RE-THINKING POWER OF ATTORNEY LITIGATION

I begin with a rant.  Power of attorney litigation is the worst.  I am not talking here about the kind of litigation where there is an actual financial predator who has obtained a power of attorney through fraud and stolen money from a vulnerable person.  That is properly a matter for the courts and the kind of case I derive great satisfaction in pursuing.

I am talking about the kind of power of attorney dispute where the sole issue is whether Johnny or Jane should act as attorney for property and personal care for their parent.

The usual fact pattern begins after the first parent dies.  In the aftermath of Dad’s death, the entire family realizes how much Dad’s involvement had been masking Mom’s dementia symptoms.  It becomes immediately apparent that Mom is struggling on her own – burning things on the stove, losing her license after a minor car accident, missing appointments, and having trouble with word finding.

Jane is the Responsible One.  Jane was always the straight-A student, the rule follower, and the one her parents leaned on most in their senior years.  Jane has a Big Job and a busy life with all the typical Type A supermom activities.  Naturally, when her parents did their estate and capacity planning 20 years ago while both were well, Jane was selected as the attorney for personal care and finances.

Johnny, by contrast, was not successful in any traditional sense.  He doesn’t have regular work, went through an ugly divorce such that he has no full-time parenting responsibilities, and suffered from a substance use disorder from which he has recovered.  He has no financial security and does not own a home.  As mothers do, Mom adores Johnny.  Jane and Johnny do not get along.

Johnny moves in with Mom, which works for both of them. Mom spent the last 40 years of her life making this house exactly the home she wanted.  Each knick knack is precious to her.  She loves having Johnny around.  Jane, however, sees Johnny’s care as substandard.  In her view, Mom is not getting bathed or showered enough, Mom is spending too much time watching TV and not enough time doing enriching word puzzles. Jane read about the optimal Alzheimer’s diet and laments the processed food Mom and Johnny seem to be relying on. Mom’s nails and hair, which had always been immaculate, are dirty and unkempt.

As the attorney for personal care and property, Jane decides it would be best for Mom to move to a state-of-the-art memory care facility.  Mom is happy living in her home with Johnny and doesn’t want to go.  Jane believes that Mom is just not capable of making that decision anymore and ignores Mom’s pleas. Desperate, Mom sees a lawyer (she has no license, so Johnny takes her there) and signs new powers of attorney naming Johnny as her new attorney for personal care and property.

Jane lawyers up.  Her lawyer tells her that because the new power of attorney documents were prepared when mom had dementia, a Court could find them invalid and then she would go back to being in charge.  Johnny also gets a lawyer.  Eventually, a judge also appoints a section 3 lawyer for Mom.

From Mom’s perspective, things become a nightmare.  She reads pages of deeply embarrassing affidavit content drafted by Jane’s lawyer, including anecdotal evidence about the time that she couldn’t make it to the bathroom on time and had an accident at church, another about the traumatizing time she got lost.  The affidavit evidence contains photos to show how dirty her hair is, how long her toenails are, and the spoiled food in her fridge. She feels an overwhelming sense of shame and embarrassment.  She feels like every visit from Jane over the last few months was a trick designed to capture embarrassing video and photo evidence for Jane’s court case against her.  The next time Jane comes to visit, Mom tells Johnny not to let Jane in.

The legal fees in these types of cases are breathtaking because lawyers take over all communications between Johnny and Jane, who no longer speak.  Every petty grievance or detail of Mom’s life is aired out through letter exchanges between lawyers charging hundreds of dollars per hour.

For the price Jane is paying her lawyers, she could have paid for Mom to have weekly manicures and pedicures, twice-weekly blow-outs, a meal delivery service, weekly visits to the spa, and an Alzheimer’s day program a couple of times a week.  But instead, Jane is obsessed with proving that her brother is a deadbeat getting “free rent” by staying in Mom’s house with her. Jane wants to be back in charge, and she wants a judge to confirm that she is the Good Daughter and Johnny is a Very Bad Son.  By the point that they get to mediation, both sides have incurred tens of thousands of dollars in legal fees.

The legal fees then become the impediment to resolving the legal dispute.  I have mediated many of these cases where the parties are able to resolve all the important issues – where Mom will live, what type of caregiving supports she will have – but the sole remaining issue is each side’s belief that the other side should pay legal costs. Having settled, it would be difficult to get a judge to decide the costs issue independently because the judge doesn’t have context to award costs to one side or the other without delving into all the issues that are now settled.  In many cases, the fight continues and more costs are incurred just because neither side will cave or compromise on costs.  And in a sad number of cases, the parent dies while the litigation is still unresolved.

Estate and capacity litigators, we need to find better ways of dealing with these issues. In my experience as section 3 counsel for many “Moms” in these cases, not once has the parent said to me, “I am so glad Jane brought this court case to get me the care I need.”  Universally, the parent caught in the middle of the dispute says, “I love both my children equally. I want them to get along and I want this litigation to end.”  To them, the litigation feels “stupid” (a direct quote from a section 3 client), embarrassing, damaging and incredibly stressful.  In my next series of blogs, I am going to share some ideas about how we might change our approach to these kinds of disputes.

 

Angela Casey

Nothing contained in this post constitutes legal advice or establishes a solicitor-client relationship. If you have any questions regarding your legal rights or legal obligations, you should consult a lawyer.

COUNTING ON YOU: TIPS FOR KEEPING ACCOUNTS AS AN ATTORNEY OR GUARDIAN OF PROPERTY

Choosing to act as an incapable person’s attorney or guardian of property is a considerable and important responsibility. Part of that responsibility is keeping a clear record of all money coming into and leaving the incapable person’s hands. Pursuant to section 32(6) of the Substitute Decisions Act, attorneys and guardians of property are required to keep accounts of all transactions involving the property of the incapable person.

It is important for guardians to maintain accurate, thorough accounts for several important reasons. First and foremost, keeping proper accounts is a part of a guardian’s fiduciary duty to the incapable person and the legislation requires that you do so. Second, keeping thorough accounts can protect you from personal liability if you are required to pass your accounts. Third, the guardian’s compensation is tied directly to the incapable person’s receipts and disbursements.

Below are some helpful tips for guardians and attorneys keeping accounts:

1.     If possible, speak with the grantor of the Power of Attorney prior to that person becoming incapable. Discuss their wishes, assets, and where they are keeping their will. Continue these conversations after you begin acting as an attorney or guardian and encourage your loved one to participate, to the best of his or her abilities, in your decisions about their property.

2.     Review the Power of Attorney document. Often the Power of Attorney will stipulate whether there are any limitations on how you can manage the incapable person’s property.

3.     If you are a guardian for property, you must follow the court-approved Management and Guardianship Plans. If any material change is required to your Management Plan, you should prepare an amended Management Plan and submit it to the Public Guardian and Trustee for approval.

4.     Locate and review the incapable person’s Will. If property is specifically gifted in a will, it cannot be sold unless it is necessary to care for the incapable person.

5.     When you are named guardian or begin acting as an attorney, make a list of all the incapable person’s assets (whether solely or jointly owned). Assets include real estate, money, securities, investments, motor vehicles, other personal property, etc.

6.     Keep a record of all transactions you make on the incapable person’s behalf. It is important that you keep a copy of all receipts and bank statements. These can be maintained in a binder, or scanned into an electronic folder regularly. If maintaining these digitally, ensure that your files are backed up.

7.     Keep the incapable person’s financial accounts and transactions completely separate from your own.

8.     Consult regularly with the incapable person’s supportive family members and friends about decisions that you make with respect to the incapable person’s property.

9.     Most importantly, the incapable person’s comfort and well-being should guide each decision that you make with respect to their property. You are required to exercise your fiduciary duties diligently, with honesty and integrity, and in good faith for the incapable person’s benefit.

10.     You have a right to seek advice and direction from the court to deal with questions about your obligations, and the incapable person’s legal rights. This is not meant to displace your duty to make tough decisions as a substitute decision maker, but to provide you with judicial guidance in complex situations.

 

Rebecca Suggitt

 

Nothing contained in this post constitutes legal advice or establishes a solicitor-client relationship. If you have any questions regarding your legal rights or legal obligations, you should consult a lawyer.