ESTATE PLANNING FOR ELDERLY, PART 1 & PART

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1 ESTATE PLANNING FOR ELDERLY, PART 1 & PART 2 First Run Broadcast: December 14 & 15, :00 p.m. E.T./12:00 p.m. C.T./11:00 a.m. M.T./10:00a.m. P.T. (60 minutes each day) Estate planning for the elderly involves far more than the tax planning of conventional trust and estate planning. Elderly clients are often motivated by fears of outliving their assets, the need to make advance medical decisions about their health care, funding long-term care at home or in a nursing facility, and helping provide for the education of grandchildren. In addition, elderly clients divorce and remarry late in life, greatly complicating planning. There is also the increasingly pervasive challenge of working with clients with diminished capacity or finding a way to work at the direction of their heirs or fiduciaries. This program will provide you with a real-world guide to multi-faceted planning for the elderly, including planning with revocable living trusts, significant health care and maintenance issues, late-in-life divorces and remarriages, and working with clients with diminished capacity. Day 1 December 14, 2017 Overview state and trust planning for the elderly Issues related to client competence, undue influence, and dependence Planning with revocable living trusts Late-in-life divorces, remarriages, and impact on inheritance Avoiding post-mortem disputes with family and other potential claimants Day 2 December 15, 2017: Speakers: Drafting advanced medical directives and the use of health care surrogates Disability and planning for long-term care Role of public benefits SSI, Medicare, Medicaid and asset protection trusts Conservators, guardians, and property managers Planning for the tuition and educational expenses of grandchildren Missia H. Vaselaney is a partner in the Cleveland office of Taft, Stettinius & Hollister, LLP, where her practice focuses on estate planning for individuals and businesses. She also represents clients before federal and state taxing authorities. Ms. Vaselaney is a member of the American Institute of Certified Public Accountants and has been a member of the Steering Committee for AICPA s National Advanced Estate Planning Conference since Ms. Vaselaney received her B.A. from the University of Dayton and her J.D. from the Cleveland-Marshall College of Law. Michael Sneeringer an attorney in the Naples, Florida office of Porter Wright Morris & Arthur LLP, where his practice focuses on trust and estate planning, probate administration, asset protection planning, and tax law. He has served as vice chair of the asset protection planning committee of the ABA s Real Property, Trust and Estate Section and is an official reporter of the Heckerling Institute. Mr. Sneeringer received his B.A. from Washington & Jefferson College, his J.D., cum laude, St. Thomas University School of Law, and his LL.M. from the University of Miami School of Law.

2 VT Bar Association Continuing Legal Education Registration Form Please complete all of the requested information, print this application, and fax with credit info or mail it with payment to: Vermont Bar Association, PO Box 100, Montpelier, VT Fax: (802) PLEASE USE ONE REGISTRATION FORM PER PERSON. First Name Middle Initial Last Name Firm/Organization Address City State ZIP Code Phone # Fax # Address Estate Planning for Elderly, Part 1 Teleseminar December 14, :00PM 2:00PM 1.0 MCLE GENERAL CREDITS VBA Members $75 Non-VBA Members $115 NO REFUNDS AFTER December 7, 2017 PAYMENT METHOD: Check enclosed (made payable to Vermont Bar Association) Amount: Credit Card (American Express, Discover, Visa or Mastercard) Credit Card # Exp. Date Cardholder:

3 VT Bar Association Continuing Legal Education Registration Form Please complete all of the requested information, print this application, and fax with credit info or mail it with payment to: Vermont Bar Association, PO Box 100, Montpelier, VT Fax: (802) PLEASE USE ONE REGISTRATION FORM PER PERSON. First Name Middle Initial Last Name Firm/Organization Address City State ZIP Code Phone # Fax # Address Estate Planning for Elderly, Part 2 Teleseminar December 15, :00PM 2:00PM 1.0 MCLE GENERAL CREDITS VBA Members $75 Non-VBA Members $115 NO REFUNDS AFTER December 8, 2017 PAYMENT METHOD: Check enclosed (made payable to Vermont Bar Association) Amount: Credit Card (American Express, Discover, Visa or Mastercard) Credit Card # Exp. Date Cardholder:

4 Vermont Bar Association CERTIFICATE OF ATTENDANCE Please note: This form is for your records in the event you are audited Sponsor: Vermont Bar Association Date: December 14, 2017 Seminar Title: Estate Planning for Elderly, Part 1 Location: Credits: Program Minutes: Teleseminar - LIVE 1.0 MCLE General Credit 60 General Luncheon addresses, business meetings, receptions are not to be included in the computation of credit. This form denotes full attendance. If you arrive late or leave prior to the program ending time, it is your responsibility to adjust CLE hours accordingly.

5 Vermont Bar Association CERTIFICATE OF ATTENDANCE Please note: This form is for your records in the event you are audited Sponsor: Vermont Bar Association Date: December 15, 2017 Seminar Title: Estate Planning for Elderly, Part 2 Location: Credits: Program Minutes: Teleseminar - LIVE 1.0 MCLE General Credit 60 General Luncheon addresses, business meetings, receptions are not to be included in the computation of credit. This form denotes full attendance. If you arrive late or leave prior to the program ending time, it is your responsibility to adjust CLE hours accordingly.

6 Estate Planning for the Elderly Presented by: Missia H. Vaselaney Taft Stettinius & Hollister LLP - Cleveland, Ohio (216) mvaselaney@taftlaw.com Michael A. Sneeringer Porter Wright Morris & Arthur LLP Naples, Florida (239) MSneeringer@porterwright.com

7 Overview: estate and trust planning for the elderly

8 Two day CLE: Day 1 Issues related to client competence, undue influence, and dependence Planning with revocable living trusts Late-in-life divorces, remarriages, and impact on inheritance Avoiding post-mortem disputes with family and other potential claimants Day 2 Drafting advanced medical directives and the use of health care surrogates Disability and planning for long-term care Role of public benefits SSI, Medicare, Medicaid and asset protection trusts Conservators, guardians, and property managers Planning for the tuition and educational expenses of grandchildren

9 Overview Who is your client? Beneficiary issues What documents should I draft? Specific situations: obeneficiaries bring parent/client to estate planner oclient in the hospital oclient dies while estate planning documents are being prepared odocuments do not work as attorney intended them to for client oclient wants to leave money/gift in will/trust to attorney

10 Issues related to client competence, undue influence and dependence

11 Client Competence Planning for Incapacity owith longer life expectancies, it is increasingly common for a person to become incapacitated because of physical or mental disabilities otaken together, revocable trusts and durable powers of attorney may avoid the need for a probate court guardianship, with its attendant expense, publicity, unpleasantness, and inconvenience

12 Client Competence Planning for Incapacity Revocable trusts orevocable Trust may own and manage property for clients during such disability ograntor has the ability to choose trustee while he or she has capacity (in lieu of a court appointing a guardian) otrustee would have the power and duty to use Trust property for client s benefit

13 Client Competence Planning for Incapacity Durable powers of attorney oattorney in fact under Durable Financial General Power of Attorney can transfer property to the client s Trust and act on the client s behalf if he or she cannot handle his or her own affairs oagent under Durable Power of Attorney for Health Care can make medical decisions for the client if he or she is not able to do so oattorney/client escrow letter for safekeeping of originals

14 Client Undue Influence States allowing causes of action based upon the client s capacity States allowing causes of action based upon improper interference by third parties Mandatory reporter statutes

15 Client Undue Influence Ohio: [U]ndue influence invalidating a will is that which substitutes the wishes of another for those of the testator. * * * It must be such as to control the mental operations of the testator in the making of his will, overcome his power of resistance, and oblige him to make a disposition of his property which he would not have made if left to act freely according to his own wishes and pleasure.

16 Client Undue Influence Ohio: Similarly, undue influence to avoid a will must so overpower and subjugate the mind of the testator as to destroy his free agency and make him express the will of another rather than his own, and the mere presence of influence is not sufficient. Undue influence must be present or operative at the time of the execution of the will resulting in dispositions which the testator would not otherwise have made. West v. Henry, 184 N.E.2d 200, (Ohio 1962)

17 Client Undue Influence Florida: (1)In all proceedings contesting the validity of a will, the burden shall be upon the proponent of the will to establish prima facie its formal execution and attestation. A self-proving affidavit executed in accordance with s or an oath of an attesting witness executed as required in s (2) is admissible and establishes prima facie the formal execution and attestation of the will. Thereafter, the contestant shall have the burden of establishing the grounds on which the probate of the will is opposed or revocation is sought.

18 Client Undue Influence Florida: (2) In any transaction or event to which the presumption of undue influence applies, the presumption implements public policy against abuse of fiduciary or confidential relationships and is therefore a presumption shifting the burden of proof under ss Fla. Stat

19 Client Dependency Alcohol or substance abuse problems Use of trusts to provide that only funds necessary for food, clothing, and shelter be disbursed and that payments be made directly and only to the people providing the food, clothing, and shelter, not to the child Hold back of trust assets until 2 doctors certify that beneficiary has been drug free for a specified period of time. Incentives for documenting that client has met specified drug free periods or for meeting other accomplishments important to the client

20 Client Dependency Alcohol or substance abuse problems Trusts with holdback provisions fail when a drug addict beneficiary doctor shops Unless the trustee is a corporate fiduciary, many individual trustees do not have the time or resources to effectively monitor substance abuse

21 Planning with revocable living trusts

22 Revocable Living Trusts Simply put, it is a revocable trust or inter vivos trust (ignore the literal interpretation of the word living ) Differs from an irrevocable trust because a revocable trust can be amended and revoked Not just for elder law planning Compare trusts in Florida with trusts in every other state Other options (POD accounts, beneficiary designations, automatic bill pay)

23 Revocable Trusts Trustee considerations Amendment and revocation power considerations Creditor protection Funding o Types of assets o During lifetime o Use of probate

24 Revocable Trusts Flexibility Distributions to beneficiaries outright versus in further trust Trust protectors? Common disaster beneficiary considerations Lifetime and testamentary powers of appointment

25 Late-in-life divorces, remarriages, and impact on inheritance

26 Divorces Planning considerations pre and post-divorce Automatically predeceased in estate planning documents? Automatic revocation of beneficiary designations? Guardianship as a mechanism to stall divorce

27 Remarriages Children born from first marriage Planning for clients with new step children Pre and post nuptial agreements Changing preexisting estate planning documents and beneficiary designations

28 Inheritance Considerations Following Divorce and Remarriage Typical A/B marital trust plan Annual exclusion gifts to beneficiaries and then small outright distributions at death Providing for children via: o Annual exclusion gifts o Gifts to grandchildren for education expenses o Family vacations o Tangible personal property

29 Inheritance Considerations Following Divorce and Remarriage Following through with the family dynamic o What if second spouse begins to take better care of parent than first spouse and/or children beneficiaries? o Representing one spouse as opposed to both o Representing children prior to divorce or remarriage of parent Tortious interference with expectancy?

30 Avoiding post-mortem disputes with family and other potential claimants

31 Avoiding post-mortem disputes Reviewing and revising the estate plan annually Annual meetings with heirs Keep beneficiaries involved in the continuing estate planning process Use of memorandums of tangible personal property Amending and restating a trust as opposed to revoking a prior trust and starting over

32 Avoiding disputes with other potential claimants Business o Use of buy/sell agreement o Use of insurance Creditors claims o Use of checkbooks, credit card statements and online banking/credit card statements to determine claimants o Opening formal administration (as opposed to expedited probate) Use of umbrella insurance policies

33 Drafting advanced medical directives and the use of health care surrogates

34 Advanced Medical Directives Durable Health Care Power of Attorney Living Will Health Care Surrogate Authorization for Release of Protected Health Information (the HIPAA Authorization ) Slight State differences

35 Designation of Health Care Surrogate Suggested format (partial form, Florida): I, (name), designate as my health care surrogate under s , Florida Statutes: Name, Address, Phone If my health care surrogate is not willing, able, or reasonably available to perform his or her duties, I designate as my alternate health care surrogate: Name, Address, Phone

36 Designation of Health Care Surrogate Suggested format (partial form, Florida): INSTRUCTIONS FOR HEALTH CARE I authorize my health care surrogate to: (Initial here) Receive any of my health information, whether oral or recorded in any form or medium, that: 1. Is created or received by a health care provider, health care facility, health plan, public health authority, employer, life insurer, school or university, or health care clearinghouse; and 2. Relates to my past, present, or future physical or mental health or condition; the provision of health care to me; or the past, present, or future payment for the provision of health care to me.

37 Designation of Health Care Surrogate Suggested format (partial form, Florida): I further authorize my health care surrogate to: (Initial here) Make all health care decisions for me, which means he or she has the authority to: 1. Provide informed consent, refusal of consent, or withdrawal of consent to any and all of my health care, including life-prolonging procedures. 2. Apply on my behalf for private, public, government, or veterans benefits to defray the cost of health care.

38 Designation of Health Care Surrogate Suggested format (partial form, Florida): 3. Access my health information reasonably necessary for the health care surrogate to make decisions involving my health care and to apply for benefits for me. 4. Decide to make an anatomical gift pursuant to part V of chapter 765, Florida Statutes. (Initial here) Specific instructions and restrictions:

39 Disability and planning for long-term care

40 Disability Purchase of short and long term disability insurance SSDI Asset protection concerns Planning when disability benefits are in the estate plan

41 Long-term care Purchase of long-term care insurance Factors to consider o Life expectancy o Premium amount o Sources of income o Taxes o Familial support system Policy sources o Individual plans o Employer-sponsored plans o Plans offered by organizations o State partnership programs

42 Other planning ideas Unlimited gift tax exclusion exists for medical care Medical payments may be paid directly to the medical institution As population ages, wealthy child or grandchild making payments directly to the medical vendor Other considerations Begin working with clients in their 50s to illustrate through various planning scenarios Estate planning attorneys must work with elder law attorneys Note: not all estate planning attorneys do elder law

43 Role of public benefits SSI, Medicare, Medicaid and asset protection trusts

44 Social Security Social Security benefits are comprised of a broad category of payment forms including: o child support payments that are processed pursuant to Part D of Title IV of the Social Security Act o retirement and survivors benefits o supplemental security income benefits (SSI) o disability insurance benefits Not exempt under some state s laws

45 SSI Means based Typically, beneficiaries of SSI meet Medicaid eligibility requirements Maximum SSI payment amounts increase with the cost-of-living increases that apply to Social Security benefits Some States supplement SSI benefits

46 SSI Beginning January 2018: o Eligible individual $9, (annual) $750 (monthly) o Eligible couple $13, (annual) $1,125 (monthly) o Essential person $4, (annual) $376 (monthly) Monthly amount is reduced by subtracting monthly countable income In the case of an eligible individual with an eligible spouse, the amount payable is further divided equally between the two spouses.

47 Medicare and Medicaid Qualification When does Medicare end and Medicaid begin? Medicare Coverage o Part A o Part B o Nursing home care o Limits

48 Medicare and Medicaid Planning considerations using trusts o First party special needs trust o Qualified income trust o Pooled trust o Third party special needs trust Wealth planning and asset allocation so as not to disturb public benefit assistance of beneficiaries Planning for beneficiary following receipt of a personal injury lawsuit settlement

49 Medicaid Planning Qualifying for Medicaid o Planning with excess income o Exempt Resources o Look-back period o Penalty for transfers within look-back period o Countable resources o Community spouse

50 ABLE Accounts Created in 2014 Achieving a Better Life Experience Act of 2014 or the ABLE Act Tax-advantaged savings accounts for individuals with disabilities and their families The beneficiary of the account is the account owner, and income earned by the accounts will not be taxed

51 ABLE Accounts Contributions to the account made by any person (the account beneficiary, family and friends) made using post-taxed dollars and will not be tax deductible, although some states may allow for state income tax deductions for contribution made to an ABLE account Like state 529 college savings plans in terms of options ABLE Account provides more choice and control for the beneficiary and family than a pooled trust Cost of establishing ABLE account considerably less than either a Special Needs Trust or Pooled Income Trust

52 Asset Protection Trusts While Asset protection may be intended for beneficiaries, first and third part special needs trusts are not asset protection trusts as that term is typically used Drafting first party spendthrift trusts in a jurisdiction allowing asset protection trusts may protect assets from creditors but disqualify assets from public assistance; check state law Use of spendthrift clauses

53 Conservators and guardians

54 Conservators Appointed for military personnel (including the merchant marines) and members of the Red Cross who have gone missing or may have been killed in action Appointed for persons who have disappeared Petition under Florida law: o The names, addresses, and ages of the spouse, children, mother, father, brothers, and sisters, or, if none of these is living, the next of kin, of the absentee o The name, address, and age of any other person who would have an interest o The exact circumstances which cause the person missing to be an absentee including the date he or she was first known to be missing

55 Conservators Petition under Florida law (continued): o The necessity for establishing a conservatorship o Whether or not the person alleged to be an absentee has a will and the whereabouts of said will o A statement of all property constituting an asset of the alleged absentee s estate or in which he or she has any interest and the approximate value of same Conservators have the right to manage and invest the absentee s assets including the right to sell property and collect income on behalf of the absentee

56 Guardians A person who has been appointed by the court to act on behalf of a ward s person or property, or both Plenary (exercise all delegable legal rights) Limited (exercise the legal rights and powers specifically designated by court order entered after the court has found that the ward lacks the capacity to do some, but not all, of the tasks necessary to care for his or her person or property, or after the person has voluntarily petitioned for appointment of a limited guardian)

57 Guardians Guardianship of the Person o Consider the expressed desires of the ward as known by the guardian when making decisions that affect the ward o Allow the ward to maintain contact with family and friends o Not restrict the physical liberty of the ward more than reasonably necessary o Assist the ward in developing or regaining capacity, if medically possible o Notify the court if the guardian believes that the ward has regained capacity o Make provision for the medical, mental, rehabilitative, or personal care services for the welfare of the ward o To the extent applicable, acquire a clear understanding of the risks and benefits of a recommended course of health care treatment before making a health care decision

58 Guardians Guardianship of the Person o Evaluate the ward s medical and health care options, financial resources, and desires when making residential decisions that are best suited for the current needs of the ward. o Advocate on behalf of the ward in institutional and other residential settings and regarding access to home and community-based services. o When not inconsistent with the person s goals, needs, and preferences, acquire an understanding of the available residential options and give priority to home and other community-based services and settings.

59 Guardians Guardianship of the Property o Protect and preserve the property and invest it prudently (according to state law), and keep clear, distinct, and accurate records of the administration of the ward s property o Perform all other duties required of him or her by law o At the termination of the guardianship, deliver the property of the ward to the person lawfully entitled to it

60 Planning for the tuition and educational expenses of grandchildren

61 Planning for the tuition and educational expenses of grandchildren Annual Exclusion Gifts o $14,000 (2017) o $15,000 (2018-?) Unlimited gift tax exclusion for qualifying payments of tuition o Must be paid directly to the institution

62 Planning for the tuition and educational expenses of grandchildren 529 Plans o o State income tax benefits Custodian options State prepayment plans o Interest? o Experiences in Florida

63 529 Plans Proposals for 2017 and beyond (As of December 11, 2017) Current law: Designated for saving for qualified higher education expenses Senate bill: Expanded to provide K-12 expenses, $10,000 per beneficiary annually House bill: Expanded to provide K-12 education expenses, including homeschools, $10,000 per beneficiary annually

64 Thank you! Presented by: Missia H. Vaselaney Taft Stettinius & Hollister LLP 200 Public Square, Suite 3500 Cleveland, Ohio Direct Dial: (216) & Michael A. Sneeringer Porter Wright Morris & Arthur LLP 9132 Strada Place, 3 rd Floor Naples, Florida Direct Dial: (239) msneeringer@porterwright.com

65 THE LAWYER S ROLE WITH THE OLDER CLIENT Missia H. Vaselaney Taft Stettinius & Hollister LLP 200 Public Square, Suite 3500 Cleveland, Ohio Direct Dial: (216) mvaselaney@taftlaw.com & Michael A. Sneeringer Porter Wright Morris & Arthur LLP 9132 Strada Place, 3 rd Floor Naples, Florida Direct Dial: (239) msneeringer@porterwright.com

66 I. INTRODUCTION TO ELDER LAW The relationship between an older client and his or her lawyer is sometimes different from that in other legal fields. Recognizing these differences, the legal profession is adjusting its practices to meet the needs of the elderly client, but this process is new. This field of law is sometimes referred to as elder law. For the present, at least, the uniqueness of the situation can only be appropriately handled by direct conversation between the attorney and the client. The following are some of the issues that the older client might want to discuss with his or her attorney (or the attorney may want to discuss with the client) to make the relationship more mutually satisfactory. II. THE ELDER LAW CLIENT S RELATIONSHIP WITH HIS OR HER LAWYER A. The Client s Desire For Legal Help. Older people are often brought to an attorney by their family or friends. At times this makes it hard for the attorney to know who is actually asking for help. As the attorney has a duty to be loyal to his or her client, knowing who is the person asking for help is important in how problems will be addressed. As complicated as this may seem, because elder law attorneys are particularly interested in the welfare of the older individual and because most families share this interest, just how the problem is managed is not likely to lead to a different result. Most elder law attorneys, however, would rather work with the elderly parent as the client both because it better serves the older client and because it simplifies many ethical concerns. 2

67 Therefore, when first seeing an elder law attorney, it is wise for the older client to indicate to the attorney what he or she want done, or what others want the attorney to do for you. If what the client wants done is the same as what others are suggesting, it may not be as important, but if the client does not totally agree with what others want, the attorney should be told. The scope of what such client desires should be set out in the initial engagement letter from the elder law attorney to the client. B. The Client s Desire For Confidentiality. Many older people feel free discussing their problems with or in front of their immediate family, but some do not. Frequently, this is out of a desire to spare worry or out of a desire not to burden their family, but at other times it arises from a fear, justified or not, that others do not share their best interests. Because the older client is often dependent on others for transportation and implementation of proposed actions, members of the family are often present when discussions occur with the attorney. As a result, important information may be withheld, hampering the attorney s ability properly to represent the older client. Therefore, when first consulted, the elder law attorney will, if possible, arrange to talk with the older client alone so he or she can express his or her desires about confidentiality and what the client wants said to the family. If the opportunity does not arise and the client is concerned about what is said to the family, it is wise for the client to call or the lawyer in order to make this clear. C. The Client s Relationship With His Or Her Family. In some legal situations, one person ends up arguing against the position of another party. In this situation, the lawyer s role is to advise his or her client how to win in the contest. When representing an elderly client, however, this approach is 3

68 often inappropriate, because even though actions most beneficial to the client may go against the financial interests of the family unit, most families are more concerned with the parents well-being than their own financial interests. At the same time, many parents are equally concerned with the best interests of the other family members. When consulting an elder law attorney, it is therefore important to let the attorney know how one client compares benefit to the family with the client s own benefit. This is particularly true relating to property which would normally pass to the family after death. Assets accumulated during one s life should be used primarily for the benefit of the individual, not just preserved as an inheritance for others, but the client s personal beliefs on this subject should control what is done. D. The Client s Feeling About Dual Representation. People who have dealt with attorneys throughout their lives learn to live with the adversarial system in which one attorney represents one person in a dispute and another attorney represents the other person. This system, however, has not proven to be the best for handling the problems which frequently face the elderly. Instead, lawyers are often asked to represent more than one person at the same time, the husband and wife, or the parent and child being the usual combinations. Unfortunately, because most laws of legal ethics have only been worked out related to a single client, the proper role of the attorney in such dual representations is uncertain, representing both sides in the same matter normally is still considered unethical as a co-called conflict-of-interest. When asking an attorney to represent both a husband and wife or a parent and child, both must be aware and must accept the idea that sometimes decisions will have to be made that benefit one at the other s expense. If they are not comfortable 4

69 with this give and take and do not trust the attorney to try to work things out in everyone s overall best interest, dual representation is not appropriate. A letter should be drafted by the elder law attorney outlining the potential for conflicts in multigenerational family planning and identifying the parties to such potential conflicts. It is important for the client to discuss this question with the attorney early in the relationship, because it is not uncommon for an elder law attorney to find that he or she has to end a dual representation because of a genuine conflict-of-interest. If there is love, trust and harmony between the parties and faith in the attorney, dual representation is likely to be simpler, cheaper, and much less upsetting. In the absence of love, trust and harmony, however, the opposite is likely to be the result. Incapacity is a major area of the elder law practice. Mental incapacity leads to loss of income and often requires expenditure of increased family finances. Incapacity of one family member is likely to limit the others quality of life, and frequently produces conflicts between equally loving children who have strong but different ideas regarding appropriate care for their parents. In addition, loss of mental capacity is often associated with personality changes that are upsetting not only to the family but to the individual as well. Legally, the problem of incapacity is greatest when capacity is neither totally present nor totally absent. When a client is totally capable of making decisions, be they personal or financial, these decisions must be followed. When an individual is clearly demented with no ability to make meaningful decisions, if they have executed a durable power of attorney, the agent named in the document makes decisions for the 5

70 incapacitated person. Otherwise, there is usually a state specific hierarchy which helps the professional determine who should be given the responsibility for decision-making. It is the area between the extremes, however, that the attorney dreads, especially when the true desires of the client can no longer be ascertained by direct questioning. When the individual is partially incapacitated and gives directions in conflict with that of the family, the attorney is placed in the position of having to decide which of the two conflicting directives will be followed. If the family choice is viewed as better than the client s choice, does considering the client incapable amount to a breach of the attorney s duty of loyalty to the client? Should loyalty persuade the attorney to find the client capable of decision-making even when it is not in the client s best interests? Luckily, experience tells us that the conflicts that arise are almost always the result of everyone not knowing what the now incapacitated person would truly want done both medically and financially. That is why elder law attorneys are so likely to stress the execution of a durable power of attorney to name the person the client trusts most to make decisions and putting the client s desires about finances and medical care into words so everyone will know what the client wants done if they can no longer speak for themselves. III. ETHICAL PROBLEMS IN ELDER LAW RELATIONSHIPS Although many aspects of elder law are similar to the general practice of law and should be treated in an age blind manner, others make it difficult to apply the Code of Professional Responsibility to the practice. 6

71 The attorney/client relationship generally presumes that the client is capable of identifying a legal problem, approaching the attorney on his or her own, defining the desired relationship with the attorney, entering into an agreement with the attorney, and maintaining responsibility for the payment of bills. The role of the attorney is typically as a provider of guidance in a controversy with another adversarial party. In elder law practice, the issues often fail to take this form. The client may not be the one to perceive the problem or to wish legal intervention. The benefits of any solution may run not as much to the client as to another party who the client wants to benefit and/or on whom the client is dependent. Often the client s legal capacity or competence are in question, and the party who is responsible for the lawyer s bill may, in fact, be the person who is hurt if the attorney serves the client s best interests. Furthermore, the attorney may find himself or herself believing that what is best for the client is other than as the client directs. Dependency on others is likely to lead to undue influence, even in the absence of outright coercion. What is the attorney s role when this appears to be the basis of a client s decision? Should this influence the attorney s determination of decision-making capacity? Does failure to follow the directives of a client with borderline capacity constitute a breach of loyalty? Initial contact frequently comes from family other than the prospective client, especially if capacity is a major issue and a change of residency is to be considered. In this situation is the attorney truly an agent of the client or of the family? Is there a conflict of interest when it is the family on whom the attorney will rely to pay the legal bills? 7

72 Even more conflicted is the situation in which the family suggests that a parent undertake estate planning aimed at minimizing taxes for the benefit of heirs, or when assets are to be distributed early to enhance Medicaid qualification. How strongly should the attorney point out to the older client that these legal manipulations are likely to be contrary to the best interests of the client unless one accepts a theory that providing more to the family after death is a legitimate interest of the parent? Further complicating the representation is the fact that as the client loses capacity, it becomes ever harder for the attorney to step out of the conflicted situation, for he or she knows the legal desires of the increasingly incapacitated client better than any other attorney every will. When the attorney truly believes the family is right in a conflict and wishes to support their approach, how can the older client be asked to find other representation? What, too, of the question of confidentiality? If the client brings family members along to an initial consultation, does that imply freedom to discuss issues with these individuals later? With other family members? What if it was truly the family that initiated the consultation? What if keeping information confidential could lead to the client s death? There are few answers to these elder law legal issues. Among the ethical obligations of the attorney to the elderly client are those requiring competent representation, acceptance of the client as the ultimate decision-maker, diligence in pursuing the client s desires, meaningful communication of information to the client, reasonableness of fees, confidentiality, and avoidance of conflicts of interests between those of the client and the interests of the attorney, former clients, or third parties with 8

73 whom the attorney also has a relationship. Add to these the problems of dual representation and the questions regarding capacity and one could wonder if any dual representation is possible. Fortunately, most families are keenly interested in the welfare of the elderly, and conflicts do not become important, but the elder law attorney must be alert to signs of discord between family members to avoid problems in the future. IV. THE QUESTION OF CAPACITY The issue of decision-making capacity is often critical in the establishing of the relationship between a client and an elder law attorney. When elderly people asking for representation are mentally clear or when they are obviously demented, there is little problem. But most often mental capacity lies somewhere between the extremes, putting the attorney in the position of having to decide who is the true client and when the elderly person s expressed wishes should be followed. When decision-making involves legal issues, it is the attorney s proper role to participate in deciding the presence or absence of capacity. Although obtaining input from physicians, family, associates and friends is appropriate, because capacity is a legal issue and is time and situation specific, if the attorney is the person most knowledgeable about the situation as it exists, the attorney should be the ultimate determiner of capacity. This is not an easy or pleasant task, raising both ethical and personal issues, especially when an established client begins to act in ways that the attorney believes are against the client s best interests and explained by diminished capacity. Little guidance will be found in the law. The attorney will have to rely on personal judgment. 9

74 Although unexpressed, many clients first entering a relationship with an elder law attorney know that they are putting more than their immediate legal problems in his or her hands. That is why they are so likely to be more interested in factors other than legal competency when choosing someone to represent them. That is also why they are likely to relate positively to an attorney and an office which strives to know them as people as well as a client with immediate problems. V. SUMMARY The client always remains in charge of the attorney-client relationship, at least while competent. The elder law lawyer s role is to implement the lawful goals of the elderly client. Advancing age, however, sometimes places unusual problems in the midst of the relationship through which both the client and attorney must work their ways. 10