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Sponsored by:
Elder Law for the Non-Elder Law
Attorney Part II:
Capacity, Guardianship, Fraud & Abuse
Tuesday, February 23, 2016
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Overview
I.
Capacity Issues
II. NY Guardianship Law
III. Fraud and Elder Abuse
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I. Capacity Issues
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Definition of Capacity
Capacity is the ability to receive,
understand and evaluate information,
and to make, communicate,
understand that decision and its
consequences.
What is
Capacity?
Who determines
capacity?
Only judge/jury can determine capacity
Burden of proof is based on type of
action (i.e., contract, will).
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Capacity v. Competence
Medical
Legal
• Only court or jury can make
a determination of legal
capacity in the absence of
law to the contrary
• Assess mental status
• Burden of proof based on
type of action (e.g., contract,
will contest)
• Assess potential for “harm
to self or others”
• Assess ability to perform
tasks Activities of Daily
Living (“ADL”)
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N.Y. Standards of Capacity
Medical
Treatment
Understand & appreciate the
nature & consequences of health
care decisions, including benefits
& risks of and alternatives to any
proposed health care, and to
reach an informed decision [M.H.L.
§80.03(c); N.Y.Pub. Health Law §2980(3)].
Will
Sound mind and memory and
able to comprehend nature &
extent of assets and the natural
extent of your bounty [(N.Y. Est.
Powers & Trusts Law § 3-1.1; In re Estate
Kumstar, 66 N.Y.2d 691, 692 (N.Y. 1985)].
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Standards of Capacity
Contract
Understand the nature and
consequences of the transaction
and make a rational judgment
concerning it [Ortelere v Teachers’
Retirement Bd., 25 N.Y.2d 196 (1969)].
Criminal
Preponderance of the evidence
unable to understand nature &
consequences of proceedings
and to assist properly in defense
[(18 U.S.C. § 4241(d)].
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Legal Standards for
Determining Capacity
• Clients can have capacity to perform one legal function (e.g.,
create a will) and not have capacity to perform another legal
function (e.g., enter into a contract). 500+ different standards
for legal capacity in NY.
• Capacity can be “fleeting” - client may be deemed to have
capacity at one point in the day and not at another (“Lucid
Moments”)
• Capacity includes the ability to change your mind!
“Supported Decision Making” : clients lacking capacity
may still participate in making decisions.
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Effect of Finding Lack of Capacity
• Determination of incapacity results in loss of civil rights and liberties
• Is not conclusive evidence that the individual lacks capacity for any
other purpose (i.e., capacity to dispose of property by will)
• Limited to the “least restrictive alternative” as ordered by the court
• Powers/authority to act may be given by the court to another
person to act on behalf of the “incapacitated person” (may also be
referred to as an “alleged incapacitated person” or “AIP”)
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Case Study: Mr. C
•
•
•
•
•
•
•
Widowed 84 y/o man
Apparently in good health
3 adult children (not living in NY)
U.S. Marine, NYPD Patrolman
$2M in cash, apartment building
w/ commercial space and condo
Monthly income of $10k (SSI, investments and pension)
Passes cognitive test, “good short term memory” but behaves
erratically, doesn’t pay bills, won’t lock doors, is physically
aggressive with son and angry towards children. Phone bills
skyrocket! Picks up new “friends” – strangers on the street and
“seedy” neighbors – to whom he loans $$. Also donates large
amounts to local catholic church. Withdraws vast sums from
bank for lottery tickets.
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Client with Diminished Capacity
Lawyers have an ethical ethical obligation when working with
clients whose capacity for making decisions may be diminished.
NY Rules of Professional Conduct: Rule 1.14 (a)
When a client’s capacity to make adequately considered decisions in
connection with a representation is diminished, whether because of
minority, mental impairment or for some other reason, the lawyer
shall, as far as reasonably possible, maintain a conventional
relationship with the client.
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Client with Diminished Capacity
Lawyer may take protective action when client appears vulnerable.
NY Rules of Professional Conduct: Rule 1.14 (b)
When the lawyer reasonably believes that the client has diminished
capacity, is at risk of substantial physical, financial or other harm
unless action is taken and cannot adequately act in the client’s own
interest, the lawyer may take reasonably necessary protective action,
including consulting with individuals or entities that have the ability to
take action to protect the client and, in appropriate cases, seeking the
appointment of a guardian ad litem, conservator or guardian.
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Communicating with Client
with Diminished Capacity
Representations that are typically simple may be complicated for
elders due to family members/caregivers participation and existence.
NY Rules of Professional Conduct: Rule 1.14, comment [3]:
The client may wish to have family members or other persons
participate in discussions with the lawyer.
The lawyer should consider whether the presence of such persons will
affect the attorney-client privilege.
Nevertheless, the lawyer must keep the client’s interests foremost and,
except for protective action authorized under paragraph (b), must look
to the client, and not family members, to make decisions on the client’s
behalf.
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Declining or Terminating
Representation
Lawyers have an ethical duty to consider terminating client
representation if the client’s capacity unreasonably hinders the
lawyer’s ability to serve the client.
NY Rules of Professional Conduct: Rule 1.16
(c) [A] lawyer may withdraw from representing a client when … (7)
the client fails to cooperate in the representation or otherwise
renders the representation unreasonably difficult for the lawyer to
carry out employment.
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II. NY Guardianship Law
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Guardianship: A Last Resort!
• Guardianship is to be used as a last resort, only when other
available resources are inadequate to meet your client’s needs
• Other available resources:
Power of Attorney, Health Care Proxy, etc.
Family, friends
Adult day care
Supported Decision Making
Geriatric Care Manager, home health aides, companions
Daily Money Manager
Establish joint bank accounts
Establish SNTs
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Types of Guardianship
GENERAL
FOREIGN
• Guardian for personal • Recognizing/enforcing
needs and/or property
foreign guardianships
management
• Adopted in April 21,
2014.
• Heard by Petition in
Supreme Ct
• Uniform Guardianship
& Protective
• Difficult, expensive to
Proceedings
prosecute
Jurisdiction Act
N.Y. MENTAL HYGIENE
N.Y. MENTAL HYGIENE
LAW ARTICLE 81
LAW ARTICLE 83
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MRDD
• Mentally Retarded
Developmentally
Disabled [Pending
legislative changes, S. 4983]
• Heard by Petition in
Surrogate Ct
• Easier, less expensive
to prosecute but of
limited use
N.Y. SUR. CT. PROC. ACT
ART. 17-A
Art. 81 Guardianship
Adversarial proceeding to determine, by clear and convincing evidence,
whether an alleged incapacitated person (“AIP”) lacks capacity to
manage his/her “person” and/or “property”. [M.H.L.§81.02(b)].
Court must determine AIP is likely to suffer harm because AIP is:
1. unable to provide for personal needs and/or manage his/her
property; and
2. cannot adequately understand and appreciate the nature and
consequences of such inability. [Id.]
Sources: N.Y. Mental Hyg. Law §§ 81.02(emphasis added).
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Least Restrictive
Personal and/or property powers granted under guardianship
must be limited to the least restrictive form of intervention.
Mental Hygiene Law §81.16(c)(2)
If the person alleged to be incapacitated is found to be incapacitated
and the court determines that the appointment of a guardian is
necessary, the order of the court shall be designed to accomplish
the least restrictive form of intervention by appointing a guardian
with powers limited to those which the court has found necessary to
assist the incapacitated person in providing for personal needs
and/or property management.
Sources: N.Y. Mental Hyg. Law §§ 81.16(c)(2)(emphasis added).
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Who Can Be a Guardian?
• Preference for family member, if in IP’s best interest [Matter of Beatrice
R.H., 2015 NY Slip Op 06818]
• Priority to person nominated in petition [M.H.L.§81.19]
• Nursing Home – Proposed bill limiting right of health care facilities
to commence Art. 81 proceedings if primary purpose is bill
collection [S4642-A, A-6510-A]
• Foreign guardianships - Recognition of guardianships estab. in
other states [M.H.L. Art. 83, Adult Guardianship and Protective Proceedings Jurisdiction
Act]
• Qualifications – individual 18+ y/o, not-for-profit corp., social
services official, or public agency authorized to act in such capacity
which has a concern for IP, corp. authorized to act with respect to
financial affairs, community guardian program [M.H.L.§81.19]
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Art. 81 Process
• Filing petition and OTSC
• Exempt from redaction rules 22 NYCRR 202.5(e) as in
effect 1/1/2015
• Check specific court rules!
• Court appoints attorney for AIP and Court Evaluator [M.H.L.§ 81.09]
• Hearing attended by AIP and Court Evaluator; burden of proof
on petitioner
• Within 28 days of signing OTSC [M.H.L. §§ 81.07(b), 81.13]
Sources: N.Y. Mental Hyg. Law §§ 81.01, et seq.; 22 NYCRR 202.5(e)
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Art. 81 Process (Con’t)
• Order and Judgment issued setting forth action to be taken with
respect to AIP’s person and property, limits on authority of guardian
and interested parties, actions taken with respect to AIP’s POA and
health proxy, guardian’s compensation and commission
• Guardian’s commission
• Demonstrates completion of guardianship training
• Obtains bond (if required)
• Must file regular reports (“90 day report”, “Annual Reports” for
review by a “Court Examiner” appointed by the court [M.H.L. §§
81.30, 81.31]
• Compensation determined by order of the court
Sources: N.Y. Mental Hyg. Law §§ 81.01, et seq.; M.H.L. §§ 81.25, 81.27.
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Getting Paid
• Part 36 of the Rules of the Chief Judge
• Governs certain fiduciary appointments (i.e., guardians, their
counsel, assistants, attorneys for AIP, secondary appointees) [22
NYCRR § 36.1(a)]
• Regulates who court may appoint by providing a list of
qualified applicants for each category of appointment [22 NYCRR §
36.3(c)], and requiring the court to make all appointments from
appropriate list [22 NYCRR §36.2(b)(1)]
• Exemption - Even if an appointment is in a category where Part
36 applies, person/entity may be exempt under circumstances
set forth in § 36.1(b).
• Private guardians, counsel – Affirmation/Affidavits of Legal Service,
all subject to court approval!
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Guardianship Resources
New York Court Help - Guardianship
http://www.courts.state.ny.us/courthelp/Guardianship/index.shtml
New York Guardian Assistance Network
http://www.nycourts.gov/ip/gan/
Resource Directory for Guardians
https://www.nycourts.gov/ip/gan/manual/index.shtml
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BREAK
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III. Combating Fraud and Abuse
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Fraud and Abuse
• The elderly are classified as a “vulnerable population” susceptible to
undue influence (Elder Justice Act, Pub. L. No. 111-148, 124 Stat. 119, Subtitle H, §§
6701-6703 (Mar. 23, 2010))
• Elder abuse: an intentional act or failure to act by a caregiver or
another person in a relationship involving an expectation of trust
that causes or creates a risk of harm to an older adult.
• Can take various forms (i.e., physical, sexual, emotional or financial
abuse; neglect; exploitation; abandonment.)
• Financial abuse includes any illegal or improper use of a vulnerable
adult's funds, property, or assets (e.g., misuse of authority, breach of
fiduciary relationship, undue influence, theft, identity theft, fraud &
misrepresentation).
Sources: Elder Justice Act, Pub. L. No. 111-148, 124 Stat. 119, Subtitle H, §§ 6701-6703 (Mar. 23, 2010).
“Elder Abuse Surveillance: Uniform Definitions and Recommended Core Data Elements, National Center for Injury Prevention and Control, Division of
Violence Prevention (available at http://www.cdc.gov/violenceprevention/pdf/ea_book_revised_2016.pdf).
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Case Study: Brooke Astor
• Anthony Marshall (son, deceased 2014)
convicted of swindling millions of dollars from
philanthropist mother Brooke Astor, who died
after suffering from Alzheimer's disease.
• Convicted of changing her will to steal $185M,
named himself executor, changed trust
beneficiaries, eliminated charitable remainder
trust, transferred responsibility for real estate
tax and costs of sale to his benefit in the
amount of $2M.
• Convicted of grand larceny and other charges
related to the attempted looting of his
mother’s assets.
Source:Brook Astor’s Son Guilty in Scheme to Defraud Her, NY Times,10/8/2009, http://www.nytimes.com/2009/10/09/nyregion/09astor.html?pagewanted=all&_r=1&
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Elder Abuse Indicators
• Social and physical isolation
• Family members/caregivers restrict the elder’s contact with others
• Elder is not given the opportunity to speak with others without
presence of the family member/caregiver
• Unkempt or dirty appearance
• Unexplained injuries
• Agitation, trembling, confusion and/or disorientation
• Confusion about finances and transactions
• Emotional distress
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Why Elder Abuse is Hard to Identify
• Often goes unnoticed - pattern of abuse often includes physical and
social isolation of victims, usually takes place without witnesses.
• Victim may be unable to speak out due to dementia or other
impairments, and may not be believed if they do.
• Victim feels ashamed, embarrassed, guilty, especially if abuser is a close
relative
• Victim is afraid that the abuser will get “in trouble”.
• Victim is worried that they will be forced to live in a nursing home.
• Be in denial that abuse is occurring, or unaware that what is happening
constitutes abuse or neglect.
• Be afraid that the abuse will get worse if they report it.
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Elder Abuse Assessment Tools
• Speak privately with client
• Note demeanor, responses,
reactions
• Make client comfortable - air,
water, food, light, limit noise
and distractions
• Ensure client has appropriate
glasses, hearing aids or other
assistance needed to
participate in the dialogue
• Excuse interested parties when
executing documents
• When asking questions, use less
threatening language (e.g., use
term “mistreatment” instead of
“abuse”)
• Develop a plan for client to
contact you independently for
follow up
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Ethical Obligation to Report?
• Although an attorney is always under an ethical obligation not to
perform services that will “prejudice or damage the client” [NY Rules of
Professional Conduct 1.1(c)(2)], NY attorneys are NOT mandated to report
elder abuse; all disclosure of abuse to police or law enforcement, APS
and other government agencies is voluntary.
• Therefore, lawyers and similar advocates must be alert and attentive
towards detecting abuse, and proactive in reporting.
• APS officials are mandated to report to law enforcement if they have
“reason to believe that a criminal offense has been committed”
against any of their clients. [N.Y. Soc. Serv. Law, Art. 9B, §473(5)].
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Reporting and Attorney-Client
Privilege
Disclosure of elder abuse to a third party does not necessarily
violate attorney client privilege.
N.Y. Rules of Professional Conduct: Rule 1.14
(b) When the lawyer reasonably believes that the client has diminished
capacity, is at risk of substantial physical, financial or other harm unless
action is taken and cannot adequately act in the client’s own interest,
the lawyer may take reasonably necessary protective action…
(c) While taking protective action pursuant to paragraph (b), the lawyer
is impliedly authorized under Rule 1.6(a) [confidentiality] to reveal
information about the client, but only to the extent reasonably
necessary to protect the client’s interests.
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Ethics Conclusion
• The declining powers of the elderly and their dependency on
family members / caregivers present complex ethics issues for
elder law practitioners.
• Few bright-line ethical rules.
• Lawyers practicing elder law must proceed with extreme caution
on issues of representation and keep a sharp eye out for the
possibly conflicting interests of those around the elderly client,
the lawyer included.
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Fraud and Abuse Resources
• Federal Trade Comm’n, Bureau of Consumer Protection:
http://www.ftc.gov/bcp/index.shtml
• Consumer Financial Protection Bureau:
http://www.consumerfinance.gov/
• American Bar Ass’n, Comm’n on Law and Aging:
http://www.americanbar.org/groups/law_aging/publications.html
• AARP Scams and Fraud Page: http://www.aarp.org/money/scamsfraud/
• Elder Financial Protection Network: http://www.bewiseonline.org/
• National Association of Area Agencies on Aging: http://www.n4a.org/
• National Center on Elder Abuse: www.ncea.aoa.gov
• U.S. Government Accountability Office:
http://www.gao.gov/products/GAO-13-140T
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Weiss Law Group, PLLC
Mira B. Weiss, Esq.
425 Madison Avenue, Suite 901
New York, NY 10017
[email protected]
(646) 395-3851
Chelsey B. Axel, Esq.
425 Madison Avenue, Suite 901
New York, NY 10017
[email protected]
(646) 395-3851
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