Garn-St. Germaine Act protects families against certain mortgage acceleration

Home mortgages typically have a mortgage acceleration clause, called a “due on sale” clause. This is a clause that says that the mortgage becomes due and payable if the property is sold or transferred to another individual without the lender’s prior written consent. There is a federal law that prevents lenders from applying that clause when the homeowner transfers their property to their spouse or children. It’s known as the Garn -St.Germaine Depository Institutions Act of 1982, which is in the U.S. Code of laws at 12 USC.1701j.

Section d. specifies the situations in which a lender may not enforce the due-on-sale clause. The exemptions that are most relevant for elder law and estate planning are these:

(d) Exemption of specified transfers or dispositions  …. (3) a transfer by devise, descent, or operation of law on the death of a joint tenant or tenant by the entirety; (4) the granting of a leasehold interest of three years or less not containing an option to purchase; (5) a transfer to a relative resulting from the death of a borrower; (6) a transfer where the spouse or children of the borrower become an owner of the property; (7) a transfer resulting from a decree of a dissolution of marriage, legal separation agreement, or from an incidental property settlement agreement, by which the spouse of the borrower becomes an owner of the property;  (8) a transfer into an inter vivos trust in which the borrower is and remains a beneficiary and which does not relate to a transfer of rights of occupancy in the property …. “

There are times that transferring the ownership of residential property makes good sense for asset protection purposes. No transfer should be made without legal advice, as there are so many considerations to take into account. For example, can the new owner in the family pay the mortgage? if not, who will pay it, and is that person going to be making ongoing gifts to the new homeowner, or is there some other legal relationship at play? But it’s good to know that there is this protection available when there’s a mortgage on the property. Preferably, the Deed itself should make reference to the mortgage that’s on the property at time of transfer.

Call us for advice on asset preservation planning and real estate transfers … 732-382-6070

New SEC rule could protect vulnerable adults from exploitation

There is a fine line to tread when a concerned person observes what appears to be financial exploitation of a person with cognitive impairment. Under the law, an adult is presumed to be “competent” unless and until a Court has entered an Order declaring him or her to be incapacitated. As dementia develops, there can be a long distance between the onset of impaired judgment with impaired resistance to suggestion, and the point of actual incapacity.

Third parties who interact with the customer — such as people working in banks and brokerages,  insurance agents etc. — may observe disturbing behavior. They may observe that their customer is now accompanied by somebody who seems to be telling them what to do or is doing the speaking for the customer. There may be a sudden new pattern of  changing the title or beneficiary of assets. These observations can put the financial professional in a tricky position. Reporting is optional, not mandatory, for such professionals under the New Jersey Adult Protective Services Act, N.J.S.A. 52:27D-409. ” 4.a.(1) A health care professional, law enforcement officer, firefighter, paramedic or emergency medical technician who has reasonable cause to believe that a vulnerable adult is the subject of abuse, neglect or exploitation shall report the information to the county adult protective services provider.      (2) Any other person who has reasonable cause to believe that a vulnerable adult is the subject of abuse, neglect or exploitation may report the information to the county adult protective services provider.”

Recently, the SEC adopted new FINRA rules (Financial Industry Regulatory Authority) designed to give some tools to financial professionals who are seriously concerned about these kinds of problems. The rules will become effective February 5, 2018. FINRA Rule 2165 is called Financial Exploitation of Specified Adults. It allows members to place temporary holds on disbursements of funds or securities from the accounts of specified customers where there is a reasonable belief that financial exploitation of these customers is going on. In addition, two amendments to FINRA Rule 4512 (Customer Account Information) now require members to make reasonable efforts to obtain the name of and contact information for a trusted contact person for a customer’s account. Many readers may have received such notices from your investment managers.

We have been involved in cases over the years where the first person to realize that something suspicious was going on was a banker or investment manager. Those alerts let to the placement of court-ordered protective arrangements which safeguarded the assets and protected the individual against further exploitation. The new rules should prove to be a helpful “arrow in the quiver” towards preventing financial exploitation of aged and infirm people in our communities.

Call us to discuss elder care planning and litigation …….. 732-382-6070 

What to do when you think it’s time to refuse further treatment

If you are the Guardian of the Person or the designated Health Care Representative for a person who is extremely mentally incapacitated, there may come a time that you may face that most dreadful of decisions. You may wonder whether to treat all new medical crises. The person you are responsible for may have advanced Alzheimers or other dementia, may be incapable of expressing themselves, or may be functionally incapable of interacting in a knowing way or performing any physical act without assistance. This is a delicate matter. There are intertwining considerations of law, bioethics and even religion, and a heavy burden is placed on the health care decision-maker.

These decisions aren’t necessarily restricted to the ones involving life-preserving measures like installation of a gastric feeding tube, pacemaker, or respirator (ventilator), or decisions about whether to embark on kidney dialysis or performing major surgery such as a liver transplant or non-laporoscopic heart valve replacement. You may be faced with decisions about whether to hospitalize an incapacitated  patient for a new medical problem when the patient already has advanced and debilitating congestive heart failure or has become severely impaired by numerous complications of diabetes such as peripheral neuropathy, or extreme vision impairment. You may be wrestling with whether to subject the patient to chemotherapy or radiation treatment for newly-diagnosed cancer.

It is important to have a frank conversation with the primary physician who coordinates the care for the patient. What should be the overall goal for care at this point? If the underlying chronic conditions will never get better and will certainly continue to get worse, is it time to just keep the patient comfortable and as pain free as possible in their bed, and avoid hospitalization? Anecdotally, I have been told by nurses who have years of experience with patients who have long-term advanced dementias that they observe patients experiencing  disassociation and disorientation  each time the patient is hospitalized, and they report that although the treatment stabilizes the patient  for a short time, there may be no no overall improvement in the underlying degenerating condition . The health care decision-maker often feels that their patient is suffering as s/he goes through a new round of  tests, tubes, needles  and exams. Yet there is a natural assumption that if a person has a degenerating condition which periodically flares into a medical emergency (such as congestive heart failure or COPD), each new episode should lead to hospital admission for acute care.

If your patient is living in a nursing home, have a frank discussion with the treatment team, especially the nurse and doctor who have who primary responsibility for the patient. I have attended such meetings with my clients over the years, and they are difficult but important. Ask about how to obtain a Do Not Hospitalize (DNH) order and what it would cover. For instance, a fracture may need to be set outside of the nursing home. Find out about the broad array of comfort treatment that can be provided within the nursing home such as IV antibiotics and oxygen. Ask the doctor about issuing a DNR (do not resuscitate) order in the chart.  Make sure that the patient is never sent to the hospital without your advance notice and consent. Make sure that the treatment personnel do not give the patient any legal forms to sign. And complete a green POLST form for the chart which sets out your wishes for the goals of the patient’s care.

For advice and advocacy in carrying out your role as surrogate medical decisionmaker, call us at ….732-382-6070

Thwarted by HIPPA rules? Persevere.

Protected health information can’t be  disclosed to anyone but the patient or the patient’s authorized recipients.  If you are the court-appointed Guardian of an incapacitated person, or you are a designated Agent under a Health Care Proxy or Health Care Power of Attorney, you may have encountered roadblocks in trying to get access to the records of the person you are acting for.  These protections of confidentiality were always a matter of common law but were explicitly set down in the Health Insurance Protection and Portability Act of 1996, usually called “the HIPPA Law.” The law allows the patient to sign a HIPPA-compliant records release. The law also explicitly states that a Guardian is an authorized recipient, and that the designated Health Care Proxy/ Agent/ Representative is an authorized recipient. Nonetheless, even if you are authorized, you may hit roadblocks getting access to the medical records of the incapacitated person.

I encountered this recently and I have to say it was just maddening. I have been  the Legal Guardian [of Person and Property] for a certain individual for about 15 years. Two months ago he had a serious injury and was admitted to the hospital. The patient has been in that hospital before and I thought that my guardianship record had been placed on the chart. Arriving at the hospital on the weekend without my guardianship certificate, I discovered that they could not check the prior charts, and of course would give me no information. At 7:30 Monday morning, I faxed up the guardianship certificate with a request that the nurse or doctor call me. By mid-day  I had heard nothing and when I called in I was told that those faxes go to a central fax room and don’t get delivered right away [though I had faxed it to the direct line at the nurses’ station]. This whole process had to be repeated and finally a day later I was able to have a telephone meeting with the treatment team. Then he was back in the hospital, and on arrival at the hospital a few mornings later the floor nurse wouldn’t allow me to review the patient’s chart, citing HIPPA, and I had to again provide the certificate because they still hadn’t actually entered this critical information into the patient’s chart.   Even with that it took several conversations until the nurse was persuaded that I had authority to not only see the chart but to make the decisions and sign the Consents to Treatment. When the patient was discharged to an outside  subacute facility, the hospital didn’t provide this guardianship information with the transfer paperwork and I had to start it all over again. When he went back to the hospital, a new chart was being created and again, they found no record of my guardian status. Start again.

The usual Health Care Power of Attorney appoints a decision-maker to make the medical decisions if the doctors determine that the patient is incapable of giving informed consent. A good document will also say that its effectiveness is not diminished by the mere passage of time, and it will also grant HIPPA access to information. However, if the patient isn’t incapacitated, the patient may still have to sign a new HIPPA authorization in order for the treatment team to be willing to share information with you. That wouldn’t install the person as surrogate decision-maker at that point, but it would give them access to necessary information in order to be able to assist the patient to make decisions about treatment. Here is a downloadable PDF of a HIPPA-compliant form which we provide to all of our estate planning clients. HIPAA FORM.

The moral of this story is: (1) always bring the original guardianship certificate or health care power of attorney to the health care facility with you, (2) get an updated guardianship certificate one a year so that it is reasonably current; (3) if you are the health care proxy but your person isn’t mentally incapacitated, ask him or her to sign a medical release authorization and place it in the chart so that you can have access to information.

Call us for legal advice concerning the appointment of health care representatives and functioning as a guardian or power of attorney ….. 732-382-6070