More formality may be better with intergenerational households

As elder law attorneys, our clients have presented us with many difficult situations involving adult children or grandchildren who live in their houses. Sometimes a child has run into some hard times and sees the parent’s home as an economical option; the child may move into his parent’s house along with his spouse and children. Sometimes the child just never became self-sufficient and never made any plan to move out. The adult child may or may not be disabled. Sometimes the expenses are being shared to a degree, but often the parent pays for most of the expenses. The parent may be wrestling with a feeling of obligation, and the child may have a feeling of entitlement. The child may feel that they are “taking care of the parent,” yet the actual need for care or the work being done may be imprecise and doubted by others in the family.

The longer the arrangement lasts, the more difficult it can be for the parent to move on. The dynamic can really change when there are other children who are upset at the arrangement. The parent’s financial security may get on edge. Things can particularly blow up when the parent has to hire a caregiver or wants to sell the house in order to downsize or move to assisted living or nursing home.  How can all of these competing interests be managed? How will the house be sold, and where will the child go?

Aging parents who are still supporting their adult children may want to do some careful planning. They need to consider what will happen to them if they need their funds for care but their child is counting on all of that ongoing financial support. There are many issues to consider. Should they charge actual rent? Should there be a written lease that specifies that occupancy only continues of the occupancy fees are paid? Should they put restrictions on the child’s behavior so that the parent’s peaceful residence isn’t disturbed? A parent may want to put a provision in his or her Will that allocates some extra amount for the dependent child so that at the parent’s death, there are extra funds for relocation. By putting protective provisions into the estate plan, the parent may be able to provide better protections than counting on other family members to honor the parent’s verbal “wishes.” It may not work well to just assume that the whole family will be able to work out an agreement to support the dependent one after mom or dad passes on.

At some point, should the parent insist that the child move out, but agree to pay for the alternate housing for some period of time? What if the house is going to be sold. Does the parent want to give the child written, enforceable rights to remain in the house for a certain amount of time under certain terms & conditions if the parent dies or moves out? How will that impact the parent’s well-being, or the ability of their Executor to wrap up the estate after death? Will the child need a new guardian or life care planner?

Call us for legal advice on developing a family well being plan … 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 

Court limits ability of Adult Protective Services to enter a home without court order

In a recent decision involving a lawsuit against the Adult Protective Services (APS)  office of the Bergen County Board of Social Services, the Appellate Division held that without a court order or warrant for entry, or “exigent circumstances,” an APS employee could not enter the home of the elderly or disabled person who was allegedly subject to abuse or exploitation if consent to entry was not granted. Despite the broad authority granted to APS to investigate cases of alleged abuse or neglect of disabled and cognitively impaired adults in the community, the Court held that constitutional Fourth Amendment protections apply to these investigations.

The case arose out of an intrafamily dispute concerning two elderly brothers (Emil and Fred) who were business partners. As the business was being dissolved, the attorney-in-fact for Fred stepped in to act on his behalf with respect to the business. Emil’s family member then filed a report of exploitation  with APS, who commenced an investigation and came into the home on five occasions over objections by Fred and his Agent under Power of Attorney.  Finding Fred to be mentally incapacitated at that point, APS initiated guardianship proceedings [which can be both intrusive and expensive]. Eventually, Fred sued Emil and his family for damages for invasion of privacy and other harm, and sued APS under 42 USC 1983 for damages for violation of his 4th amendment constitutional rights. The trial court dismissed all counts, but the Appellate Division reinstated the claim against APS. The case is  Rizzo v. Bergen County Bd.  of Social Services, N.J. Super. App. Div. (per curiam) (37 pp.). As with all “unpublished” court decisions, the decision is non-precedential and is not binding on other courts.

The New Jersey Adult Protective Services Statute authorizes the agencies to investigate cases of alleged abuse, neglect or exploitation, including self-neglect, of individuals over age 18 who reside in  the community, are physically or mentally disabled and have cognitive impairments that adversely impact their ability to live safely and decisions to protect their interests. Complaints are kept confidential and investigation files are confidential unless court proceedings are initiated. The APS agency has broad authority to initiate a court petition for protective proceedings to prevent, mitigate or remedy clear and imminent harm. A person who makes a good faith complaint may enjoy a  “qualified immunity” against suit for damages.

The 4th amendment to the US Constitution says that: “The right of the people to be secure in their persons, houses, papers, and effects, against unreasonable searches and seizures, shall not be violated, and no Warrants shall issue, but upon probable cause, supported by Oath or affirmation, and particularly describing the place to be searched, and the persons or things to be seized.”

The NJ counterpart is in Article One, paragraph 7, and says: “The right of the people to be secure in their persons, houses, papers, and effects, against unreasonable searches and seizures, shall not be violated; and no warrant shall issue except upon probable cause, supported by oath or affirmation, and particularly describing the place to be searched and the papers and things to be seized.

In this case, the Court found that exigent circumstances didn’t exist that could have authorized the warrantless entry and search. Since  there was no consent, no court order and no emergent circumstances, the warrantless entry violated Fred’s protected constitutional rights, and the lawsuit for damages could proceed under “Section 1983.”

Call us about legal issues involving guardianship and power of attorney …. 732-382-6070

Texas is trying out Supported Decision-making as an alternative to guardianship

The law allows a Court to appoint a legal guardian for a person who is incapacitated. An Incapacitated Person is defined in NJ as someone who by reason of mental illness, intellectual disability, physical illness, physical disability, chronic drug or alcohol use, or other cause, “lacks sufficient capacity to govern himself and manage his affairs.” Since we are dealing with the functioning of an adult human mind, “incapacity” is not always simple to determine, and can depend on the functional task in question. There are a wide range of decisions that a person needs to make on a daily basis. Some decisions have great impact on the person’s health and survival, and others don’t. Limited guardianship remains an option. Now,Texas has taken a bold step and has enacted a law (S-1881) called the Supported Decision-Making Agreement Act. We have previously blogged about supported decision-making as an aspirational idea. Since guardianship results in a loss of rights and liberties, supported decision-making may provide a workable less-restrictive alternative.

At its heart, supported decision-making is a contractual arrangement between two parties — one being the party who needs help with major decisions, and the other being the party who agrees to provide that assistance. Here is the Texas form for such an agreement.supported-decision-making-agreement-texas-form-oct15

As with any contract, there must be a “meeting of the minds” as to what is intended and expected, what each party’s duties are, how they will communicate, and how they will resolve disputes. The more detailed the written agreement, the better, because ambiguity leads to misunderstanding, confusion and chaos. There must be a framework for carrying out the decisions. Presumably, the party who needs assistance retains the right to sign legal documents. And there may still be a need to provide a broad power of attorney that could be used should the individual ever become truly “incapacitated” and require a surrogate decision-maker. 

Meanwhile, keep an eye on Texas to see how these new arrangement work out.

Call us to prepare estate plans and powers of attorney to protect you for the future … 732-382-6070

The system puts a heavy burden on applicant to prove Medicaid eligibility

In A.T. v. Division of Medical Assistance and Health Services (unpublished non-precedential decision, Appellate Division of Superior Court, 2015, WL 7421647), a Medicaid application was denied for failure to provide requested verifications of assets. The applicant’s grandson (DT) was her Agent under Power of Attorney (“POA”), and his father ST was the alternate Agent. The application was initiated by one of them. Both ST and DT received a Verification Form from the County Board of Social Services on three separate occasions that asked fort a litany of additional information. The court sustained the denial, holding that failure to provide the documentation impeded the Board’s ability to determine whether certain assets were available to A.T. or not.

An application for Medicaid requires 5 years’ of financial records, including deeds, copies of cancelled checks, and sometimes even old receipts or credit card statements. Generally, an Agent under a Durable General Power of Attorney should have the authority to request and obtain all of the needed records from third parties even if those records are considered confidential under other laws. It’s a huge job and its a real pity when a qualified applicant gets turned down because some of the papers haven’t been produced. Although it can take 6 months or more before a complete application is actually reviewed in some counties, the minute the applicant or their agent receives the letter asking for better proofs, they need to jump on it because the agency typically provides a very short window of opportunity, like 10 days.  Then what happens is that the applications get denied if this deadline passes.

What if the applicant is incapacitated and has no agent under power of attorney and no legal guardian? Sometimes the party presenting the application is the nursing home, or is the next of kin who is authorized to file a Medicaid application under Medicaid law, but lacks legal authority under other law to actually demand copies of confidential records from banks etc. Not only are the assets inaccessible, but there may be no authority to get access to the historical records for purposes of the 5-year look-back. In a situation like that, the applicant’s representative needs to remind the agency that there is nothing accessible so the person is eligible for conditional benefits because the law requires that benefits be provided. The representative can then ask an attorney to file an appropriate type of legal suit to get authority for production of necessary records.

Call us for advice on Medicaid applications, appeals, guardianship and protective arrangements … 732-382-6070