Wednesday, December 23, 2009

What is Medicaid and will it pay for grandma's nursing home?

Some questions are awfully big. This is one of them. I can only skim the surface of the complex rules and benefits that fall under Medicaid, but I will give it a try.
Medicaid is federal money administered by the states to provide a variety of social services for the poor. For the elder law lawyer, most questions about Medicaid relate to whether an elder qualifies to have the government pay for long term care in a nursing home or similar facility. Medicaid is not Medicare. Medicare is health insurance that everybody gets when they turn sixty-five. Bill Gates gets it.

Medicaid is for the poor. At this writing, to qualify for Medicaid an elder must be sufficiently handicapped to need care in a facility, have less than $2,022 of monthly income, and have less than $2,000 in available assets. The figures in Medicaid calculations change frequently. The current ones can always be found here.

Medicaid planning is a strategic effort to make a person poor enough to qualify for Medicaid and thereby have the government pick up the cost of long term care.  This normally involves spending enough of the elder's money to get assets below the $2,000, yet preserve the elder's standard of living as much as possible. The strategic spending of money to obtain Medicaid is called "spend down."

When calculating the value of assets owned by an elder, certain assets are not considered. These are exemptions. Depending upon circumstances, a house may be exempt, or a car. Money in the bank--over the $2,000 limit--is never exempt. Thus, one way to do Medicaid planning would be to use money in the bank to buy, pay-off, or improve an exempt asset. Sometimes assets can be turned into income. 

Families often come to elder law lawyers with this request: mother wants to give her house and all her money to her kids ("she always wanted them to have it") and then have the government pay for her nursing care ("after all she paid taxes all these years") There are smart lawyers out there working for the state of Oregon whose job it is to make sure this doesn't happen. Here is the basic rule: YOU CANNOT GIVE AWAY YOUR MONEY AND THEN ASK THE GOVERNMENT TO SUPPORT YOU.

The exception to the basic rule is that you may be able to do it if you have quite a bit of money and a brave elder law lawyer. If the government doesn't challenge the strategy you win, hands down. If the government challenges the strategy and you win, the lawyer gets a good chunk of your cash for fighting the good fight. If the government challenges the strategy and you lose, the lawyer still gets paid and you don't get Medicaid. 

The application of the basic rule can cause a lot of tension in families. Grandma is often an easy touch, willing to buy new cars for her unemployed kids and bail the drug-addicted grandchildren out of jail. It can come as a shock to the family, that Grandma has to quit handing out cash and use her money for her own care needs. 

The answer to the question posed in the title to this entry is yes; Medicaid will pay for grandma's long term care. The first catch is that Medicaid will only pay if grandma cannot pay from her own money. The second catch is that grandma cannot make herself unable to pay for care by handing out cash to her relatives. Beyond that it gets pretty complicated.

I tell my elders when they come in and I see that they are not millionaires, "From now on you can give birthday and Christmas gifts worth up to $100 per person. Beyond that your ability to give away money is over. Write a will. Bake a cake, but don't give away money." Not only is this a good Medicaid strategy, it also lets them know which of the relatives are coming over because they really want to visit. 

Monday, December 21, 2009

What is probate and should I fear it?

Probate is the legal procedure for making sure a will is followed, or if there is no will, making sure Oregon law is followed in the distribution of property that belonged to a dead person. Wills give directions to the court about how an estate should be administered and how the property should be distributed, but it is the court that makes it happen. Probate is the broad term for that process.

In probate the property that belonged to the dead person is  called the "estate." The dead guy is called "the decedent."

The most important parts of a will when it comes time for probate will be (1) who is named to be the administrator of the will; (2) whether a bond is required; and (3) who gets what. If there is no will, a family member will have to step up to administer the will, a bond will be required and Orgeon law will determine who gets what property. In most cases, it goes to the decedent's children in equal shares. The people who get the property when there is no will are called "heirs."

Once you have the original will or are sure there is no will, a lawyer writes what is called a petition asking that someone be appointed personal representative of the estate and that a bond amount, if necessary, be set. The filing fee for the petition depends upon the value of the estate. In Multnomah County the current filing fee for an estate having between $100,000 and $500,000--a common range for a person who owned a house at death--is $457.00. The cost of the bond depends upon how much money is in the estate.

If the petition is in order, the court will appoint a personal representative who becomes--for legal purposes--the decedent. The personal representative must then gather together all property that belonged to the decedent, pay all debts owed by the decedent, and thereafter distribute the remaining property to the heirs or the persons named in the will. It is not a fun job, and nobody enjoys doing it.

Within sixty days of being appointed the personal representative must provide the court with an inventory of all property in the estate. During the four months that follow the appointment the personal representative must search out and pay the debts that the decedent owed when he died. The four months also allows the personal representative to do those things necessary to distribute the property to the people named in the will. This might mean evicting cousin Mildred, who has been living free in the house for twenty years, and thereafter selling the home so that the proceeds can be divided among the children of the decedent. It might mean selling cars or closing a business.

After the petition is filed, the lawyer sends a copy of it with a special notice to all the people named in the will and all the heirs that would have gotten property had there been no will. This allows any of them to challenge the will on the grounds that the will was executed when grandpa was incompetent or it was signed while grandpa had a gun to his head.

If at the end of the four months, no one has challenged the will and all the debts of the decedent have been paid, then it is time to distribute the property to the heirs or the persons named in the will. At that time the lawyer writes another petition asking the court to approve the distribution. If all goes smoothly, the judge approves the distribution, the property is transferred to the people mentioned in the will, and the case is closed.

The personal representative is entitled to be paid from the estate an amount equal to slightly more than two percent of the value of the estate. Attorney fees tend to run between $2,500 and $5,000. That includes writing all the papers for the court, keeping an eye on the debts, making sure the estate property is properly sold, and overseeing the final distribution.  If someone contests the will or other problems arise the attorney fees can be much more. The attorney fees, like the fees to the personal representative, are paid from the funds held by the estate.

A lot of people are concerned with avoiding probate. Some want to avoid the expense. Others want to avoid having their estate documents become a public record. One way to avoid probate is to die without a lot of money. If you die owning very little, there are alternatives to probate that allow the property to be transferred with fewer and simpler court filings. Another way is to own property in a way that does not make it part of your "estate." An "estate plan" may use joint ownership, beneficiary designations, and other legal devices that make probate unnecessary.

A popular way of avoiding probate is by putting your property in a revocable trust. Probate avoidance trusts are too complex to be discussed here, but they do work. The advantage to a trust is that it avoids probate. The disadvantage is that it is more expensive to establish, and it will be administered without the direction of the probate staff in your local county. If you have good and competent relatives who can take care of things without supervision, avoiding the courthouse is a good thing. If your relatives are not so diligent, the lack of supervision is a bad thing. And if your relatives are the litigious types who like to bicker, no legal plan will prevent them from dragging the whole thing into court anyway.

Wednesday, December 16, 2009

What is an elder abuse restraining order?

Oregon (Elder) Law provides that a disabled person or a person over sixty-five years of age who has been a victim of physical or financial abuse can ask the court for a restraining order that prevents the abuser from continuing to abuse the elder. There is no filing fee and the clerk of court is required to provide the necessary forms. The request must be heard by a judge within one day and the restraining order can be based solely upon the testimony of the abused elder or the elder's guardian. It is a powerful weapon.

As with anything in the law, the devil is in the details. So what does the elder have to tell the judge to get the restraining order? The elder must show that he or she has been the subject of abuse within the previous 180 days. Abuse is one or more of the following:
  • Physical abuse resulting in injury;
  • Neglect that leads to physical harm;
  • Abandonment by a care giver or other person with an obligation to care for the elder;
  • Willful inflicting of physical pain;
  •  Using derogatory names, profanity, ridicule or coercion;
  • Wrongfully taking or wrongfully threatening to take away money or property;
  • Non-consensual sexual contact.

After showing that the elder has been subject to abuse in one or more of the forms described above, the elder will then have to convince the judge that he or she is in danger of future abuse by the same person. If the judge finds that abuse has occurred and there is a danger of further abuse the court must act. The judge will issue a restraining order preventing the abuser from abusing, intimidating, or interfering with the elder. If necessary to prevent further abuse, the court can prohibit the abuser from entering any premises where the elder might be found. If the elder lives with her abuser and owns or rents the home, the abuser my be ordered out of the home with a policeman sent to help with the removal.

When the abuser is served with the restraining order the sheriff will also give him or her a form to fill out to object to the restraining order. Most people accused of elder abuse will object. The person accused of abuse has thirty days in which to file the objection. Once the objection is filed a trial will be held within twenty-one days. Although the judge has a duty to protect the elder from a traumatic confrontation with the abuser, the trial takes place according to the same rules that govern other trials. Both sides call witnesses, offer exhibits, and argue their side of the case. After hearing all the evidence from both sides the judge will uphold the restraining order, dismiss it, or change it to reflect the evidence. The judge may also require one party to pay the attorney fees incurred by the other.

If the abuser, before or after trial, violates the provisions of a restraining order he or she will be arrested and charged with contempt of court. At the very least, the abuser will get a free ride to jail. What happens after that will depend on the severity of the violation.

Because elder abuse restraining orders are so powerful and so inexpensive, creative elders and their lawyers have pushed the limit of the law. I have seen a local judge refuse to grant an elder abuse restraining order because a neighbor of the elder used profanity in an argument about a property line. The observation was the law was not intended to protect anyone over sixty-five from rude neighbors. On the other hand, a judge in Multnomah County recently issued a restraining order preventing protesters in front of a business from shouting at the elderly owner. My feeling is that most judges will be ready and willing to protect an elder from real threats, but unwilling to apply the law to every angry interchange in which one of the participants happens to be over sixty five. A lot of sixty-five year olds are in pretty good shape and can take care of themselves--and the judges know it.

Monday, December 14, 2009

What is a bond and why do I have to post one?

In the world of Oregon elder law, a bond is required in almost all conservatorships and many estates. When you are appointed a conservator, you are put in charge of funds belonging to an elder who can no longer handle money. The bond is a promise by a bonding company to the court and the impaired elder to replace any money you steal. So if the first thing you do as conservator is take the money and fly to Paraguay, the bonding company is on the hook for the loss. In an estate you are appointed personal representative--sometimes called executor--to manage the money that belonged to the dead person for the benefit of the heirs. If you steal the money instead, the bonding company pays off.

Because of the cost, most wills ask the court to dispense with a bond and courts normally grant the request. If, however, the person who died did not waive bond, or left no will at all, you will have to post a bond to guarantee that you don't run off with the money.

People have the mistaken idea that getting a bond is related to the applicant's honesty. That isn't really the case. Bonding companies offer bonds using the same standards used by credit card companies in offering credit. The availability of a bond is dependent upon the wealth and credit history of the applicant. When someone comes to me wanting to be appointed conservator in order to protect grandma's million dollars, the very first thing I do is call my bonding company. My client could be as upstanding and honest as the day is long, but if she is a store clerk who lives in an apartment, there is no bonding company in the world who is going to bond her for a million dollars. She simply does not have enough money and  credit worthiness to get the bond. In an estate, the same thing applies. Grandpa's will may name cousin Bob to be the personal representative, but if Bob can't qualify for the bond someone else will end up doing the job.

In some cases none of the people interested in the impaired elder or the estate can qualify for the bond. In those cases, the lawyer handling the conservatorship or the estate has to look for a professional to do the job. I am not convinced that professionals do a better job at being a conservator or a personal representative than family members, but professionals all have  established relationships with the bonding companies. If they don't, they are out of business.

Even when a family member does qualify for a bond, it is expensive. Depending upon the credit worthiness of the applicant, the bond for a middle class conservatorship or estate can be a couple thousand dollars a year. Consequently, lawyers are always looking for ways to reduce the amount--and therefore the cost--of the bond. The most common way of doing this is by restricting assets.

Let's say grandma dies owning a $350,00 home and a $50,000 investment account. Little Hewey qualifies for a bond, but wants to reduce expenses so there is more money to distribute to him and his brothers, Dewey and Louie. Hewey will ask the court to restrict sale of the real property so that it cannot be sold without court order. That will protect the real estate. He will then ask that the bond be set at $50,000, enough to cover the investment account. The savings to the estate will be significant. Hewey coult also put the cash in a restricted account. This would also reduce bond costs.

Hewey has to be careful though. Filing those motions to restrict sales of real estate and restrict accounts increases attorney fees. He needs to make sure the savings are not eaten up in additional lawyers fees. The key will be in not spending more money trying to reduce the cost of the bond than the bond would have cost in the first place.

Bonds are important protections in estates and conservatorships, but they also prevent some good and honest family members from serving. When a family member can serve, he or she must examine carefully both the cost of the bond and the cost of the legal strategies to reduce it.

Thursday, December 10, 2009

How disabled does an adult have to be before a guardian can be appointed?

When the law appoints a guardian for an adult it takes away the most important and  intimate rights we have come to expect as citizens. Only being sent to prison is worse. A guardian can tell you where you have to live, tell you when you have to go to the doctor, and tell you what medical treatments you must endure. Because of the intrusiveness of having a guardian appointed, the law provides many protections to make sure that guardianships are not ordered unless they are absolutely necessary. You might think that one of those protections would be a clear and unambiguous legal standard for appointing a guardian. If you thought that, you were wrong.

In order to have a guardian appointed for an impaired elder a court must find that the elder is "incapacitated." Incapacity is defined in Oregon Statutes. In order for you to understand the problems that lawyers have in guardianship cases you should read the definition.

“Incapacitated” means a condition in which a person’s ability to receive and evaluate information effectively or to communicate decisions is impaired to such an extent that the person presently lacks the capacity to meet the essential requirements for the person’s physical health or safety. “Meeting the essential requirements for physical health and safety” means those actions necessary to provide the health care, food, shelter, clothing, personal hygiene and other care without which serious physical injury or illness is likely to occur.

We learn one thing from the definition. We learn that the only impairments that will support a guardianship are those related to either thinking or communicating. You can be paralyzed from the neck down, but a guardian won't be appointed if you can still make decisions and communicate your wishes.

Dementia arrives in stages. How cognitively impaired do you have to be before the law steps in? The second part of the definition suggests that the impairment must be so severe that physical injury or illness is likely to result. This leads to the common scene in which a relative has applied to have a guardian appointed for a resident who is in a long term care facility and who is not refusing medical treatment. If I represent the elder I ask the director of the care center whether the elder in his care is currently in danger of physical injury. To say that the elder is in danger condemns the care center; to say that the elder is safe says that a guardian is unnecessary.

It is fairly clear in real life that the degree of impairment is related to the conditions in which the elder lives. An elder who insists on living alone in a remote cabin will have to show greater cognitive skills than one who lives in a full-service long term care facility.

When the Oregon Statutes don't answer the question, lawyers turn to reported cases from the Oregon Court of Appeals. The Oregon case interpreting the definition of incapacity is called Shaefer v. Shaefer. In Shaefer, the elder was an eighty-six year old woman who lived alone with a large number of cats and a dog. She had some memory loss plus confusion, her house smelled of pet urine, and she was not taking her prescribed medicine. The court held that Mrs. Schaefer did not need guardian.

The court said that for a guardian to be appointed for Mrs. Schaefer the judge would need clear evidence of three things:
  1. That the elder has severely impaired perception or communication skills.
  2. That the elder cannot take care of basic needs to an extent that it threatens life or health,
  3. And, that the cognitive impairment is the cause of the life-threatening disability.
Mrs. Schaefer had some cognitive loss and she was refusing medical treatment, but she was not refusing treatment because of the cognitive decline. She was refusing because she did not like the side effects of the medicine. The smell of cat urine in her house was the price she paid for the companionship of her cats, it was not the result of dementia.

The Oregon probate judges read the Schaefer case with great interest, and then ignored it. I have not seen or heard about Schaefer having much of an impact. I think that the best approach to the real standard for a guardianship comes from Tim McNeil, a lawyer and popular presenter in the Oregon elder law field. He points out that guardianships and conservatorshps are called protective proceedings because the point is to protect vulnerable elders. Judges will follow the law, but they are not going to let fear of being overturned on appeal prevent them from stepping in when they see an elder truly in danger.

No one wants a guardian and elders usually object when served with the papers that start a guardianship proceeding. I think, at the end of the day, the guardianship cases succeed or fail in whether the elder is in immediate danger. If you claim a guardian should be appointed and can show a clear threat to the health of the elder that can be eliminated by appointment of a guardian, you will probably prevail. If the threat is speculative, or looms only in the future, you may not.

Saturday, December 5, 2009

Why it's called an estate "plan."

Couples come to my office and tell me it's time for them to write wills. I correct them and say what they need is an "estate plan." The change of terms is more than just lawyer-talk. People really do need a plan. That's because when you die, property passes to other people in three different ways. A will is one of those ways. A plan takes into account all three.

When you die, some property will pass to others because of the way it is owned. A husband and wife usually own their home in a type of joint ownership that allows it to pass automatically to the survivor when the first of the couple dies. I own a house like this with my wife. Let's say I never liked her that much, and I secretly write a will saying that nothing should go to her. When I kick the bucket, she still gets the house because it was jointly owned with a right of survivorship. Husband and wife often have joint bank accounts, and maybe joint brokerage accounts, that are owned with a right of survivorship. When one of them dies, the other gets the money. In a long term marriage it is common for all of the couple's major assets to be jointly owned.

Another way that property passes when you die is by contract. I have a contract with Flibinite Life & Casualty which says that if I die in a car wreck Flibinite will pay my wife a hundred grand. The contract is called life insurance, and when I bought it I filled out a beneficiary form naming my wife as the person to receive the death benefit. I also have an IRA retirement plan. The guy who set up that plan and loses my money in the stock market for me had me designate a beneficiary when I set it up. The beneficiary gets the money if I die before I can use it all up. Some stock accounts are controlled by beneficiary designation; so are 401(k) retirement accounts. Your bank account may have a "pay on death" feature. This is the same as a beneficiary designation. It is a contractual agreement to give a certain person the money when you are gone.

Beneficiary designations control the money no matter what I do with my marriage. Let's say this time, instead of writing a secret will, I divorce my wife and marry a twenty-two year old roller derby queen. If I don't change those beneficiary designations before I die, all those companies holding my cash are going to pay--according to contract--the woman I divorced. If the roller derby queen married me for my money, she is going to be royally pissed off at this. That is why I need a plan.

The third way that property passes is by will. Everything that did not go by joint ownership and did not go by contract, goes to the persons named in my will--that is, if there is anything left.

So think about this. Let's say a married couple writes wills that both say, I give everything to my loving spouse, but if he or she does not survive me I give it all to my children: Huey, Dewey and Louie. Then the husband kicks off. (Husbands always kick off first--an average of twelve years before wives.) The house is jointly owned; the bank accounts are all in both names; and the husband's fat retirement plan goes to the wife because she is named as the beneficiary. There is nothing left to go to the people named in the will.

Husband's will is now scrap paper, but think about wife. She no longer owns the house jointly. The bank accounts are all hers and she has collected the money from the retirement plan. When she dies, everything goes to the people named in her will.

I wrote two wills. One of them was a waste of paper, but the other one controlled everything. The estates of most middle class couples play out just like this. Although the men usually die first, no one can be sure. One of the wills will be important; one of them will not.

In an upcoming post, I will discuss the wife who outlives her husband, revokes the will written during the marriage, tells Huey, Dewey and Louie to kiss off, and moves to Argentina with the pool boy.

Thursday, December 3, 2009

What is a court visitor?

In guardianship cases, Oregon law requires that a "court visitor" interview the elder, the caregivers, and the family. The visitor--the independent eyes and ears of the judge--then makes a report to the court. Often the court visitor is the most important witness in the case. The lawyer with a court visitor's report on his side is likely to win, and the lawyer going against the recommendation of the court visitor is left scrambling for a paid expert willing to testify that the court visitor is wrong.

The process for hiring the court visitor varies widely from county to county. In Multnomah County there are two court visitors. You pay their fee when you file the guardianship petition, and the probate department decides which visitor gets the case. The current fee is about $425. In other counties the lawyer must select a visitor from a list and pay the visitor directly. In the larger counties the court visitors are psychologists or social workers. In counties where money is short, the visitor may be a local volunteer with time on his hands, or a judge's secretary.

If no one objects to a guardianship petition and the court visitor recommends it, the court will order a guardian appointed without ever hearing from the disabled elder. If, however, the elder objects to the guardianship or wants an attorney, the visitor will communicate that to the court. The court will then advise the lawyers and set the matter for a hearing. It the elder cannot afford an attorney, the court will assign one from a list of volunteers.

At a hearing on a guardianship, the report of the visitor comes into evidence and the visitor testifies as an expert. This means that the visitor can stay in the courtroom, watch the other witnesses, and comment upon what they say. The position of visitor is so powerful in some counties, that lawyers write their guardianship petitions with the visitor in mind.

Judges like having the visitor present as an unbiased witness. Putting the visitor's testimony at the center of guardianship proceedings, however, has two problems. First, visitors err of the side of protecting the elder. A guardianship is their hammer, and soon every social problem involving elders begins to look like a nail. Secondly, visitors seldom spend significant time with the elder. Because of the unique position of the visitor, it often takes the testimony of several professionals and family caregivers--people who may have spent months or years with the elder--to overcome the testimony of a visitor who saw the elder for less than an hour.

The use of the visitor streamlines the guardianship process for the lawyer and the litigants, but the efficiency is not without costs. Any person contemplating a guardianship for an adult should talk frankly with his or her lawyer about how the visitor system works in the local court and what approach should be taken if the visitor does not support the guardianship.

Wednesday, December 2, 2009

Choosing an elder law lawyer

There comes a time when a family must consult a lawyer about elder law issues. Some people are lucky enough to have a friend or co-worker who has had a positive experience and can recommend and attorney in the elder law field. Often, however, that is not the case, and the family faces the daunting task of souring the Yellow Pages and the internet for an appropriate person.

We all know that the Yellow Pages contain advertising. Lawyers buy ads and hope the amount of business the ads bring in will be worth the monthly cost. Virtually all third party websites that provide information about elder law lawyers are the same. Lawyers pay to have their names listed. If you go to the AARP web site looking for an attorney you will find a list of attorney's who have paid to be on the list. In the case of the AARP, it costs a lot. The same applies to ElderLaw Answers, Oregon Elder Law Attorneys, NOLO Press, and many many more. If there is a list of lawyers on the web, odds are that the lawyers paid to get on it.

Most of the web sites listing lawyers shy away from rating them. That is not the case with Avvo. Avvo lists all lawyers and lets us claim our listing and fill in the blanks about our experience and specialties. It also gives lawyers a ranking based upon some mathematical formula. Due to my colorful history with the Oregon State Bar--a history told here and here and probably lots of other places--I am ranked at the bottom with the warning "extreme caution." Who knows, Avvo may be right--after all they have math on their side. On the same page as my abysmal ranking is an ad for another lawyer in my neighborhood. He gets his picture on my page because he paid for an upgrade. At the end of the day, it is still all about advertising.

You might look for a lawyer who belongs to the appropriate organizations. Many of us elder law lawyers belong to the National Academy of Elder Law Attorneys. I belong to NAELA. I read the newsletters and the journals they send me. I wouldn't have to do those things to belong. I could just send in the money once a year and the organization would be quite happy take it and list me as a member. I belong to the Guardian/Conservator Association of Oregon, the Oregon Gerontological Association, the Elder Law Section of the Oregon State Bar and the East County Alano Club. Does belonging to these organizations make me a better elder law lawyer? Probably. But not that much better. What counts is what we do at work, not what we do in our spare time.

Here is my theory. Find some elder law lawyers in your neighborhood and look at their web pages. Get a feel for them. Some folks like a firm--it gives them a sense of security to see several lawyers and a lot of staff. Other people are more at home with a sole practitioner or a couple of partners. These folks like the intimacy of the small practice. Then meet with the lawyer and see if you like him or her. There are a million lawyers; there is no excuse for having one you don't like. Talk about your problem and see if you are comfortable with both the legal plan the lawyer devises and the cost. If it doesn't feel right, get out and try somebody else.

If you follow my plan, chances are you will be okay. Law ain't rocket science. Most lawyers are going to look at your case and come up with the same answer. People win cases because they have good cases, not because they have good lawyers. You don't want a lawyer who can't find the court house, but in the elder law world, you probably don't need Clarence Darrow either.

Tuesday, December 1, 2009

Oregon Elder Law: What is a guardianship and what must I do to get a guardian appointed in Oregon.

The Oregon courts will appoint a guardian when a cognitively impaired elder is making life style choices that put him or her in physical danger. Often a guardian is appointed to place an impaired elder in a long term care facility. The appointment of a guardian is an even more severe infringement on personal rights than the appointment of a conservator. A conservator controls only money. A guardian can agree to medical procedures and determine where the elder will live. Thus, the protections for the elder in a guardianship proceeding are even greater than in a conservatorship.

To appoint a guardian, a court must have convincing evidence that the elder's ability to evaluate information is so impaired that the elder cannot manage nutrition, personal hygiene and other basic health care needs. The court must also find that without the appointment of a guardian serious injury or death is likely to result. Thus, the need for a guardian is partially dependent upon the situation in which the elder lives. The court is much more likely to find a threat of serious injury in the cases of an elder living alone than in cases of an elder living among family or in a long term care center. As in a proceeding for a conservator, the elder has the right to copies of the documents filed with the court, has a right to object, and the right to an attorney.

When a family member seeks the appointment of a guardian, the court will appoint what is called a "visitor," to talk to the elder, his family and his care givers. The visitor is the eyes and the ears of the court. The visitor will interview the interested parties and report to the judge, giving his or her opinion as to whether a guardianship is warranted and whether the person seeking to be guardian is an appropriate surrogate decision maker. The costs of the visitor are paid by the person filing the guardianship papers.

If no one files an objection and the court visitor reports that the the proposed guardian in an appropriate choice, the court may order a guardianship opened without a court hearing. If the elder or other family members object, there may have to be a hearing in which evidence is presented by both sides. If a guardian is appointed, the guardian will be required to report once a year to the court on the condition of the elder.

What is a conservatorship in Oregon?

When there is convincing evidence that an impaired elder can no longer manage money, a family member may apply to the court to have a conservator appointed. The court order appointing the conservator will be written to address the specific financial problems facing the elder. In some cases, that will mean that the conservator will completely take control of the elder's money. In other situations, the conservatorship may be more limited, allowing the elder the dignity of controlling some money but restricting the elder's ability to transfer real estate or access investment accounts. After being appointed, the conservator must collect, protect and spend funds for the elder's benefit.

The person seeking to be appointed conservator must prove to the court that he or she has the skills to manage money. The conservator must also post a bond sufficient to guarantee that the elder's money remains safe. In some cases the requirement of a bond means that even well intentioned and honest family members cannot qualify to be a conservator. In these cases, the court will appoint a professional conservator to do the job.

A court order appointing a conservator denies an elder important rights that most of us take for granted. Thus, the elder is entitled to see all the papers filed in court and is given the opportunity to object. Copies of the documents prepared by the lawyer must also be given to the elder's closest relatives so that they too can object. If the elder objects, he or she can hire an attorney and in some cases the court will appoint an attorney. The elder has the right to make the relative who started the court proceeding prove the case for appointment with clear and convincing evidence.

If the court appoints a conservator, the person appointed must once a year provide the court with a thorough accounting of all money received by the elder and all money spent. Most conservators keep an attorney retained for as long as the conservatorship lasts. If the elder improves so that he or she is once again able to manage money, he or she may ask that the conservatorship terminate. If the elder dies while under a conservatorship, the money in the hands of the conservator is distributed according to the elder's estate plan.

Tuesday, November 24, 2009

Benefits and Drawbacks of a Power of Attorney


A power of attorney is the least expensive and least complex of the methods for appointing a surrogate decision maker. Although the law allows the agent to enter financial transactions for the principal, the law requires that the power be used only for the benefit of the impaired person. Terms contained in powers of attorney vary widely, but normally they do not permit the agent to give away the principal's money or use money for the agent's own benefit. Financial powers of attorney are commonly used by family members to contract for long term care, pay the elder's bills, and apply for government benefits.


In elder care the power of attorney has three serious drawbacks. First, it must be signed when the impaired person still has the intellectual capacity to understand the document's terms and consequences. Often, the elder has declined so far before the problem is recognized that it is already too late to get one signed. Second, no law requires banks and other financial institutions to recognize the validity of the document. Banks, stock brokers and others in the financial world often refuse to recognize a power of attorney unless it is on their standard form or signed in their offices. If this happens, the agent may not be able to get access to the impaired persons money in order to use it for health care. The third drawback is that there is no oversight of the agent. Elder financial abuse is a serious problem. Law enforcement in Oregon has thousands of cases in which powers of attorney have been used by unscrupulous relatives to misappropriate the life savings of an elderly family member.

Sunday, November 22, 2009

The suffering of the dutiful daughter

Nursing homes, adult foster homes, and assisted living arrangements are the public face of long term care for the elderly. In the real world, however, most long term care is performed by families. When there are siblings charged with taking care of a parent the duty usually falls upon the eldest daughter. This is statistically true across cultures and across generations. It is true even when a younger daughter or a son might be the more qualified care giver, a fact that often leads to strife among the siblings. In my own family, I have seen a younger daughter chafe under the injustice of seeing her parent and the other children all looking to the older sister for leadership regarding care issues, ignoring the superior capabilities of the younger. It isn't fair, and it isn't likely to change.

More often than not it is the oldest daughter who comes to me to say that the family can no longer handle the pressures of providing long term care. The crises is often the direct result of  increasing levels of dementia in the elder--loss of cognitive ability that makes the elder increasingly incapable of cooperating in her own care. In these cases the daughter faces asking the court to appoint her conservator to take control of the parent's money and use it for the costs of professional long term care. When I explain the process for becoming a conservator, I must also explain the curse of the dutiful daughter.

It is not unusual, I  explain, that the one person willing to stand up and protect the elder ends up hated by everybody. A court proceeding is public, intrusive and embarrassing for the elder. The dutiful daughter--the only member of the family willing to step up and do the right thing--ends up hated by the parent because he or she cannot see through the fog of dementia that the proceeding is meant to help. Other family members turn on the dutiful daughter as they see the parent's money being locked away to be used only for the long term care needs of the elder. Family members who have been using that money as if  it were their own will not be above holding a grudge against the person responsible for bringing the gravy train to a stop.

Relatives, whether or not they be dutiful oldest daughters, seldom refuse to proceed with court action out of fear of the curse, but it is important that they be steeled for it before we sign the papers.

Saturday, November 21, 2009

How useful is a power of attorney in real life?

Most people include a power of attorney as part of their estate planning packet. A power of attorney prepares a person for disability by nominating an agent to take care of financial matters if the principal (the person signing the power of attorney) becomes unable to manage his or her own affairs. I have a power of attorney naming my wife as my agent to take care of my finances if I am too ill to take care of them myself. My elderly mother has signed a power of attorney naming me as her agent in case she becomes disabled and can no longer handle her financial affairs. If the power of attorney works as planned, I will step in when my mother can no longer manage her money and I will make the financial decisions she would have made if she had not become disabled. The power of attorney, a relatively inexpensive document, is designed to save a family the stress and cost of going to court to have a formal conservator appointed. But does this work?

I have struggled with explaining how the power of attorney operates in the real world. I used to tell people that it works on a sliding scale. At the low end of the scale, a power of attorney works nearly every time. In the middle it works about half the time, and at the high end it seldom works. Social service agencies are at the low end. If you are the child of a Medicaid applicant with a power of attorney from your parent, the agency will probably give the document only a passing glance before accepting you as the agent. One of the reasons for this liberal attitude is that you are trying to get money for the elder, not from the elder. Society is not going to leave needy elders homeless, because of some defect in the language of a power of attorney.

I tell people that banks are somewhere in the middle of the scale. If I walk into a bank holding a power of attorney signed by my mother and want to take money from her accounts, my chances of being successful are about fifty-fifty. Banks are unpredictable. One day I might get the money with no problem. Another day, even at the same branch of the same bank, the manager might tell me they have to send a power of attorney to the legal department for analysis. Power of attorneys that go to legal departments often disappear there, never to be seen again.

At the high end of the scale sit brokerages. The chances of me getting into my mother's brokerage account with a power of attorney written by a local lawyer (or worse, a form from Office Depot) are between slim and none. If my mother wanted me to have a power of attorney that would work at her brokerage, she should have signed one of their forms, in their office, in front of their notary. I can't say a brokerage will never honor an outside power of attorney. I will promise, however, that the document will spend a fair amount of time being examined by the brokerage's lawyers before it is honored.

I knew this was how power of attorneys worked, but had a hard time explaining why. Then a Corvallis lawyer named Steven Heinrich put it in a way that I think makes it clear. He once pointed out that a power of attorney is an invitation to agencies, banks, and brokerages to accept the agent as authorized to handle the assets of the principal. Some institutions accept the invitation. Others will not. Government agencies are inclined to accept the invitation; banks accept it now and than; and brokerages most often decline. In the case of my mother and me, neither of us can force her bank or anyone else to accept the power of attorney. She agreed that I can act for her when she signed the document, but that is only half the equation. Only when the bank or other third party agrees to honor her wishes does the power of attorney become truly effective.

So what does this mean to someone planning for disability or worried about the impending disability of a parent. The short answer is that one should not put too much reliance on a power of attorney. It is like a seat belt. It may save your life in certain kinds of crashes, but having it on will not protect you from the consequences of your reckless driving. Planning for disability and death requires a plan, not a document. The power of attorney can be part of a plan, but not a substitute for it.