you, Margaret, both for sharing the latest information on CALCRA's successful advocacy with California Assembly Bill 713, and for your additional commentary.
Tuesday, December 5, 2017
Our friend and colleague, Professor Naomi Cahn at GW Law, sent us a link to a story published in Slate. The Digital Afterlife Is a Mess recounts the tangle created by the number of accounts a person may have, knotted up by company policies and wrapped around various laws.
Today’s world is different. Many of us have chosen to go paperless, so all of our financial statements are delivered electronically; we even file digital tax returns. Our love letters may no longer be written in ink on paper, our reading and listening and viewing interests no longer documented by hardcover books and magazines, record albums, and VCR tapes, and our photos no longer stored in boxes under out beds.
So once the digital asset owner dies, how does the executor gain access to these digital assets and further, determine their value, if any? The article explains the hurdles, including the potential for committing a crime unwittingly by using the decedent's account and password to access digital files. The article turns to the Uniform Act designed to address this growing problem: the Uniform Fiduciary Access to Digital Assets Act, Revised, which has been adopted by almost 2/3 of the states. The Act "allows a fiduciary to manage much of a decedent’s digital property, giving access to many things other than the content of electronic communications (unless this access has been limited by the user or by a court order) and even permitting access to content in certain limited situations." The article explains the 4-tiered system the Act uses for prioritizing and offers practical suggestions such as starting with inventorying your own digital assets, subscribing to an online account management program, and include coverage of digital assets in estate planning documents.
Monday, December 4, 2017
In the Wall Street Journal, there is a recent, wonderful profile of Boston University Law Professor Tamar Frankel, who has been fighting the good fight to gain adoption of "The Fiduciary Rule" for financial advisors, investment brokers and others in positions of trust for her entire academic career.
And, at age 92, she's still fighting the good fight, as the Trump administration recently delayed full implementation.
When Ms. Frankel began researching fiduciary law in earnest in the 1970s, she dwelled on that idea: A fiduciary is someone trusted by others because he or she has superior knowledge and expertise. People hire brokers because the brokers know what they’re doing and the clients don’t. That gives fiduciaries power and responsibility over those who trust them.
The unconditional trust that clients place in a fiduciary creates a paradox, argues Ms. Frankel. “When you get power, you lose the power you might otherwise have,” she says.
A fiduciary adviser can’t abuse the relationship of trust by collecting unreasonable compensation or harboring avoidable conflicts of interest. The relationship is meant to satisfy only the needs of the client.
Professor Frankel appears to be remarkably sanguine about the latest delays:
With the Trump administration putting parts of the fiduciary rule on hold, Ms. Frankel counsels patience.
“What the rule has done is sown the seed, and the longer it takes the better off we are, because what we must change is the culture and the habits in the financial industry,” she says. “Habits don’t change in one day. It takes time.”
After she turns 93 next July 4, Ms. Frankel says, she will stop teaching—although she will continue to research and write. What accounts for her longevity? “Caring less and less about what other people think,” she says, “and more and more about questions you don’t have answers to.”
I have a copy of Professor Frankel's thoughtful treatise on Fiduciary Law (Oxford Univ. Press, 2011) on the shelf behind my desk, complete with sticky notes and much yellow and red highlighting. I've been meaning to write Professor Frankel to thank her for her work over the years -- and now this article reminds me to get to that task!
My thanks to my always eagle-eyed friend and correspondent, Karen Miller, in Florida for this latest find and reminder.
December 4, 2017 in Books, Consumer Information, Current Affairs, Elder Abuse/Guardianship/Conservatorship, Estates and Trusts, Ethical Issues, Property Management, Retirement | Permalink | Comments (0)
Thursday, November 30, 2017
Recently I wrote about a high profile suit filed by AARP attorneys on behalf of residents at a California skilled care (nursing home) facility to challenge evictions.
I've also been hearing about more attempts to evict residents from Continuing Care Communities, also known as CCRCs or Life Plan Communities. For example, in late 2016 a lawsuit was filed in San Diego County, California alleging a senior's improper eviction from a high-end CCRC. The woman reportedly paid a $249k entrance fee, plus additional monthly fees for 15 years. When she reached the age of 93, however, the CCRC allegedly evicted her for reasons unconnected to payment. The resident's diagnosis of dementia was an issue. Following negotiations, according to counsel for the resident, Kelly Knapp, the case reportedly settled recently on confidential terms.
Is there a trend? Are more CCRC evictions happening, and are they more often connected to a resident's diagnosis of dementia and/or the facility's response to an increased need for behavioral supervision? If the answer is "yes," then there is a tension here, between client expectations and marketing by providers. Such tension is unlikely to be good news for either side.
CCRCs are often viewed by residents as offering a guarantee of life-time care. Even if any promises are conditional, families would not usually expect that care-needs associated with aging would be a ground for eviction.
The resident and family expectations can be influenced by pricing structures that involve substantial up-front fees (often either nonrefundable or only partially refundable), plus monthly fees that may be higher than cost-of-living alone might explain. Marketing materials -- indeed the whole ambiance of CCRCs -- typically emphasize a "one stop shopping" approach to an ultimate form of senior living.
In one instance I reviewed recently, the materials used for incoming residents explained the pricing with a point system. The prospective resident was told that in addition to the $100+k entrance fee, an additional daily fee could increase as both "medical and non-medical" needs increased. A resident who "requires continual and full assistance of others . . . is automatically Level C" and billed at a higher rate. The graded components included factors such a need for assistance with "cognition, mood, or behavior," or "wandering." All of that indicates dementia care is part of the "continuing" plan.
CCRCs, on the other hand, may turn to their contract language as grounds for an eviction. Contracts may have language that attempts to give the facility sole authority to make decisions about a resident's "level" of care. Sometimes that authority is tied to decisions about "transfers" from independent living to assisted living or to skilled care units within the same CCRC, as the facility sees care needs increasing. Even same-community transfer decisions can sometimes be hard for families. Complete evictions can be even harder to accept, especially if it means a married couple will be separated by blocks or even miles, rather than hallways in the same complex.
November 30, 2017 in Cognitive Impairment, Consumer Information, Current Affairs, Dementia/Alzheimer’s, Ethical Issues, Federal Cases, Federal Statutes/Regulations, Health Care/Long Term Care, Housing, Medicaid, Medicare, Property Management, State Cases, State Statutes/Regulations | Permalink | Comments (1)
Friday, November 17, 2017
In Pennsylvania, we awoke today to news media images of flames shooting into the night sky from a nursing home near Philadelphia. I suspect many of us feared the worst outcome, including serious injuries to helpless residents, or worse. In the region, wooden structures, narrow streets, and densely populated neighborhoods are the norm.
But, although we are still in the early aftermath of the fire which reportedly ignited around 10:30 at night in a dementia care unit, evacuations occurred swiftly and with the help of the entire community, including college students who joined in the effort. As my blogging colleague has pointed out recently in the context of hurricanes, often the real impact for seniors displaced by emergencies occurs in the days or even weeks after the event. Let's hope we hear positive news about "best practices" in this instance. Lesson number one may involve whether sprinklers in the building operated appropriately.
From one early news account:
November 17, 2017 in Consumer Information, Ethical Issues, Federal Statutes/Regulations, Health Care/Long Term Care, Housing, Property Management, State Statutes/Regulations | Permalink | Comments (0)
Wednesday, November 1, 2017
This week, the last session I was able to attend at LeadingAge's annual meeting was a panel talk on "Legal Perspectives from In-House Counsel." As expected, some of the time was spent on questions about "billing" by outside law firms, whether hourly, flat-fee or "value" billing was preferred by the corporate clients.
But the panelists, including Jodi Hirsch, Vice President and General Counsel for Lifespace Communities with headquarters in Des Moines, Iowa; Ken Young, Executive VP and General Counsel for United Church Homes, headquartered in Ohio; and "outhouse" counsel Aric Martin, managing partner at the Cleveland, Ohio law firm of Rolf, Goffman, Martin & Long, offered a Jeopardy-style screen, with a wide array of legal issues they have encountered in their positions. I'm sorry I did not have time to stay longer after the program, before heading to the airport. They were very clear and interesting speakers, with healthy senses of humor.
The topics included responding to government investigations and litigation; vetting compliance and ethics programs to reduce the likelihood of investigations or litigation; cybersecurity (including the need for encryption of lap tops and cell phones which inevitably go missing); mergers and acquisitions; contract and vendor management; labor and employment; social media policies; automated external defibrillators (AEDs); residency agreements; attorney-client privilege; social accountability and benevolent care (LeadingAge members are nonprofit operators); ACO/Managed Care issues; Fair Housing rules that affect admissions, transfers, dining, rooms and "assistance animals"; tax exemption issues (including property and sale tax exemptions); medical and recreational marijuana; governance issues (including residents on board of directors); and entertainment licensing.
Whew! Wouldn't this be a great list to offer law students thinking about their own career opportunities in law, to help them see the range of topics that can come up in this intersection of health care and housing? The law firm's representative on the panel has more than 20 lawyers in the firm who work solely on senior housing market legal issues.
On that last issue, entertainment licensing, I was chatting after the program with a non-lawyer administrator of a nursing and rehab center in New York, who had asked the panel about whether nonprofits "have" to pay licensing fees when they play music and movies for residents. The panelists did not have time to go into detail, but they said their own clients have decided it was often wisest to "pay to play" for movies and videos. Copyright rules and the growing efforts to ensure payments are the reasons.
The administrator and I chatted more, and she said her business has been bombarded lately by letters from various sources seeking to "help" her company obtain licenses, but she wanted to know more about why. For the most part, the exceptions to licensing requirements depend on the fairly broad definition of "public" performances, and not on whether the provider is for-profit or nonprofit.
It turns out that LeadingAge, along with other leading industry associations, negotiated a comprehensive licensing agreement for showing movies and videos in "Senior Living and Health Care Communities" in 2016. Details, including discussion of copyright coverage issues for entertainment in various kinds of care settings, are here.
November 1, 2017 in Current Affairs, 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, State Cases, State Statutes/Regulations | Permalink | Comments (0)
Monday, October 30, 2017
Over the Halloween weekend, I arrived in New Orleans for overlapping annual meetings involving law and aging issues. Whoa! The Big Easy can be a crazy place at this time of the year! Once I recovered from mistaking the annual "Voodoo Festival" at one end of the convention center for the meetings sponsored by LeadingAge and the National Continuing Care Residents Association (NaCCRA) at the other end, I was safely back among friends. (I suspect a better comedienne than I am could come up with a good "undead" joke here!)
Settling down to work, I participated in half-day NaCCRA brainstorming sessions on Saturday and Sunday. Members of the NaCCRA board and other community representatives worked to identify potential barriers to growth of this segment of senior housing. Why is it that there is still so little public understanding of communities that are purpose-designed to meet a wide range of interests, housing and care needs for seniors who are thinking about how best to maximize their lives and their financial investments over the next 10, 15, 20 or more years?
During the Sunday session led by Brad Breeding of MyLifeSite.net, we heard how Brad's experience as a financial planning advisor for his older clients (who were eager for advice on how to evaluate contracts and financial factors when considering communities in North Carolina), led him and a business partner to develop a more nationwide internet platform for comparative information and evaluations.
I first wrote about Brad's concept on this Blog in 2013 when his My LifeSite company was just getting started, and it is exciting to see how far it has come in less than 5 years. They now offer a searchable data base on over 1,000 continuing care and life plan communities. Best of all, they have managed to stay remarkably independent and objective in the information they offer, and have both consumer and providers as customers for their information. They haven't gone down the slippery slope of reselling potential resident information to providers as "leads."
One audience member, a CCRC resident, who is frustrated about a lack of lawyers in her area with knowledge about the laws governing CCRCs, asked "is there a way to get more 'elder law' attorneys to understand regulations and contracts governing this part of the market so as to be informed advisors for prospective residents seeking objective advice?"
I believe the answer is "yes," particularly if current clients in CCRC-dense areas reach out to Elder Law Sections of Bar Associations in their states, suggest hot topics, and offer to work together on Continuing Legal Ed programs to develop that expertise. I know that almost every year at the annual summer 2-day-long Elder Law Institute in Pennsylvania offers breakout sections for lawyers on the latest laws, cases, and regulations affecting individuals in CCRC settings. Indeed, for "future" attorneys I often use CCRC contracts and related issues as teaching tools in my 1L basic Contracts course.
Friday, October 13, 2017
The National Guardianship Association takes the understandable position that "guardians are entitled to reasonable compensation for their services," while bearing in mind "at all times the responsibility to conserve the person's estate when making decisions regarding providing guardianship services" and in setting their fees. See NGA Standard 22 on Guardianship Service Fees.
Should there be "schedules" for fees, such as hourly fees, or maximum fees? Modern courts often struggle with questions about how to determine fees, and some states, such as Pennsylvania, have a fairly flexible list of common law (not statutory) factors for the court to consider.
In a April 2017 trial court opinion in Chester County, PA, for example, the court reviewed $54k in fees for the lawyer appointed to serve as guardian, and another $13k in fees for an attorney the guardians had hired. According to the court, "Neither had sought leave of court prior to paying these sums out of the principal of the estate; the court learned of this when its auditor reviewed the annual report wherein these payments were disclosed." The ward in question was 87-years old and a resident in a skilled nursing faciility, with dementia and other health issues. The court struggled with the bills, commenting the format used was "inordinately difficult to follow" and at least on first review seemed "high for ten (10) months." For guidance in evaluating the bills, the court did "two things. It first searched the dearth of cases available for any guidance." It also called the individuals to discuss the billing formats and learn more about the work completed.
The Pennsylvania precedent was almost exclusively unpublished opinions, often from trial courts. The Chester County court recounted some of the history of guardianships, from English times to colonial courts to the present, concluding, "In any event, no reported decisions have been located concerning professional compensation of guardians of the persons. Apparently, society had no need of their services until more recent times."
Ultimately, Chester County Court of Common Pleas's Judge Tunnell approved the fees, finding "a number of untoward events which transpired during the year in question," including a serious injury the ward sustained from a fall in the nursing home, additional health related concerns, the decision to relocate her to a different nursing home, and difficulties in selling the home that had remained empty for more than year. The case had a history of accounting disputes, as evidenced by a 2013 decision by the same judge, although it did not appear anyone had challenged the latest fees reviewed sua sponte by the court in the 2017 decision.
In another Pennsylvania opinion, this time from an appellate court but also unpublished, the court observed, apparently with approval, that in Allegheny County, the Guardianship Department in the Orphan's Court uses "court investigators" to review guardians' requests for payment of fees from the incapacitated person's estate. See e.g., In re Long, Superior Court of Pennsylvania, February 14, 2017 (not officially reported).
I'm curious whether our readers have thoughts on "scheduled" fees for guardians?
Monday, October 2, 2017
The case of Fisher v. King, in federal court in Pennsylvania, strikes me as unusual on several grounds. It is a civil rights case, alleging malicious prosecution, arising from an investigation of transferred funds from elderly parents, one of whom was in a nursing home, diagnosed with "dementia and frequent confusion."
Son-in-law John Fisher was financial advisor for his wife's parents, both of whom were in their 80s. He and his wife were charged with "theft by deception, criminal conspiracy, securing execution of documents by deception and deceptive/fraudulent business practices" by Pennsylvania criminal authorities, following an investigation of circumstances under which Fisher's mother-in-law and her husband transferred almost $700k in funds to an account allegedly formed by Fisher with his wife and sister-in-law as the only named account owners. A key allegation was that at the time of the transfer, the father-in-law was in a locked dementia unit, where he allegedly signed a letter authorizing the transfer, prepared by Fisher, but presented to him by his wife, Fisher's mother-in-law. The mother-in-law later challenged the transaction as contrary to her understanding and intention.
Son-in-law Fisher, his wife, and his wife's sister were all charged with the fraud counts. They initially raised as defense that the transactions were part of the mother's larger financial plan, including a gift by the mother to her daughters, but not to her son, their brother.
As described in court documents, shortly before trial on the criminal charges the two sisters apparently agreed to return the funds to their mother, and, with the "aggrieved party" thus made whole, Fisher and his wife entered into a Non-Trial Disposition that resulted in dismissed of all criminal charges. At that point, you might think that everyone in the troubled family would wipe their brows, say "phew," and head back to their respective homes.
Not so fast. Fisher then sued the Assistant District Attorney and the investigating police officer in federal court alleging violations under Section 1983 -- malicious prosecution and abuse of process.
October 2, 2017 in Cognitive Impairment, Crimes, Dementia/Alzheimer’s, Elder Abuse/Guardianship/Conservatorship, Estates and Trusts, Ethical Issues, Federal Cases, Federal Statutes/Regulations, Property Management, State Cases, State Statutes/Regulations | Permalink | Comments (0)
Tuesday, September 26, 2017
Recently, our law school's Community Law Clinic represented a woman who had been living with her brother for more than a year at his 2-bedroom rental apartment. The landlord was fully aware of the situation. Both brother and sister were 70+, and the sister's presence meant that the brother had appropriate assistance, including assistance in paying his bills (and rent!) on time. However, a few weeks ago the brother was hospitalized on an emergency basis, and then required substantial time in a rehabilitation setting, and may not be able to return to his apartment.
What's the problem? When the landlord learned that the brother had been living away from the apartment for several weeks, and was not likely to return, the landlord notified the sister she could not "hold over" and eventually began eviction proceedings against her. Fortunately, the Clinic was able to use state landlord-tenant law to gain some time for the sister to find alternative housing (and to arrange for her brother's possessions to be moved), but both brother and sister were unhappy with the compelled move.
Lots of lessons here, including the need to read leases carefully to determine what that contract says about second tenants, who aren't on the lease. In this situation, the landlord's attempted ouster was probably triggered by the sister making a few reasonable "requests" for improvements to the apartment. The landlord didn't want a "demanding" resident!
The question of "rights" of non-tenant residents happens often in rental housing -- without necessarily being tied to age.
I was thinking about this when I read a recent New York Times column, which offered an additional legal complication -- New York City's rent control laws, and the needs for "dementia-friendly" housing, that can involve caregivers. See Renting a Second Apartment for a Spouse Under Care.
Tuesday, September 19, 2017
Dispute Between Texas Senior Living Providers Sheds Light on Marketing Labels Such as "Assisted Living"
We have written on many legal issues that arise from the attempt by the senior care living industry to market their housing products. For example, see here, here and here for coverage of recent disputes and proposals affecting so-called "assisted living" or "personal care" providers.
Recently In Texas, two competitors have been arguing over the definition of assisted living.
In LMV-AL Ventures, LLC d/b/a The Harbor at Lakeway vs. Lakeway Overlook, LLC., a licensed assisted living facility, Harbor, is attempting to block operations by a new competitor, LTIL, arguing that despite the competitor's attempts to self-identify as offering only "independent living," it is really an unlicensed assisted living community. Harbor earlier had negotiated with the developers of the large-scale community for a deed restriction that would have prevented a competitor offering "assisted living" from moving in.
On May 20, 2017, the United States District Court for the Western District of Texas denied Harbor's motion for preliminary injunctive relief, concluding that Harbor had failed to satisfy its burden to establish "a substantial likelihood of success on the merits."
Part of what is interesting in this dispute is the magnitude of Harbor's efforts to prove their theory that LTIL was an assisted living community in disguise. Harbor hired a private investigator to pose as a prospective client for LTIL. The investigator tape-recorded a sales representative for LTIL.
Arguably, it seems the representative walked a very narrow line between emphasizing ways in which the planned community would meet the assistance needs of an older and potentially disabled client, while also attempting to characterize the menu of services available for purchase from an on-site home-health company as more affordable than the similar services offered by an "assisted living" facility.
During the meeting, Ms. Parker described some of the amenities and services LTIL expected to offer. She explained that LTIL intended to offer three meals a day for residents prepared by an onsite chef, housekeeping, and transportation services. . . . Ms. Parker also described how LTIL features 140 apartments with a variety of floor plans. . . . Ms. Parker stated Capitol [a "home health provider compamy]would be renting space inside LTIL and could provide care such as bathing assistance an elderly resident might need. . . . She indicated personnel would staff the concierge desk twenty-four hours a day and residents would be given a pendant to call for assistance.
Ms. Parker also explained the difference between LTIL and an assisted living facility. According to Ms. Parker, “with[ ] assist[ed] living you're paying a little bit more money but you're also getting care givers that are there on site, uh, all hours of the day. ... and you kind of pay for, the different services that you need. Some medication reminders, bathing and stuff like that. Uh, our community is an independent living.... so the residents that live there are pretty much independent. We don't provide caregivers to help do these things all the time.” . . . Ms. Parker further described how a resident may later need to move to a place that “can give her more care or an assisted living [facility]” when she needs more help.
Monday, September 18, 2017
In a case with sad facts, the lower court in Smith v. Smith certified a question to the Florida Supreme court as follows:
"Where the fundamental right of marry has not been removed from a ward [under state guardianship law], does the statute require the ward to obtain approval from the court prior to exercising the right to marry, without which the marriage is absolutely void, or does such failure render the marriage voidable, as court approval could be conferred after the marriage?"
During the guardianship proceeding at issue, apparently the original court had not specifically addressed the right to marry. In light of that fact, in its ruling on August 31, 2017, the Florida Supreme Court answered a slightly different issue, because it viewed the "right to marry" as being tied to the "right to contract," which had been expressly removed from the ward.
The Florida Supreme Court ruled that "where the right to contract has been removed [under Florida guardianship law], the ward is not required to obtain court approval prior to exercising the right to marry, but court approval is necessary before such a marriage can be given legal effect."
Counsel representing the wife of the incapacitated "husband," argued that, in effect, such ratification had already happened, during a proceeding where the guardianship judge had made comments treating the marriage as "fact." The Supreme Court disagreed:
Although the invalid marriage between Glenda and Alan is capable of ratification under [Florida law], it is unlikely that the Legislature intended for “court approval” to consist merely of acknowledging the existence of a marriage certificate and commenting on the alleged marriage, without issuing an order ratifying the marriage or conducting a hearing to verify that the ward understands the marriage contract, desires the marriage, and that the relationship is not exploitative. Therefore, we conclude the guardianship court's statements here were not sufficient to approve the marriage. However, the parties are not foreclosed from seeking court approval based on our decision today.
The ward in the Smith case was not alleged to be older or elderly; rather, the determination of his lack of legal capacity followed a head injury in a car accident. Recognizing the larger implications about validity of a marriage occurring during a guardianship, however, the Real Property Probate Section and the Elder Law Section of the Florida Bar and the Florida chapter of the National Association of Elder Law Attorneys submitted amicus briefs, arguing generally in favor of a ward's right to marry and urging the Supreme Court to approve post-marriage ratification by the guardianship court.
Thursday, September 14, 2017
How well-prepared are you for financing your retirement? Do you know your family's finances? The New York Times examined the situations that may be faced by women who are older who are not involved in the handling of their family's finances. Helping Women Over 50 Face Their Financial Fears covers a lecture series, Women and Wills, designed specifically for women over 50 that cover a variety of topics, including estate planning. health care, insurance, long term care, business succession planning and more. The founders are well aware that some women may not be up to speed on their family's finances, or other circumstances such as a spouse's illness, may present challenges for them. The founders plan to take their lecture series on the road, nationwide, and publish a book on the importance of planning.
Thanks to Professor Naomi Cahn for sending a link to the article.
Thursday, July 27, 2017
The inheritance system is beset by formalism. Probate courts reject wills on technicalities and refuse to correct obvious drafting mistakes by testators. These doctrines lead to donative errors, or outcomes that are not in line with the decedent’s donative intent. While scholars and reformers have critiqued the intent-defeating effects of formalism in the past, none have examined the resulting distribution of donative errors and connected it to broader social and economic inequalities. Drawing on egalitarian theories of distributive justice, this Article develops a novel critique of formalism in the inheritance law context. The central normative claim is that formalistic wills doctrines should be reformed because they create unjustified inequalities in the distribution of donative errors. In other words, probate formalism harms those who attempt to engage in estate planning without specialized legal knowledge or the economic resources to hire an attorney. By highlighting these distributive concerns, this Article reorients inheritance law scholarship to the needs of the middle class and crystallizes distributive arguments for reformers of the probate system.
When I teach Wills, Trusts & Estates, I always include a few of the latest news articles or case reports that focus on LegalZoom or other, less high-profile on-line document drafting venues that are used directly by consumers. Alex's article examines the implications of formalism for this important reality. Thanks, Alex!
Wednesday, June 14, 2017
Kiplinger has a nifty quiz for you to test your knowledge about estate planning. The quiz, What Do You Know about Wills and Trusts? Test Your Estate-Planning Smarts consists of 10 multiple choice questions with explanations once you have answered a specific question. Take the quiz - it only takes about 5 minutes. Your results are instantaneous and you can compare your knowledge against the rest of us (the average is 7 correct answers out of 10). If you teach Trusts & Estates, this would be a good exercise to give during the first class!
Monday, June 12, 2017
Parts of the Department of Labor Fiduciary Rule is finally in effect, but whether the rule with stay or be repealed remains to be seen. Investments News ran a recent article, DOL fiduciary rule takes effect, but more uncertainty lies ahead. The article explains that "[t]wo provisions of the measure, which requires financial advisers to act in the best interests of their clients in retirement accounts, become applicable [June 9th]. One expands the definition of who is a fiduciary, and the other establishes impartial conduct standards." According to the article, the entire rule is scheduled to go into effect January 1, 2018, but that may be delayed since the agency is undertaking regulatory reviews as part of the mandate from the administration. As far as the 2 regs in effect, the article explains that those "will govern adviser interactions with clients in retirement accounts. Under those provisions, advisers must give advice that is in the best interests of their clients, charge reasonable compensation and avoid "misleading statements" about investment transactions and what they're being paid." There is a grace period until July 1, 2018 regarding advice being given to clients, as long as the "fiduciaries who are working diligently and in good faith to comply with the fiduciary duty rule."
The article also mentions that the SEC has asked for comments regarding fiduciary duty.
Tuesday, January 10, 2017
In late December 2016, the Oregon Supreme Court ruled that state efforts to use Medicaid Estate Recovery regulations to reach assets transferred between spouses prior to application were improper. In Nay v. Department of Human Services, __ P.3d ___, 360 Or. 668, 2016 WL 7321752, (Dec. 15, 2016), the Supreme Court affirmed in part and vacated in part the ruling of the state's intermediate appellate court (discussed here in our Blog in 2014). The high court concluded:
Because “estate” is defined to include any property interest that a Medicaid recipient held at the time of death, the department asserted that the Medicaid recipient had a property interest that would reach those transfers. In doing so, it relied on four sources: the presumption of common ownership in a marital dissolution, the right of a spouse to claim an elective share under probate law, the ability to avoid a transfer made without adequate consideration, and the ability to avoid a transfer made with intent to hinder or prevent estate recovery. In all instances, the rule amendments departed from the legal standards expressed or implied in those sources of law. Accordingly, the rule amendments exceeded the department's statutory authority under ORS 183.400(4)(b). The Court of Appeals correctly held the rule amendments to be invalid.
Our thanks to Elder Law Attorney Tim Nay for keeping us up to date on this case. His firm's Blog further reports on the effects of the final ruling in Oregon:
"Estate recovery claims that were held pending the outcome of the Nay case can now be finalized, denying the claim to the extent it seeks recovery against assets that the Medicaid recipient did not have a legal ownership interest in at the time of death. Estate recovery claims that were settled during the pendency of Nay contained a provision that the settlement agreement was binding on all parties to the agreement no matter the outcome in Nay and thus cannot be revisited."
January 10, 2017 in Estates and Trusts, Ethical Issues, Federal Statutes/Regulations, Health Care/Long Term Care, Medicaid, Property Management, State Cases, State Statutes/Regulations | Permalink | Comments (0)
Thursday, December 8, 2016
The Senate passed the 21st Century Cures Act, HR 34, on December 7, 2016. Having already passed the House, the bill goes to the President for signature. There are two specific provisions in the Cures Act that bear mention:
The Special Needs Trust Fairness Act in section 5007, which allows a beneficiary with capacity to establish her own first-party SNT (finally) and Section 14017 which deals with capacity of Veterans to manage money.
Section 5007 provides:
SEC. 5007. Fairness in Medicaid supplemental needs trusts.
(a) In general.—Section 1917(d)(4)(A) of the Social Security Act (42 U.S.C. 1396p(d)(4)(A)) is amended by inserting “the individual,” after “for the benefit of such individual by”.
(b) Effective date.—The amendment made by subsection (a) shall apply to trusts established on or after the date of the enactment of this Act.
Section 14017 amends 38 USC chapter 55 by adding new section 5501A "Beneficiaries’ rights in mental competence determinations"
“The Secretary may not make an adverse determination concerning the mental capacity of a beneficiary to manage monetary benefits paid to or for the beneficiary by the Secretary under this title unless such beneficiary has been provided all of the following, subject to the procedures and timelines prescribed by the Secretary for determinations of incompetency:
“(1) Notice of the proposed adverse determination and the supporting evidence.
“(2) An opportunity to request a hearing.
“(3) An opportunity to present evidence, including an opinion from a medical professional or other person, on the capacity of the beneficiary to manage monetary benefits paid to or for the beneficiary by the Secretary under this title.
“(4) An opportunity to be represented at no expense to the Government (including by counsel) at any such hearing and to bring a medical professional or other person to provide relevant testimony at any such hearing.”.
The effective date for the VA amendment is for "determinations made by the Secretary of Veterans Affairs on or after the date of the enactment...."
The President is expected to sign the bill soon. More to follow.
December 8, 2016 in Consumer Information, Current Affairs, Elder Abuse/Guardianship/Conservatorship, Estates and Trusts, Federal Statutes/Regulations, Health Care/Long Term Care, Medicaid, Property Management, Veterans | Permalink | Comments (0)
Friday, October 21, 2016
LeadingAge, the trade association that represents nonprofit providers of senior services, begins its annual meeting at the end of October. This year's theme is "Be the Difference," a call for changing the conversation about aging. I won't be able to attend this year and I'm sorry that is true, as I am always impressed with the line-up of topics and the window the conference provides for academics into industry perspectives on common concerns. For example, this year's line up of workshops and topics includes:
- General sessions featuring Pulitzer Prize winning journalist Charles Duhigg on the "The Science of Productivity," 2013 MacArthur Fellow and psychologist Angela Duckworth on the the importance of grit and perservance for successful leadership, and famed neurosurgeon and speaker Sanjay Gupta on "Medicine and the Media."
- Hundreds of sessions, organized by "interest groups":
October 21, 2016 in Advance Directives/End-of-Life, Consumer Information, Current Affairs, Dementia/Alzheimer’s, Discrimination, Elder Abuse/Guardianship/Conservatorship, Ethical Issues, Federal Statutes/Regulations, Health Care/Long Term Care, Housing, International, Legal Practice/Practice Management, Medicaid, Medicare, Programs/CLEs, Property Management, Retirement, Science, Social Security, State Cases, State Statutes/Regulations, Veterans | Permalink | Comments (2)
Wednesday, September 28, 2016
I often talk with law students and practicing attorneys about the $64,000 question in representation of older clients. The question is "who is your client?" It is all too easy with a disabled or elderly client for the lawyer to start taking directions from younger family members -- or even confusing the younger family member's legal issues with the reasons for representation of the older client. The "family" is generally not the answer to "who is your client?," even if you represent more than one family member. From the Pennsylvania Board of Discipline of the Pennsylvania Supreme Court we see another hard lesson involving professional responsibilities to communicate with and represent individual clients honestly:
By order dated July 14, 2016, attorney Terry Elizabeth Silva of Delaware County was suspended by the Supreme Court based on her handling of the proceeds of a lawsuit. Silva refused to disburse the funds received, asserting a charging lien on the recovery to which the Disciplinary Board determined she was not entitled.
Silva represented an 82-year-old woman in a slip and fall case. The woman’s son accompanied her to all meetings and conducted many of the communications with Silva on his mother’s behalf. The fee agreement provided for Silva to receive a contingent fee of 33 1/3%.
The case was settled, and Silva’s staff deposited the check into her operating account. A month later her office delivered a check for one third of the proceeds to the client’s daughter. Silva withheld a third of the check for her advanced expenses and a Medicare lien of less than $1,000.
While still holding the remaining third of the proceeds, Silva wrote several checks which reduced the balance in the account to $1,852. She made no further distribution over the following two and a half years, until the client filed a complaint with the Office of Disciplinary Counsel and a claim with the Lawyers Fund for Client Security. Silva defended those complaints with a claim she was entitled to a charging lien on the proceeds, based on her representation of the son and his wife in an unrelated matter. She also claimed that the mother authorized the use of the proceeds to pay debts of the son.
The Disciplinary Board rejected the attorney's arguments about why she could assert a "charging lien" against the mother's settlement for legal fees allegedly owed to her by the son. "All in the same family" was not a valid theory. Different accounts for different clients. While the original sanction proposed was a one-year suspension for the attorney, after hearing additional concerns about the lawyer, including the "lack of remorse and continued denials of wrongdoing," the Disciplinary Board recommended a three-year suspension from practice -- and the Pennsylvania Supreme Court approved that longer sanction. The $64,000 question just got a whole lot more expensive for that lawyer.
My thanks to Dickinson Law ethics guru Laurel Terry for spotlighting this disciplinary matter for us.