Transcript Charitable Gifting

ASSISTING INCAPACITATED ADULTS AND THEIR
SURROGATE DECISION-MAKERS
WITH GUARDIANSHIPS AND CONSERVATORSHIPS
Bancroft May 28, 2014
Bancroft May 28, 2014
Jane M. Fearn-Zimmer, Esq.
Rothkoff Law Group
425 Route 70 West
Cherry Hill, NJ 08002
[email protected]
WEBINAR AGENDA
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Increase awareness of degrees of legal capacity
Increase awareness of how deficits in capacity are treated
by the law
Increase knowledge of legal mechanisms for surrogate
decision making (i.e., powers of attorney, guardianships and
conservatorships), review fundamental concepts, terminology
and balancing policies
Increase awareness of, and review best practices for,
assessing when a client may require surrogate decision
making
Increase awareness of difference between guardianships in
New Jersey versus Pennsylvania
A guardianship may be indicated if:
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A client does not have a legal representative and you think she
lacks decision making capacity.
A client does not have a legal representative, is unable to
make decisions, and needs immediate assistance with medical
or financial decisions.
A client does not have a legal representative, may lack
decision making capacity and is being exploited.
A client has a legal representative who is making decisions
which appear contrary to her expressed preferences or best
interests.
A guardianship may be indicated if:
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A client has a power of attorney, but the document lacks
specific powers (gifting, asset protection planning, psychiatric
treatment).
A client has a legal representative/guardian but you believe
the client is capable of making at least some of her own
decisions.
A client has legal representatives but the legal representatives
do not communicate and cannot work together effectively.
A client lacks capacity and requires asset protection planning
to pay for her long-term care or obtain Medicaid eligibility.
Case Study: Guardianship
Ms. A is a 68 year old widowed female, with a history of bipolar disorder, diagnosed
in her twenties. She resides at home. She is also diagnosed with arthritis, hypertension
and gait instability. She comes to your office, dressed more brightly than usual and in
very good spirits. She is happy to share that she has a male visitor staying with her,
while she helps him to get back on his feet. She is proud to have invested $20,000 to
help him start a restaurant. She denies being sexually involved with him. She also has
been having a great time, going to Atlantic City to the casinos, where she keeps on
playing, even though she does not have good luck, because “You never know when you
might win big.”
Clinical History – history of Bipolar disorder
Screening - When screened for cognitive impairment using the Montreal Cognitive
Assessment (MoCA), she scores 23 points out of 30, missing 4 points on
visuospatial/executive domain, 1 point on attention, 2 points on delayed recall, for
below normal range of 26/30.
Legal Concepts
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Capacity
 Limited
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capacity versus no capacity
Legal Mechanisms to facilitate Surrogate-Decision
Making
 Powers
of Attorney
 Guardianships
 Conservatorships
Legal Concepts
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General durable Powers of Attorney
 Flexible
 Durable
versus springing
 Requires capacity
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Where no or limited capacity – Guardianship (legal
procedure to appoint a surrogate decision maker
by a judge)
Conservatorships – capacity, court oversight
Continuum Model of Capacity
Full Capacity
Partial Capacity
Total independence
Total Incapacity
Total dependence
Capacity – Types
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Capacity refers to an individual’s specific ability to
carry out a specific action, understand the nature
and consequences of a decision, and to
communicate an informed decision.
 Medical
capacity/informed consent
 Testamentary Capacity
 Financial capacity
 Driving capacity
 Capacity to perform IADL’s/ADL’s
Capacity - The standard
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Presumption that all adults have capacity unless
judicially determined incapacitated.
 Probate
Court (NJ) versus Orphan’s Court (PA).
 Related concepts that are NOT the same:
 Involuntary
commitment
 Lack of competence to stand trial
 Determination by MD that patient is unable to give informed
consent.
Capacity - The standard
 Why
do we have a presumption of capacity as a
default setting?
 Public
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policies
individual autonomy
de-institutionalization
disability rights movement
 Potential
pitfalls
Financial exploitation/financially and physically
independent
 Financial exploitation/neglect/abuse – physically
dependent
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Evaluating Capacity in Older
Adults
Capacity
Assessment Guidelines/Available Instruments
Medical decisions
Assess 4 domains of capacity: understanding, appreciation,
reasoning, and expression of choice.
MacCAT-T, CCTI
Every day decision
making, Perform
IADL’s
Structured assessments of functional abilities (Kohlman Evaluation
of Living Skills) and executive function (Executive interview)
Screen for Self-Neglect.
Financial decision
Self reports, informant reports may be inaccurate. Financial
Capacity Instrument (FCI) may more accurately access financial
knowledge, skills and judgment.
Driving
Monitor patients with mild cognitive impairment, early dementia
Consider formal driving evaluation skills
Testamentary
capacity
Understand nature and extent of their property, and the natural
objects of their bounty
Voting
Competence Assessment Tool for Voting (CAT-V)
Capacity Assessments
Cognition
Assessment Guidelines/Available Instruments
Attention
Measure of attention necessary, without this, all other results are
invalid. Can be drastically impacted by anxiety/depression.
Focused or selective, sustained (Digit Span), divided, alternating.
Executive functioning Volition and awareness, planning and execution, monitoring,
inhibition and sequencing of actions, problem solving, abstract
thought. Clock drawing tests, Trail Making test Part B, Wisconsin
Card Sorting.
Language
verbal fluency, letter and category (semantic fluency), timed
test, within 1 minute, name as many items as possible.
Conversation, MMSE
Memory
STM vs. recognition, speaking in generalities
Visuospatial
functioning
Determine depth and distance, critical in navigation, driving
difficulties, getting lost
Psychomotor speed
apraxia of speech, dysarthria
Capacity Assessments
Cognition
Assessment Guidelines/Available Instruments
Psychological
Aspects of Stroke
Depression and anxiety, disinhibition/impulsivity, agitation,
aggression, not sleeping, not eating, delirium/dementia
Mood measures: Hospital and Depression Scale, Geriatric
Depression Scale, Stroke Aphasia Depression Questionnaire
Capacity - The Legal Standard
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Lack of capacity - total deprivation or suspension of
the ordinary powers of the mind
 Judge
must make specific findings of fact by clear and
convincing evidence – N.J.S.A. § 3B:12-24.1(b)
 AIP person suffers from illness or deficiency AND is so
unsound that he is incapable of governing himself and
managing his affairs – N.J.S.A. § 3B:1-2
Factors a Court May Consider in Determining
Whether there is Capacity:
 Unable
to govern self/manage own affairs
 Lacks ability to independently understand information
needed to make informed decisions
 Lacks realistic understanding of nature and extent of
impairment
 Limited or no ability to plan independently for the
future
 Limited or no ability to protect self from
exploitation/undue influence
 May fluctuate (UTI/depression/alcohol abuse)
Guardianship Tips – Capacity
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In the Matter of Robert Cohen, an alleged
incapacitated person, (N.J. Super, App. Div., Docket
No. A-5852-08T2 4/4/11) – Age 83, diagnosis of
Parkinson’s Disease, ambulation and speech
deteriorating, dysphagia, did not use telephone. No
finding of incapacity. Guardianship denied.
Guardianship Tips – Capacity
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In the Matter of Susan Keeter, an alleged
incapacitated person, (N.J. Super, App. Div., Docket
No. A-0553-10T4 5/11/11) Age 89, dementia,
uncontrolled diabetes, oriented to time and place,
but could not copy a simple shape. Mild signs of
cognitive impairment and functional deficits. No
finding of incapacity. Guardianship denied.
Guardianship Tips – Capacity
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In the Matter of T.S., (N.J. Super, App. Div., Docket
No. A-5852-08T2 4/4/11) – Age 83, ambulation
and speech deteriorating, dysphagia, did not use
telephone. No finding of incapacity. Guardianship
denied.
Unless they endanger themselves or others,
competent persons retain the right to make bad
choices.
Practical Issues
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Fiduciary duty of court-appointed guardian
 Duty of loyalty, duty of care, duty to avoid self-dealing
 Duty to act in best interests of the alleged incapacitated
person
 Duty to account/periodic reporting requirements
Accessing the courts can be expensive, slow
Waiver of training requirements for family members
appointed as guardians
Failure of courts to effectively monitor guardian’s reports
Guardianships
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Limited versus Plenary
 Least
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restrictive alternative
Guardian over a person can be bifurcated from
guardianship over the property
Temporary emergency guardianship
Steps in the guardianship process
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Medical certifications
Complaint and Order to Show Cause
Court appointed attorney
Hearing and Judgment
Continued Jurisdiction of the court
Guardianship Tips
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Appointment of a guardian for an AIP under the
Uniform Veterans Guardianship Law – N.J. Rule of
Court 4:86-9
Appointment of a guardian for an AIP receiving
services from the DDD – N.J. Rule of Court 4:86-10
 Affidavit
of CEO or medical director of the Division of
Developmental Disabilities program
 Affidavit of physician or psychologist Special medical
guardian N.J. Rule of Court 4:86-12
Rights versus Civil Liberties
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Rights that can be removed/restricted
 Bear
arms, marry, job, drive, vote, travel, select your
leisure activities and companions
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Rights that can be given to a surrogate
 Enter
into contract, sue and defend, apply for public
benefits, manage property, choice of residence,
activities, medical decisions
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Rights that cannot be exercised without court order
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commitment, sell house, divorce
Case Study: Limited Guardianship
Mr. D is a 27 year old, unmarried male, who sustained TBI,
radiculopathy, post-concussive syndrome and PSTD, secondary to
a MVA. He resides at home and exhibits cognitive impairment
and emotional labiality. He is unable to keep a daily schedule
without cuing and assistance. He has difficulty communicating, and
making eye contact. He is frequently angry, unable to manage his
finances or understand medical issues. He is unable to resume his
former employment as an auto mechanic. A legal action has
been brought to recover for his injuries in the MVA, and a
settlement has been obtained. He is expected to continue to incur
costly medical care for the rest of his life due to his injuries from
the MVA.
Case Study: Conservatorship
Mrs. G is a 94 year old widowed female, with a history of bed sores, who is
recuperating from a fracture and wears an immobilizer. She requires 24/7 assistance
with transfers, bathing, dressing, and toileting, secondary to the fracture and her
physician recommended admission to a rehabilitation facility while her fracture is
healing. Despite this recommendation, at her own insistence, she is being cared for in
her own home by a friend who she says she pays $125 cash weekly, for 24/7 care.
She is prescribed Percocet for pain management. She was given a script for an x-ray,
but at the time of a follow up appointment, the x-ray was not taken and the
immobilizer, which she is wearing, is bent. Recently, her bank has reported that she was
seen with her caretaker on a bank security video cashing a check for $6,000 cash.
When confronted with the $6,000 outflow from her bank account, she says that
someone is stealing her money. However, she later explains the $6,000 payment to her
friend as being for “several week’s care.” When visiting nurses are scheduled to see
her, she is usually found sleeping, after having recently been administered pain
medication. APS is called to the house, she is awake and oriented x 3, and she refuses
to enter a facility and insists on remaining at home.
Temporary Emergency
Guardianship
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Health Insurance Portability and Accountability Act
(HIPAA) privacy requirement
 Protected
health information
 Health
information
 Individually identifiable health information
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HIPAA exceptions
 Disclosure
to Adult Protective Services
 Temporary emergency guardianship applications
 Subpoenas
Asset Protection Planning through a
Guardianship
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Why Plan for Public Benefits
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Veteran’s Benefits
Medicaid
N.J.S.A. § 3B:12-49 – authorization to plan for public assistance
programs
In re Keri, 181 N.J. 50 (2004) – Medicaid spend down through a
guardianship may be approved where the plan:
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does not interrupt or diminish an incompetent person’s care
involves transfers to the natural objects of the person’s bounty
does not contravene an expressed prior intent or interest
clearly provides for the best interests of the incompetent person AND
satisfies the law’s goal to effectuate decisions an incompetent person
would make if she were able to act.
Asset Protection Planning through
Guardianships
 In
re Trott, 118 N.J. Super. 436, 440 (Ch.Div.1972) –
authorized a guardian to carry out an estate tax
gifting program involving a $100,000.00 transfer
followed by periodic annual gifts within the federal
annual exclusion amount.
Asset Protection Planning
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The Trott factors:
Possibility of restoration of competency is virtually
non-existent based on the mental and physical
condition of the AIP
AIP’s assets remaining after proposed gifting are
adequate for AIP’s HMS, given her life expectancy
and of health
Proposed donee is the natural object of the AIP’s
bounty
Asset Protection Planning
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Proposed transfer will reduce AIP’s anticipated
death taxes
Lack of any substantial evidence that the AIP, as a
reasonably prudent person, would, if competent,
not make the gifts proposed in order to effectuate
a saving of death taxes.
Asset Protection Planning
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In re Macak, 871 A.2d 767, 377 N.J. Super. 167
(App.Div. 2005) – contains dicta that once the court finds
that the Trott criteria are met, the guardian should be
authorized to execute a Medicaid plan.
J.P. v. Division of Medical Assistance and Health
Services, 392 N.J. Super 295 (App. Div. 2007) –
approved a special needs trust as a “legitimate
Medicaid planning vehicle.”
Asset Protection Planning
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L.M. v. Division of Medical Assistance and Health
Services, 140 N.J. 480 (1995) pursuant to the
equitable distribution order, the wife was the sole
owner of the pension, and that the pension income
could not be considered “available” to the husband
for Medicaid eligibility purposes.
Asset Protection Planning
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I.L. v. Division of Medical Assistance and Health
Services, 2004 WL 47444411 (N.J. Admin. 2004),
rev’d, 2005 WL 4684709 (Jan. 27, 2005), rev.,
389 N.J. Super. 354 (App. Div. 2006). The
Appellate Division concluded that the cash values of
her life insurance, while theoretically accessible to
I.L. through an appointed guardian, were not in fact
accessible until the guardian’s appointment.
Asset Protection Planning
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H.K. v. Cape May County Board of Social Services,
379 N.J. Super 321 (App. Div. 2005). Support
order did not render the wife entitled to an
increased community spouse allowance under
Medicaid where an alimony payment was not
evaluated on the merits by the Superior Court ….
and will not be binding upon the Director in terms
of the [Medicaid] community spouse allowance
calculation.”
Asset Protection Planning through
Guardianships
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Matter of Labis, 314 N.J. Super 140 (App. Div.
1998) In Labis, the guardian-wife of her
incapacitated husband applied to the court for
permission to transfer her husband’s interest in the
marital home to her for purposes of Medicaid
planning. After concluding that “[a]n effort should
be made, in the public interest, to preserve some of
[the ward’s] assets, in some way to make it possible
to repay a portion of the public expense in
supporting the incompetent,” the lower court denied
the application.
Acknowledgments
Stebnicki, Ball, Tarvydas, “Ethical Aspects of Guardianship: New Perspectives and
Frontiers,” Sponsored by the Rehabilitation Counselor Certification and The University
of Iowa’s Institute on Disability and Rehabilitation Ethics (I-DARE), available online at
http://eo2.commpartners.com/users/crcc/downloads/140401_Presentation_Slides.pd
f
Dunn, Hauptman, “Ethical Issues in Geriatric Psychiatry, “FOCUS The Journal of Lifelong
Learning in Psychiatry, Vol. XI, No 1., 62-69 (Winter 2013).
Moye, Marson, Edelstein, “Assessment of Capacity in an Aging Society,” American
Psychologist, Vol. 68, No. 3, 158-171 (April 2013).