The Pros and Cons of Guardianships for Parents of Impaired Adults

guardianship of elderly parentGuardianship offers additional options, but is hard to obtain, for a very good reason.

When we think of legal guardianship or conservatorship, several types of situations typically come to mind. We imagine instances involving a minor child whose parents may have died young, an elderly parent with dementia, or an adult who has been severely injured and can no longer take care of himself.

But a new category is evolving: an adult child whose decisions are impaired. This category has made headlines in recent years thanks to celebrities such as Britney Spears, whose father has been her court-appointed conservator since 2008. Spears records albums, performs worldwide, and is one of the most recognizable celebrities in America. Yet while she is under conservatorship, she does not have the right to make financial or legal decisions.

When a person is put under guardianship or conservatorship (the specific term used varies by state), that court-appointed fiduciary has the legal right to overrule the decisions the ward makes. The court-appointed fiduciary must report to the court and in certain circumstances, such as ordering antipsychotic medication, must prove to the court that the decisions are necessary.

It’s tricky to determine when it makes sense to appoint a guardian for a young adult whose decision-making is impaired. Many young adults make bad, and sometimes unsafe, decisions. These often involve alcohol or drug addictions. Even so, the key question is whether that is enough to justify taking away their personal liberties and overruling their rights.

Proceedings can divide families

An adversarial protective proceeding is fraught with emotional and legal peril, and the decision to seek a guardianship often divides families. Some family members may think a guardianship is the only alternative, while others might believe it is a mistake. The uncertain outcome of a proceeding complicates the situation. If the adult child “wins” and retains competence, then family relations can break down and any trust or confidence between the parent and adult child can evaporate.

It is noteworthy that in many states the protective proceedings of guardianship or conservatorship can be voluntary—the person involved can agree to have a legal guardian or conservator appointed. A distinct advantage to this type of protective proceeding is that it does not have to be adversarial. Twice in my practice, I have seen a person enter into a voluntary protective proceeding and then have that protection end in a few years, after which the person again took charge of his own legal and financial decisions. But voluntary guardianship isn’t always an option.

It is (and should be) difficult to put adults under guardianship or conservatorship against their will. Courts must tread slowly and carefully on this slippery slope. To complicate matters, many states define competence for legal purposes differently from competence for medical purposes. In all states, however, those seeking to place someone under involuntary guardianship or conservatorship must first produce ample medical evidence to support this course of action.

The person being put under guardianship or conservatorship receives advance notice of the court proceeding and has the right to object to it. Court proceedings, which are public, can take time and can be costly due to legal fees and related bills. If the proceedings involve finances, the court-appointed fiduciary must also file annual accountings.

Other Options

A less severe option, and an important first step for many, is putting in place the basic estate planning documents—durable power of attorney (for financial purposes) and health care proxy (for medical purposes). These documents are important because they start the process of providing another person with the legal authority to act. One advantage of these documents is that they exist outside the court system. Therefore, any financial actions taken by the attorney-in-fact under the durable power of attorney or health care actions taken by the health care proxy are private.

These documents are also important for parents who wish to view the medical or financial records of their adult children. Once young adults reach the age of majority (age 18 or 21 depending on which state they live in), no one has the right to access their records without a Health Insurance Portability and Accountability Act (HIPAA) release. But a durable power of attorney and health care proxy can be used to waive HIPAA privacy rights. In most states, adults have the right in a durable power of attorney to designate whom they would name as their guardian/conservator if protective proceedings commence. The person nominated as a fiduciary has the right to be present in a protective court proceeding, if such a proceeding commences.

For many of our clients, dealing with an adult child who has a significant mental health or addiction issue can be a considerable challenge. In addition to the traditional paths of medical and psychiatric care, the appropriate legal options also should be explored. At a minimum, for any child at the age of majority, a health care proxy and a durable power of attorney should be executed. For more extreme situations, the legal protective proceedings of guardianship or conservatorship may be an answer. To fully explore the available courses of action, clients should consult an estate-planning or disability-planning attorney, a physician, and a psychiatrist.

 

Patricia Annino is a sought after speaker and nationally recognized authority on women and estate planning. She educates and empowers women to value themselves and their contributions in order to ACCOMPLISH GREAT THINGS in the world – and in so doing PROTECT THEMSELVES, those they love, and the organizations they care about. Annino recently released her new book, “It’s More Than Money, Protect Your Legacy” available at Amazon.com. To download Annino’s FREE eBook, Estate Planning 101 visit, http://www.patriciaannino.com.

Harper Lee’s Condition Debated by Friends, Fans and Now State of Alabama

By SERGE F. KOVALESKI, ALEXANDRA ALTER and JENNIFER CROSSLEY HOWARD

MONROEVILLE, Ala. — The doubts arose almost immediately when HarperCollins announced last month that it caregiver for elderlywould release a rediscovered book by Harper Lee: Did Ms. Lee — 88, publicity-shy and famously resistant to producing a follow-up to her masterpiece, “To Kill a Mockingbird” — really want to publish a second novel that she wrote and set aside more than a half-century ago?

Weeks later, that question remains a matter of passionate debate. Despite reassurances from her publisher, lawyer and literary agent that Ms. Lee has enthusiastically endorsed the publication, the controversy over the new book, “Go Set a Watchman,” has divided some residents of her hometown here, as well as longtime friends who live elsewhere. One faction argues that Ms. Lee’s mental health is too shaky for her to have knowingly authorized the new book, while the other just as vigorously affirms her competence.

Now the State of Alabama has been drawn into the debate. Responding to at least one complaint of potential elder abuse related to the publication of “Watchman,” investigators interviewed Ms. Lee last month at the assisted living facility where she resides. They have also interviewed employees at the facility, called the Meadows, as well as several friends and acquaintances.

It remains unclear what, if anything, will come out of the investigation, now more than a month old. One person informed of the substance of the interviews, who did not want to speak for attribution because the inquiry was ongoing, said Ms. Lee appeared capable of understanding questions and provided cogent answers to investigators.

The fact that the state has undertaken an inquiry highlights the scrutiny that Ms. Lee’s publisher and lawyer are facing as they prepare to release one of the most hotly anticipated titles in decades. And the spectacle of a very public debate about Ms. Lee’s mental condition and true intentions has added an operatic blemish to what should have been a triumphant moment for HarperCollins and the millions of fans who have clamored for decades for Ms. Lee to produce another book.

A lot is at stake, including the legacy of one of the country’s most beloved authors. Many wonder whether “Watchman,” which was rejected by a publisher in the mid-1950s and then rewritten as “Mockingbird,” will turn out to be a flawed, amateur work when it is released in July, and a disappointing coda to a career that has been defined by one outsize hit.

With an investigation involving Monroeville’s most famous resident underway, friends and acquaintances who have come forward in recent weeks have offered conflicting accounts of Ms. Lee’s mental state, with some describing her as engaging, lively and sharp, and others painting her as childlike, ornery, depressed and often confused. Several people said that her condition varied depending on the day.

Ms. Lee — known to many as Nelle, her legal first name — had a stroke in 2007 and has severe hearing and vision problems. But friends who visit her regularly say she can communicate well and hold lengthy conversations if visitors yell in her ear or write questions down for her to read under a special machine. (A black marker is kept in her room for this purpose.)

Philip Sanchez, a lawyer who was a pallbearer at the funeral for Ms. Lee’s older sister, Alice, last year, and visits Ms. Lee regularly, said he is not prepared to judge whether Ms. Lee is capable of consenting to publish the book. “It’s a call only God or a doctor can make,” he said. “I am more concerned that Nelle is content than the discussion of her cognizance.”

Wayne Flynt, the Alabama historian and a friend of Ms. Lee, said the author is mentally fit, engaged and can recite long passages of literature. When he visited her a few weeks ago after hearing reports that she was depressed, they spoke about his grandson and she laughed at the stories he told. He said he believed Ms. Lee was capable of assenting to the publication of “Watchman.”

But he also said she occasionally has problems with her short-term memory. When he asked her about her new novel, he said she seemed to be “in her own world” at first, and asked, “What novel?” Reminding her of “Watchman,” he told her “You must be so proud,” and she responded with “I’m not so sure anymore,” Mr. Flynt recalled.

The only statements from Ms. Lee about the new publication — affirming her enthusiasm — have come through her lawyer, Tonja B. Carter, who handles her day-to-day affairs. Ms. Carter came across the manuscript in August and negotiated the book deal with HarperCollins. Over the course of a week, Ms. Carter did not return a phone call and text messages seeking comment. A lawyer for Ms. Carter, Bobby Segall, declined to comment. In a previous interview with The New York Times, she described Ms. Lee’s excitement that “Go Set a Watchman” would be published, and stressed she would never go against the author’s wishes.

One person who said that he had filed an anonymous complaint with the state is a doctor who has known Ms. Lee for years. The doctor said in an interview that he had called Alabama’s adult protective services hotline and asked the state to investigate whether Ms. Lee was too infirm to have fully consented to the publication of “Watchman.”

The doctor, who has not treated Ms. Lee and asked to remain anonymous because of the divisive nature of the issue, said he had been alarmed by reports of her frailty and by an account from someone he trusted who visited Ms. Lee last fall after the death of her sister, and said she was largely uncommunicative, lying in a fetal position in bed in the middle of the afternoon.

The investigation is being led by the state’s Human Resources Department with the help of the Alabama Securities Commission, which among other things, works to prevent financial fraud against the elderly. Barry Spear, a spokesman for the Human Resources Department, said he could not comment on any investigation, noting that such inquiries are confidential. But he said investigations into elder abuse are done at the discretion of the department, based on an initial assessment of a complaint, and they can involve law enforcement if there is evidence of financial exploitation.

Caseworkers generally talk to people who may be victims to evaluate their physical, mental and emotional state, and they interview doctors, family members, caretakers and friends, Mr. Spear said.

In some cases, an investigation may involve subpoenaing financial and other records. Among the records that may be available are cognitive assessments of Ms. Lee by the staff of the Meadows. The facility agreed to make such monthly assessments on each resident as part of a settlement of a 2014 review by inspectors of the Alabama Department of Public Health.

Several of Ms. Lee’s friends and two of her caretakers said that they had been interviewed by investigators. Marcella Harrington, an aide paid by Ms. Lee’s lawyer to sit with her regularly, said in an interview that investigators had asked her if Ms. Lee could recognize friends and if she was receiving proper care. Ms. Harrington said she told them that Ms. Lee is lucid and aware of the book. Asked by a reporter whether Ms. Lee was mentally alert, Ms. Harrington said, “As far as I know, she is.”

Others who met with investigators painted a different picture of Ms. Lee’s condition. The writer Marja Mills, who lived next to the Lee sisters in Monroeville for about 18 months beginning in the fall of 2004 and wrote a book about the experience, “The Mockingbird Next Door: Life With Harper Lee,” recently met with investigators. She shared excerpts from a transcript of what she said was a recorded conversation she had in 2010 with Alice, who died in November at 103. In the conversation, recorded with Alice’s consent, Alice described her sister as having serious memory lapses during discussions about her personal affairs, Ms. Mills said.

“She doesn’t know from one minute to the other what she’s told anybody,” Alice said of her sister, according to those excerpts. “She’s surprised at anything that she hears because she doesn’t remember anything that’s ever been said about it.”

Ms. Lee’s publisher and literary agent have dismissed suggestions that she is too mentally infirm to consent to publishing “Watchman.”

Michael Morrison, the president and publisher of HarperCollins, said he and Jonathan Burnham, the senior vice president and publisher of Harper, visited Ms. Lee over two days in February, the week after the new book was announced. “She was in great spirits, and we talked about how much we love ‘Go Set a Watchman’ and the details of the publication,” Mr. Morrison said in a statement to The Times. “It was a great meeting, and as expected, she was humorous, intelligent and gracious.”

Through a HarperCollins spokeswoman, Mr. Morrison said the company was aware of the state’s inquiry but had not been contacted by investigators.

Andrew Nurnberg, the agent handling international rights for “Watchman,” has brushed off reports that Ms. Lee is somehow being taken advantage of as “nonsense.”

But skeptics point to a different picture of Ms. Lee that emerged in a 2013 lawsuit she filed against her former literary agent, in which she said he had “engaged in a scheme to dupe” her by hiding royalty payments and appropriating the copyright to “Mockingbird.” In the lawsuit, which was confidentially settled, she was portrayed by one of her lawyers as infirm and vulnerable to those she trusts.

As the debate over Ms. Lee’s condition continues, amplified by the investigation, what was once a source of pride in this small town is now a flash point, with much of the animosity settling on Ms. Carter. Some residents of Monroeville, a town of about 6,300, seem resentful of her, calling her aggressive and needlessly protective of her client in ways that have isolated Ms. Lee from some longtime friends.

Others say Ms. Carter is a dutiful steward of Ms. Lee’s affairs and have noted that Alice Lee had retained Ms. Carter as the lawyer on her will.

“Ms. Carter has been with the Lee sisters for many, many years, and she is a first-rate lawyer,” Greg Norris, a probate judge and president of the Monroe County Commission, said.

Mr. Norris worries that the fractious debate over the new book could erode Monroeville’s literary legacy.

“I just don’t know why people would be so negative,” he said. “We are a poor rural county and this new book puts us on the map again.”

Serge F. Kovaleski reported from Monroeville, Ala., and Jennifer Crossley Howard reported from Decatur, Ala. Susan Beachy, Elisa Cho and Alain Delaqueriere contributed research.

Source: NY Times http://www.nytimes.com/2015/03/12/arts/artsspecial/harper-lees-ability-to-consent-to-new-book-continues-to-be-questioned.html?_r=1#story-continues-1

 

Patricia Annino is a sought after speaker and nationally recognized authority on women and estate planning. She educates and empowers women to value themselves and their contributions in order to ACCOMPLISH GREAT THINGS in the world – and in so doing PROTECT THEMSELVES, those they love, and the organizations they care about. Annino recently released her new book, “It’s More Than Money, Protect Your Legacy” available at Amazon.com. To download Annino’s FREE eBook, Estate Planning 101 visit, http://www.patriciaannino.com.

Is Harper Lee competent to OK ‘Mockingbird’ sequel?

By Serge F. Kovaleski, Alexandra Alter and Jennifer Crossley Howard

Happer Lee, HarperCollinsMONROEVILLE, Ala. — The doubts arose almost immediately when HarperCollins announced last month that it would release a rediscovered book by Harper Lee: Did Lee — 88, publicity-shy and famously resistant to producing a follow-up to her masterpiece, “To Kill a Mockingbird” — really want to publish a novel that she wrote and set aside more than a half-century ago?

Despite reassurances from her publisher, lawyer, and literary agent that Lee has enthusiastically endorsed the publication, the controversy over the new book, “Go Set a Watchman,” has divided some residents of her hometown here, as well as longtime friends who live elsewhere. One faction argues that Lee’s mental health is too shaky for her to have knowingly authorized the new book, while the other just as vigorously affirms her competence.

Now the state of Alabama has been drawn into the debate. Responding to at least one complaint of potential elder abuse related to the publication, investigators interviewed Lee last month at the assisted living facility where she resides. They have also interviewed employees at the facility, as well as several friends and acquaintances.

It remains unclear what, if anything, will come out of the investigation. One person informed of the substance of the interviews, who did not want to speak for attribution because the inquiry was ongoing, said Lee appeared capable of understanding questions and provided cogent answers.

That the state has undertaken an inquiry highlights the scrutiny that Lee’s publisher and lawyer are facing. And the spectacle of a very public debate about Lee’s mental condition and true intentions has added an operatic blemish to what should have been a triumphant moment for HarperCollins and Lee’s millions of fans.

Source: The Boston Globe for the New York Times

Patricia Annino is a sought after speaker and nationally recognized authority on women and estate planning. She educates and empowers women to value themselves and their contributions in order to ACCOMPLISH GREAT THINGS in the world – and in so doing PROTECT THEMSELVES, those they love, and the organizations they care about. Annino recently released her new book, “It’s More Than Money, Protect Your Legacy” available at Amazon.com. To download Annino’s FREE eBook, Estate Planning 101 visit, http://www.patriciaannino.com.

Creation of a Family Risk Management Policy Statement

risk management policyA solid family risk management policy contains the purpose, principle and procedure for implementation. The purpose of a family risk management policy may be to reduce the risk for family members, both individually and as a whole. Adherence to the policy would go far to protect the family’s human and financial assets and minimize potential liability. The principle of the policy may be to make clear that the responsibility is to identify the areas of high risk and to do whatever possible to mitigate that risk. The procedure of the policy may make it clear that each family member is expected to:
 

  • Achieve financial literacy with regard to his or her own wealth as well as the wealth of the family enterprise.
  • Draft and have both parties sign a pre-nuptial agreement.
  • Contact their insurance providers annually to review their insurance coverage to ensure that they are current and adequate.
  • Have in place basic estate planning documents: will, revocable trust, health care proxy, power of attorney for financial assets.
  • Participate in the development of an investment policy that is aligned with the family’s shared values.
  • Protect the family’s reputation by learning how each individual’s behavior, both positive and negative, can impact the family’s reputation.

 
A family risk management policy statement is dynamic. It should be reviewed and adjusted as the risks that families face evolve and change.

  • Life insurance is a solution and mitigates risk Pay particular attention to gift splitting and use of both exemptions

 
Summary: remember why insurance is an effective solution
 

  • Long term care insurance provides a system of care that accelerates care and makes the conversation easier

 
Long term care insurance preserves dignity, protects inheritances and allows for family harmony by relieving the caregiver spouse and children
 
Long term care insurance protects the income and assets in a second marriage

  • Life insurance can be implemented to utilize the exemption yet take the pressure off current gifting of assets into the hands of the next generation

 
Life insurance and gifting can be effective to utilize otherwise wasted spousal exemptions- look at Non US spouses, same sex marriages, non traditional relationships
 
Life insurance covers the traditional risks of liquidity and equalization.

 
Patricia Annino is a sought after speaker and nationally recognized authority on women and estate planning. She educates and empowers women to value themselves and their contributions in order to ACCOMPLISH GREAT THINGS in the world – and in so doing PROTECT THEMSELVES, those they love, and the organizations they care about. Annino recently released her new book, “It’s More Than Money, Protect Your Legacy” available at Amazon.com. To download Annino’s FREE eBook, Estate Planning 101 visit, http://www.patriciaannino.com.

Challenges to Advising Clients in Late-Life Marriages

prenuptial agreementLate-life marriages are complicated for a variety of reasons. Here’s what planners need to know.

Thanks in part to longer life spans, more elderly Americans are marrying and remarrying today than in the past. Marriages later in life bear unique burdens, and all parties need to understand how to protect themselves, their assets, and their families. To help, CPAs offering personal financial planning services (estate, retirement, investment, risk management/insurance, and tax planning) need to familiarize themselves with the issues involved.

Late-life marriages are complicated for a number of reasons. They can directly impact the inheritance of potential heirs. Remarriages also can affect a spouse’s right to alimony payments from a prior spouse, retirement benefits, Social Security benefits, health insurance, and the obligation to support a spouse’s medical care (even to the point of depleting assets and income).

A personal financial planner must first address whether he or she can provide advice to both spouses—or future spouses—in instances where their interests may conflict. This is especially true when one individual has more assets and/or income than the other. Next, planning questions need to be answered regarding whom the assets are intended to benefit. Is it the new spouse? Children from a prior marriage? Or does the client want them to be devoted to maintaining the couple’s current lifestyle?

More questions to ask
These questions lead to others that the CPA should address with the client. For example:

  • Should the budget be revised to include long-term care insurance? Medical costs? Costs of care at home?
  • Should income be blended or separate? Are assets combined or separate?
  • What about the primary residence? Whose name is it in? How is it to be disposed of at death? What if the couple divorce? What if one of them becomes ill? What if they purchase a new home together? What if one sells a home and moves into the other spouse’s home? If one spouse dies, what rights does the surviving spouse have?

When clients marry at later stages in life, it may be prudent for the client to consider a prenuptial agreement that addresses what will happen should the marriage terminate by death or by divorce. Because of the agreements’ potential impact on planning, CPAs should have at least a basic understanding of how the agreements work in order to help clients work with attorneys to ensure legal documents align with financial goals.

In a traditional prenuptial agreement, the parties should (1) each disclose their assets, liabilities, and income, (2) be represented by separate attorneys who apprise them of their rights, and (3) understand that the agreement should be fair and reasonable when entered into and fair and reasonable when the marriage terminates. However, there may be other special factors when at least one spouse is elderly.

Addressing medical care

For instance, it is extremely important for the prenuptial agreement to address the medical care of the spouse.

The “affirmative statement” clause can be helpful when drafting a prenuptial agreement for a spouse who is getting married later in life. The clause states that the parties agree that the income and assets of the spouse who needs the medical care must be used first before touching the other spouse’s assets and income. This clause in the prenuptial agreement can be helpful down the road when the family asks the healthy spouse why the assets and income are being depleted in that manner.

Clients also should consider the conflicts that could arise between the person who is making the health care decisions (who will very likely be the spouse) and the person or persons making the financial decisions (who could be one or several children). Problems ensue if the goals and objectives of these decision-makers are not aligned. For instance, planners may find themselves in a situation where the person making the health care decisions for the client decides at-home care is best. But the person making the financial decisions may not agree. The best way to avoid this is to think those conflicts through in the planning phase and coordinate the choice of fiduciaries (health care agent and attorney in fact under durable power of attorney) in the documents.

Remember: All estate planning is based on two components—the organizational component (what the documents say) and the operational components (how the plans are implemented). Each of these components is critical and either of them, if not thought through and updated, can thwart the best plans.

Patricia Annino is a sought after speaker and nationally recognized authority on women and estate planning. She educates and empowers women to value themselves and their contributions in order to ACCOMPLISH GREAT THINGS in the world – and in so doing PROTECT THEMSELVES, those they love, and the organizations they care about. Annino recently released her new book, “It’s More Than Money, Protect Your Legacy” available at Amazon.com. To download Annino’s FREE eBook, Estate Planning 101 visit, http://www.patriciaannino.com.

Casey Kasem’s wife served with guardianship papers

caregiver for the elderlyWhile the saga continues since Kasem’s recent death, the story is a common one for families around the world. Pre-planning is extremely important so that your wishes are met during difficult times later in life.

BREMERTON, Wash. (AP) — The wife of ailing radio personality Casey Kasem was served Friday with a California court order that temporarily suspends her powers to determine her husband’s medical care amid concerns about his health and welfare.

The order Kitsap County sheriff’s deputies said they delivered also expands daughter Kerri Kasem’s authority to determine whether her father, who’s now in Washington state, is receiving adequate medical care.

Wife Jean Kasem told KING-TV in an interview aired Friday evening that her husband is getting the best possible care and she is “not going to allow anybody to shred (her) family on unfounded facts and malicious accusations.”

“My husband is very happy and comfortable in our family and has told me time and time again that he wishes to remain under my care,” she said.

“Why is she trying to block a doctor from seeing my father?” Kerri Kasem asked in a statement Friday night, telling her stepmother, “If you truly love my father, you will do the right thing and allow him to get proper medical treatment.”

Kerri Kasem’s spokesman Danny Deraney said she has a special Washington state court order that allows her to see her father, but there was no timetable for when that will happen.

On Tuesday, Los Angeles Superior Court Judge Daniel S. Murphy ordered Jean Kasem to comply with court orders allowing doctors to evaluate her husband, and also allow his daughter Kerri to see him. He also ordered Jean Kasem to surrender her husband’s passport and temporarily suspended her powers to determine her husband’s medical care.

In mid-May, Murphy had expressed concerns about Kasem’s whereabouts and safety amid a dispute between his wife and children from another marriage.

The sheriff’s office in Kitsap County, west of Seattle, tracked him down the next day.

Sheriff’s Deputy Scott Wilson said officers who performed a welfare check May 13 on the 82-year-old Kasem found him staying at the home of long-time family friends. Jean Kasem says they are on a family vacation.

Kasem “appeared to be not in distress,” Wilson said Friday. “He couldn’t speak but he appeared to us to be cognizant of what was going on around him and who people were.”

The sheriff’s spokesman said medications were present and those at the home, including Jean Kasem, said appropriate medical care was being provided. Medical professionals, including doctors and visiting nurses, have been “attending him as required,” Wilson said.

Kerri Kasem’s court filings state her father is suffering from a form of dementia called Lewy Body Disease.

The sheriff’s spokesman noted that the officers who delivered the court order were “basically the messengers between the courts in California” and Kasem’s connections in Washington.

“We wouldn’t enforce anything until we were directed by the Washington court and coordinated with our prosecutor’s office,” Wilson said. “That hasn’t happened.”

Kasem gained fame with his radio music countdown shows, “American Top 40” and “Casey’s Top 40,” and he was the voice of Shaggy in the cartoon “Scooby Doo.”

Patricia Annino is a sought after speaker and nationally recognized authority on women and estate planning. She educates and empowers women to value themselves and their contributions in order to ACCOMPLISH GREAT THINGS in the world – and in so doing PROTECT THEMSELVES, those they love, and the organizations they care about. Annino recently released her new book, “It’s More Than Money, Protect Your Legacy” available at Amazon.com. To download Annino’s FREE eBook, Estate Planning 101 visit, http://www.patriciaannino.com.

The Pros and Cons of Guardianships for Parents of Impaired Adults

guardianship of elderly parentGuardianship offers additional options, but is hard to obtain, for a very good reason.

When we think of legal guardianship or conservatorship, several types of situations typically come to mind. We imagine instances involving a minor child whose parents may have died young, an elderly parent with dementia, or an adult who has been severely injured and can no longer take care of himself.

But a new category is evolving: an adult child whose decisions are impaired. This category has made headlines in recent years thanks to celebrities such as Britney Spears, whose father has been her court-appointed conservator since 2008. Spears records albums, performs worldwide, and is one of the most recognizable celebrities in America. Yet while she is under conservatorship, she does not have the right to make financial or legal decisions.

When a person is put under guardianship or conservatorship (the specific term used varies by state), that court-appointed fiduciary has the legal right to overrule the decisions the ward makes. The court-appointed fiduciary must report to the court and in certain circumstances, such as ordering antipsychotic medication, must prove to the court that the decisions are necessary.

It’s tricky to determine when it makes sense to appoint a guardian for a young adult whose decision-making is impaired. Many young adults make bad, and sometimes unsafe, decisions. These often involve alcohol or drug addictions. Even so, the key question is whether that is enough to justify taking away their personal liberties and overruling their rights.

Proceedings can divide families

An adversarial protective proceeding is fraught with emotional and legal peril, and the decision to seek a guardianship often divides families. Some family members may think a guardianship is the only alternative, while others might believe it is a mistake. The uncertain outcome of a proceeding complicates the situation. If the adult child “wins” and retains competence, then family relations can break down and any trust or confidence between the parent and adult child can evaporate.

It is noteworthy that in many states the protective proceedings of guardianship or conservatorship can be voluntary—the person involved can agree to have a legal guardian or conservator appointed. A distinct advantage to this type of protective proceeding is that it does not have to be adversarial. Twice in my practice, I have seen a person enter into a voluntary protective proceeding and then have that protection end in a few years, after which the person again took charge of his own legal and financial decisions. But voluntary guardianship isn’t always an option.

It is (and should be) difficult to put adults under guardianship or conservatorship against their will. Courts must tread slowly and carefully on this slippery slope. To complicate matters, many states define competence for legal purposes differently from competence for medical purposes. In all states, however, those seeking to place someone under involuntary guardianship or conservatorship must first produce ample medical evidence to support this course of action.

The person being put under guardianship or conservatorship receives advance notice of the court proceeding and has the right to object to it. Court proceedings, which are public, can take time and can be costly due to legal fees and related bills. If the proceedings involve finances, the court-appointed fiduciary must also file annual accountings.

Other options

A less severe option, and an important first step for many, is putting in place the basic estate planning documents—durable power of attorney (for financial purposes) and health care proxy (for medical purposes). These documents are important because they start the process of providing another person with the legal authority to act. One advantage of these documents is that they exist outside the court system. Therefore, any financial actions taken by the attorney-in-fact under the durable power of attorney or health care actions taken by the health care proxy are private.

These documents are also important for parents who wish to view the medical or financial records of their adult children. Once young adults reach the age of majority (age 18 or 21 depending on which state they live in), no one has the right to access their records without a Health Insurance Portability and Accountability Act (HIPAA) release. But a durable power of attorney and health care proxy can be used to waive HIPAA privacy rights. In most states, adults have the right in a durable power of attorney to designate whom they would name as their guardian/conservator if protective proceedings commence. The person nominated as a fiduciary has the right to be present in a protective court proceeding, if such a proceeding commences.

For many of our clients, dealing with an adult child who has a significant mental health or addiction issue can be a considerable challenge. In addition to the traditional paths of medical and psychiatric care, the appropriate legal options also should be explored. At a minimum, for any child at the age of majority, a health care proxy and a durable power of attorney should be executed. For more extreme situations, the legal protective proceedings of guardianship or conservatorship may be an answer. To fully explore the available courses of action, clients should consult an estate-planning or disability-planning attorney, a physician, and a psychiatrist.

Patricia Annino is a sought after speaker and nationally recognized authority on women and estate planning.  She educates and empowers women to value themselves and their contributions in order to ACCOMPLISH GREAT THINGS in the world – and in so doing PROTECT THEMSELVES, those they love, and the organizations they care about.  Annino recently released an updated version of her successful book, Women and Money: A Practical Guide to Estate Planning to include recent changes in the laws that govern how we protect our assets during and beyond our lifetime.  To download Annino’s FREE eBook, Estate Planning 101 visit, http://www.patriciaannino.com.

But Mom and Dad Promised Me Their Entire Estate…Or At Least Their Home: A discussion of quantum meruit claims by the caregiver child

caregiver for parents imageThe client in your office explains, “I gave up my job to take care of my parents, I moved in with them, and did everything that was expected – and more – for three entire years.  I took them to every doctor’s appointment, made sure that they had food, took their medicine on time, and ate three meals a day.  My brothers, however, called them about four times a year.  My parents promised me that I would be compensated at their death for what I did. They told me they did not want to use their current money because they were terrified that they would run out of money. I know their will says that my siblings and I will receive their equal shares, but I know that is not what they meant. I was promised the house for what I did.”

The legal theory behind whether or not this client should receive the house is called “quantum meruit” or unjust enrichment. There has been an increase in quantum meruit cases in this country precisely because of this type of fact pattern – the legal estate planning documents are not changed or updated yet the caregiver child believes that without this payment his parents would have been unjustly enriched and that what the caregiver child receives from the decedent’s assets through the estate is unfair.

Siblings may take the position that they were unaware of any contract or promise the parents made to the caretaker child, that they were unable to care for the parents themselves because of their own family commitments, that it was admirable what the caretaker child did, but that mom and dad loved all children equally, and if they had really wanted the caretaker child to receive more, they would have changed their estate plan.

Quantum meruit cases have been played out in this country’s courtrooms since the 1800s. They have been brought by family members (children, nieces, nephews, and siblings), by non-family caregivers, and by caregiving partners in non-traditional relationships.

The quantum meruit standard varies from state to state. In New York, for example, to state a claim for unjust enrichment the plaintiff must allege, 1) the defendant was enriched, 2) the enrichment was at the plaintiff’s expense, and 3) the circumstances were such that equity and good conscience require the defendants to make restitution.

Texas courts have ruled that to recover under the doctrine of quantum meruit a plaintiff must establish that, 1) valuable services and/or materials were furnished, 2) to a party sought to be charged, 3) which were accepted by the party sought to be charged, and 4) under such circumstances as reasonable notified the recipient that the plaintiff, in performing expected to be paid by the recipient. (Heidenfeis Bros. v City of Corpus Christi, 832 S.W.2d 39, 41 (Tex. 1992).

Quantum meruit cases have tax considerations too.  In 1994, Anthony Olivo, a New Jersey tax lawyer, left his law practice to care for his elderly parents in their home. His father died in 1995 and Olivo continued to care for his mother. In 1998, his sisters became upset with the care he was providing.  They claimed that all he did during the day was watch TV, he was not paying for room and board, and his mother had a full-time, paid live-in aide. He discussed this with his mother and she offered to pay him $1,000 a week for caregiving. Since he was concerned about her finances he agreed to be paid $400 a day and payment deferred until her death. This was an oral, not written agreement.

When his mother died in 2003, he was named administrator of her estate. On the estate tax return he claimed $44,200 for his services in that capacity, $50,000 for his services as lawyer for the estate, $5,000 for accountant’s fees, and $1,240,000 as a debt owed to him for the care he provided his mother pursuant to their 1998 verbal agreement. The Internal Revenue Service denied these deductions. At the 2011 trial in New Jersey Tax Court, Olivo testified that he “could have and should have” memorialized the agreement in writing, but was too distracted by his caregiving duties to think like a lawyer at the time.” The court held that because there were no witnesses or corroborating evidence, the estate failed to establish the existence of a legal debt. The court rejected Olivo’s quantum meruit claim, stating that under New Jersey law, services to a family member living in the same household are presumed to be gratuitous, unless shown otherwise by a preponderance of the evidence. The court noted “children do provide gratuitous care for their aging parents.”

In cases like these, it is important to make the expectations clear as early possible in the caregiving arrangement and consider the following:

  1. Put any caregiving agreement in writing.
  2. Tell other family members that this agreement exists.
  3. Keep a written record or log of the hours and tasks the caregiver is putting in.
  4. Establish an hourly or daily rate that is reasonable –it may be prudent to compare that compensation to what the marketplace bears.
  5. Execute a personal care agreement that will set forth the expectations of the engagement and the payment – even if this is within the family.
  6. Adjust the estate planning documents to take the caregiving into account or as a mechanism to ask that the court honor any such personal care agreement. Many families may prefer the personal care agreement to the estate planning adjustment, as it is unclear how long the services will last and the agreement can set forth the method of pay and allow for termination of the services by either party.
  7. Coordinate the income tax consequences. If it is compensation, then to be deductible it should also be included as gross income for the caregiver.
  8. If a child or other family member is paying bills for the parent or taking care of expenses from his or her own assets, then both the state Medicaid laws and the courts will presume that these are gifts from the child to the parents. If that is not the intention then formal legal promissory notes should be entered into and kept current.

 

Patricia Annino is a sought after speaker and nationally recognized authority on women and estate planning.  She educates and empowers women to value themselves and their contributions in order to ACCOMPLISH GREAT THINGS in the world – and in so doing PROTECT THEMSELVES, those they love, and the organizations they care about.  Annino recently released an updated version of her successful book, Women and Money: A Practical Guide to Estate Planning to include recent changes in the laws that govern how we protect our assets during and beyond our lifetime.  To download Annino’s FREE eBook, Estate Planning 101 visit, http://www.patriciaannino.com.

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