Shirley B. Whitenack, Esq. May 1, 2013

Transcription

1 DEALING WITH INCAPACITY: GUARDIANSHIP, ELDER ABUSE AND ETHICS Shirley B. Whitenack, Esq. May 1, 2013

2 What is guardianship? Court-supervised surrogate decision-making for an individual who is mentally incapacitated

3 Different types of guardianship General or plenary Person and/or property Limited Temporary Emergency

4 Terminology differences Guardianship vs. Conservator States use different terminology for courtsupervision of person and property

5 Different definitions States employ different definitions of incapacity Legal definition vs. medical definition Legal definition vs. functional definition

6 Functional definition What a person can do and cannot do is more important than the name of the disease or illness

7 Capacity Involves the ability to understand and process information so that a decision can be made and communicated.

8 Elder Abuse Physical Sexual Emotional or psychological Neglect Financial

9 Elder Abuse Self-neglect or abuse Is the elderly person merely nonconforming or unable to self-govern?

10 Using guardianships to prevent or stop elder abuse Guardianship petitions can be used as sword or shield

11 Benefits May end abuse or undue influence May result in return of ward s assets May result in engagement of caregiving professionals May lead to settlement

12 More benefits May prevent tug of war among rivals May prevent ward from marrying unsuitable, abusive person May lock in testimony for subsequent will contest May prevent flip flop estate planning

13 Risks Petitioner may be target of scrutiny Petitioner may be surcharged Proceeding may be contested and costly. May be unnecessary infringement of privacy If no incapacity adjudication, petitioner may be disinherited

14 Ethical considerations RPC 1.14 client with diminished capacity RPC 1.6 Confidentiality ACTEC Commentaries on MRPC 1.14 and 1.6

15 Red flags Power struggle among family members, caregivers, neighbors Elderly person manipulates others through threats of changing estate planning Health aide assumes too much authority and power Repeated calls to APS or hospital visits due to lapses in care Substantial and improvident gifts

16 Representing petitioner File guardianship petition Consider asking for appointment of: geriatric care manager, psychologist, psychiatrist, etc. independent 3 rd party guardian temporary guardian Accounting

17 Representing petitioner Consider contacting APS Ombudsman for the elderly Prosecutor s office

18 Representing alleged abuser Determine whether allegations are false and raised to gain tactical advantage May need to warn client about necessary disclosures under RPC 1.6

19 Case Study Marion Cunningham is 72 years old. Her two adult children, Joanie and Richard, are estranged from and rarely communicate with each other. Mrs. Cunningham s husband, Howard, died two years ago. Joanie, who is divorced and unemployed for the past year, stepped in to take care of her mother. Joanie s name was placed on Mrs. Cunningham s accounts. Joanie assists Mrs. Cunningham wither finances. Joanie asked Mrs. Cunningham for monetary help so that Joanie could pay her own bills. Mrs. Cunningham told Joanie to take whatever she needed. Joanie took $100,000 from Mrs. Cunningham s bank account. Richard, who lives 1500 miles away from Mrs. Cunningham, calls his mother every Sunday afternoon and visits her once a year. During his last visit, Richard was astonished to see stacks of papers on the dining room table. The bathroom and kitchen were filthy. Richard asked Mrs. Cunningham about her finances. Mrs. Cunningham told Richard that she didn t know how much money she or where her checkbook or bank statements were but that Joanie knew where those items were and helped Mrs. Cunningham sign checks. Richard called Dr. Fonzarelli, Mrs. Cunningham s doctor. He told Richard that Mrs. Cunningham might be suffering from Alzheimer s disease. Richard called his parents attorney, Karen Lawyer, Esq., and asked her for assistance.

20 Take aways Learn your state s guardianship procedures Be guided by RPC 1.14 and RPC 1.6 Use guardianships to prevent or stop abuse

21 End of Session Thank you for attending the session today. Please take the time to conduct the Conference Evaluation that you will receive via .

22 Dealing with Incapacity: Guardianship, Elder Abuse and Ethics Shirley Berger Whitenack, ESQ. Schenck, Price, Smith & King, LLP 220 Park Avenue P.O. Box 991 Florham Park, NJ Country Club Plaza West 115 Century Road Paramus, New Jersey Telephone: (973) Telecopy: (973) website: Copyright 2013 All Rights Reserved 2013 NAELA Annual Conference May: 2-4 Page: 1

23 1. Introduction Although most attorneys today recognize the importance of estate planning developing vehicles to handle legal and family problems at death few lawyers advise their clients to engage in lifetime planning to deal with the serious legal and management problems that result from aging, illness or incapacity. The failure to plan for incapacity often takes an emotional toll on family members who often must turn to the courts to address issues that could have been resolved before the person became incapacitated with the appropriate planning documents in place. The primary goal in planning for incapacity is to avoid court imposed surrogate decision making. In the absence of planning for incapacity, the court may appoint individuals or entities to make financial, legal, medical and residential decision for the incapacitated person. The cost of a guardianship or conservatorship proceeding may well exceed the cost of planning and may result in the appointment of individuals or entities that the incapacitated person may not have chosen. Guardianship is a legal arrangement to provide court supervised surrogate decision making for an individual who is incapacitated and unable to manage his/her property, and/or person. As it is created and governed by state law, what is called a guardianship in one state may be called a conservatorship in another state. Depending on state law, a guardianship may be appropriate for a person who has developmental disabilities, an elderly person who can no longer manage his or her own affairs, a person who suffered a traumatic brain injury, a person suffering from mental illness or a person suffering from chronic alcohol or drug addiction. Additionally, subject to state law, a guardianship may confer upon the guardian the power to make all decisions on behalf of the incapacitated person or limited powers. A guardian may be appointed over the person s property or over the person for purposes of making health care decisions, or both. A court may appoint a temporary or emergency guardian pending a hearing on the appointment of a permanent guardian NAELA Annual Conference May: 2-4 Page: 2

24 It is important to note that guardianship may result in a deprivation of certain civil rights. The guardianship process usually begins when someone believes that an elderly person or a person with cognitive disabilities is mentally incapacitated. The alleged incapacitated person may not have implemented a personal or financial management system delegating others to act on his or her behalf in the event of incapacity. Alternatively, documents such as a general durable power of attorney, health care proxy and advance directive may have been executed but they may be defective. An important and necessary power may have been omitted from the document or the principal may have lacked the requisite capacity to understand and execute the documents. There may be allegations that the designated decision-maker has engaged in self-dealing, financial exploitation, undue influence, or physical, mental or emotional abuse. Then again, the abuser may not have been designated as a decision-maker. 2. Capacity Every guardianship attorney must know how capacity is defined under his or her state law. Guardianship attorneys also should recognize that the legal and medical communities tend to define the term capacity differently. It is fair to state, however, that capacity involves the ability to understand and process information, so that a decision can be made and communicated. New Jersey law defines an incapacitated individual as an individual who is impaired by reason of mental illness or mental deficiency to the extent that he lacks sufficient capacity to govern himself and manage his affairs. N.J. Stat. Ann. 3B:1-2. Colorado, which adopted the Uniform Guardianship and Protective Proceedings Act, defines an incapacitated adult as one who is unable to effectively receive or evaluate information or both or make or communicate decisions to such an extent that the individual lacks the ability to satisfy essential requirements for physical health, safety, or selfcare, even with appropriate and reasonably available technological assistance. C.R.S (5) NAELA Annual Conference May: 2-4 Page: 3

25 Colorado, like a number of other states, has adopted a functional approach in defining incapacity in which the individual s ability to process information and govern their personal affairs, rather than the diagnosis, is more important. 3. Elder Abuse Individuals who are frail and elderly often depend on their abusers to keep them out of nursing homes. The abuser may be a spouse, adult child, relatives, home health aides, neighbors and friends. Elders with diminished capacity often are susceptible to an abuser s tactics, such as isolation, intimidation and threats. Personal troubles of the abuser, such as alcohol or drug addiction, unemployment, financial difficulties or mental illness may result in abuse, especially if the abuser has been financially dependent on the elderly person. The elderly individual also may engage in self-abuse or self-neglect. The individual may not want to socialize, get medical treatment, or may not want to spend money on a home health aide or home repairs and maintenance. The elderly person may want to make substantial gifts to a home health aide, spend substantial sums on contests and sweepstakes or gamble with his or her funds. It is not always easy to discern whether the elderly person is nonconforming but otherwise competent or requires judicial intervention. 4. Using Guardianships to Prevent or Stop Elder Abuse Although a guardianship proceeding often is considered a last ditch measure to protect an alleged incapacitated person who is in need of assistance in making financial, legal, medical and other decisions, it can be and is used as a sword or a shield to gain an advantage over other interested parties as well as the alleged incapacitated person. What are the benefits and risks of filing a guardianship action to prevent or stop elder abuse? Benefits: 2013 NAELA Annual Conference May: 2-4 Page: 4

26 1. The proceeding may flush out and put an end to elder abuse or undue influence. 2. The proceeding may lead to the return of the ward s assets. 3. The proceeding may result in the engagement of professionals who can assist the caregiver and alleviate symptoms of caregiver burnout. 4. The appointment of a general guardian may prevent a vulnerable elder from marrying a person who will take advantage of the vulnerable elder.. 5. The appointment of a general guardian may prevent a tug of war among rivals who want to make decisions for the vulnerable elder. 6. The proceeding might lead to a settlement among interested parties who are vying for control. 7. Discovery in the guardianship action may lock in testimony of the alleged incapacitated person or others that would be beneficial in a subsequent will contest. 8. If the alleged incapacitated person is declared incapacitated and a general guardian is appointed, the ward may not be able to change her will. See, e.g., N.J.Stat. Ann., 3B:12-27; In re Estate of Bechtold, 150 N.J. Super. 550, 376 A.2d 211, (Ch. Div. 1977), aff d, 156 N.J. Super. 194 (App. Div. 1978). Risks: 1. There may be an unnecessary infringement of the alleged incapacitated person s privacy and civil rights. 2. The petitioner may be a target of scrutiny. Other interested parties, the alleged incapacitated person and the court-appointed attorney or guardian ad litem may claim that the petitioner mishandled the alleged incapacitated person s assets, especially if the petitioner was the only one who received gifts or received larger gifts, or will receive a larger share of the alleged 2013 NAELA Annual Conference May: 2-4 Page: 5

27 incapacitated person s estate, or the petitioner acted as attorney-in-fact for the alleged incapacitated person and received a benefit in so doing. Interested parties, the alleged incapacitated person and the court-appointed attorney may demand an accounting. a. An attorney-in-fact may have a fiduciary duty to the principal, and to the guardian of the property of the principal if the principal has been adjudicated an incapacitated person. The attorney-in-fact must act pursuant to the powers set forth in the power of attorney document and solely for the benefit of the principal. See, e.g., N.J. Stat.Ann.46:2B If the guardianship petitioner was an attorney-in-fact for the vulnerable adult and did not maintain careful records, the attorney-in-fact may be surcharged for assets than cannot be accounted for properly. See, e.g., N.J. Stat. Ann 46:2B-8.13b., which requires the attorney-in-fact to keep accurate books and records of all financial transactions. 4. If a general guardian is not appointed, the alleged incapacitated person may retain the power to change his or her estate plan and disinherit the petitioner. 5. The proceeding may be contested and costly. 5. Ethical Issues 1. MRPC Client with Diminished Capacity (a) When a client's capacity to make adequately considered decisions in connection with a representation is diminished, whether because of minority, mental impairment or for some other reason, the lawyer shall, as far as reasonably possible, maintain a normal client-lawyer relationship with the client. (b) When the lawyer reasonably believes that the client has diminished capacity, is at risk of substantial physical, financial or other harm unless action is taken and cannot adequately act in the client's own interest, the lawyer may take reasonably necessary protective action, including consulting with individuals or entities that have the ability to take action to protect the client and, in appropriate cases, seeking the appointment of a guardian ad litem, conservator or guardian. (c) Information relating to the representation of a client with diminished capacity is protected by Rule 1.6. When taking protective action pursuant to paragraph (b), the lawyer is impliedly 2013 NAELA Annual Conference May: 2-4 Page: 6

28 authorized under Rule 1.6(a) to reveal information about the client, but only to the extent reasonably necessary to protect the client's interests. 2. MRPC 1.6 Confidentiality of Information (a) A lawyer shall not reveal information relating to the representation of a client unless the client gives informed consent, the disclosure is impliedly authorized in order to carry out the representation or the disclosure is permitted by paragraph (b). (b) A lawyer may reveal information relating to the representation of a client to the extent the lawyer reasonably believes necessary: (1) to prevent reasonably certain death or substantial bodily harm; (2) to prevent the client from committing a crime or fraud that is reasonably certain to result in substantial injury to the financial interests or property of another and in furtherance of which the client has used or is using the lawyer's services; (3) to prevent, mitigate or rectify substantial injury to the financial interests or property of another that is reasonably certain to result or has resulted from the client's commission of a crime or fraud in furtherance of which the client has used the lawyer's services; (4) to secure legal advice about the lawyer's compliance with these Rules; (5) to establish a claim or defense on behalf of the lawyer in a controversy between the lawyer and the client, to establish a defense to a criminal charge or civil claim against the lawyer based upon conduct in which the client was involved, or to respond to allegations in any proceeding concerning the lawyer's representation of the client; (6) to comply with other law or a court order; or (7) to detect and resolve conflicts of interest arising from the lawyer s change of employment or from changes in the composition or ownership of a firm, but only if the revealed information would not compromise the attorney-client privilege or otherwise prejudice the client. (c) A lawyer shall make reasonable efforts to prevent the inadvertent or unauthorized disclosure of, or unauthorized access to, information relating to the representation of a client. Some states do not permit attorneys to file guardianship actions to have their clients declared incapacitated. On the other hand, Michigan s commentary to RPC 1.14 states [i]f the person has no guardian or legal representative, the lawyer often must act as de facto guardian. Practitioners who are asked to represent the alleged abuser in a guardianship action should note that some states do not permit attorneys to disclose their clients past crimes or past wrongful acts but require them to disclose ongoing crimes or wrongful acts. Practitioners should consult the commentaries to the model rules, their state s versions of RPC 1.14 and 1.6 and respective 2013 NAELA Annual Conference May: 2-4 Page: 7

29 commentaries, their state s abuse reporting laws and the ACTEC Commentaries on RPC 1.14 and 1.6 at 6. Red flags that may signal incapacity and abuse a. The alleged incapacitated person needs care and well-meaning outsiders such as neighbors or health aides are intervening, resulting in a power struggle. b. The elderly person manipulates family members or others by threatening to cut them out of his or her will or promises to leave certain family members or others a larger share if they accede to the desires of the alleged incapacitated person. c. A health aide is assuming more authority over the alleged incapacitated person and may be taking advantage of the vulnerable adult. d. The vulnerable adult is the subject of repeated calls to Adult Protective Services or is brought to the hospital emergency room on several occasions due to lapses in care. e. The person who is assisting the vulnerable adult with his or her finances refuses to disclose information to others based upon the alleged incapacitated person s instructions not to disclose such information to others. f. The vulnerable adult has been making substantial gifts or the donee states that the elder wanted him or her to receive the gift. 7. Assessing the possibility of financial abuse a. Has the plaintiff received any significant inter vivos gifts from the alleged incapacitated person? b. Is the plaintiff a fiduciary for the alleged incapacitated person, i.e., trustee or attorneyin-fact? 2013 NAELA Annual Conference May: 2-4 Page: 8

30 c. Did the plaintiff, as attorney-in-fact, make any gifts? If so, was he or she authorized by the instrument to do so? State law may require the Power of Attorney to contain an express provision authorizing gifts. d. Is the plaintiff a caregiver for the alleged incapacitated person? e. Will the plaintiff receive a larger inheritance than others in the same degree of kinship? 8. Representing the alleged abuser a. Warn your client that his or her questionable conduct may be revealed in the proceeding. b. Begin to amass evidence to negate or ameliorate the claims. Ask your client to be honest with you so that you are not blindsided. Determine whether the claims of abuse or undue influence are false and have been raised by another party to gain a tactical advantage. c. Review RPC 1.6 and abuse reporting requirements. 9. Representing the petitioner 1. File petition. 2. Consider requesting appointment of: a. a temporary guardian. b. a geriatric care manager. c. an independent third party as guardian. 3. Request an accounting. 4. Consider whether to contact the county prosecutor s office BUT that office may refrain from investigating during the pendency of a civil proceeding. 5. Consider calling Adult Protective Services or the Ombudsmen for the Elderly NAELA Annual Conference May: 2-4 Page: 9

31 Case Study Marion Cunningham is 72 years old. Her two adult children, Joanie and Richard, are estranged from and rarely communicate with each other. Mrs. Cunningham s husband, Howard, died two years ago. Joanie, who is divorced and unemployed for the past year, stepped in to take care of her mother. Joanie s name was placed on Mrs. Cunningham s accounts. Joanie assists Mrs. Cunningham wither finances. Joanie asked Mrs. Cunningham for monetary help so that Joanie could pay her own bills. Mrs. Cunningham told Joanie to take whatever she needed. Joanie took $100,000 from Mrs. Cunningham s bank account. Richard, who lives 1500 miles away from Mrs. Cunningham, calls his mother every Sunday afternoon and visits her once a year. During his last visit, Richard was astonished to see stacks of papers on the dining room table. The bathroom and kitchen were filthy. Richard asked Mrs. Cunningham about her finances. Mrs. Cunningham told Richard that she didn t know how much money she or where her checkbook or bank statements were but that Joanie knew where those items were and helped Mrs. Cunningham sign checks. Richard called Dr. Fonzarelli, Mrs. Cunningham s doctor, who told Richard that Mrs. Cunningham might be suffering from Alzheimer s disease. Richard called his parents attorney, Karen Lawyer, Esq., and asked her for assistance. 1. Should Karen Lawyer meet with Richard? Should Mrs. Cunningham be included in such a meeting? 2. Does Mrs. Cunningham need a guardian? Are there less restrictive alternatives? What facts are needed to answer this question? 3. Can Karen Lawyer, Esq. file a guardianship petition on behalf of Richard to have Mrs. Cunningham adjudicated incapacitated? 4. If Karen Lawyer declines to represent Richard to petition the court for guardianship should Karen Lawyer nevertheless give Richard any advice? 2013 NAELA Annual Conference May: 2-4 Page: 10