Preserving Your Wealth in a Down Economy

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NYS Coalition for the Aging NYS Association of
Area Agencies on Aging
Hoarding Finding A Way Out- Legal Issues -
Louis W. Pierro, Esq.
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Safeguarding Seniors

• Protection from Financial Abuse
• Protection from Mental and Physical Abuse
• Appointing individuals to carry out wishes of the
  individual
• Making financial decisions
• Executing terms of an estate plan
• Making health care and end of life decisions

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Use of Estate Planning Documents

• Sound Estate Planning protects
• A seniors finances - appointing trusted
  individuals to act as fiduciaries
• -(POA, Trustees, Executors under Will)
• Provides plan for gifting while senior is still
  alive
• Provides plan for how assets will pass to next
  generation

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Use of Estate Planning Documents

• Sound Estate Planning also protects those
  assisting the senior to carry out his/her wishes
• Provides a set of directions for the fiduciary
• Empowers the selected person to act
• Can permit fiduciaries to make gifts to
  himself/herself if it is part of the estate
  plan
• Dont have to excluded an agent from plan, if
  serving under POA

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Caring for Aging Family Members

• WHO will make decisions?
• Family Member, Friend, Trusted Advisor
• Surrogate Decision Makers
• Role of Advance Directives (POA, HCP)
• Role of Guardianship
• Role of Trusts

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Durable Power of Attorney

• What is it?
• A legal document which allows you to grant
  another individual authority to transact business
  or manage your assets.
• POA law and form changed in New York as of
  September 1, 2009, and September 12, 2010.

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New Durable Power of Attorney

• Why Did they Create It?
• -Perceived financial abuse under the old POA
  form
• -Easy for unscrupulous individuals to have
  senior sign POA with unlimited gifting, then
  avail themselves of seniors estate
• -Not just paid caregivers, but often family who
  thought they deservedthe money

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POA Changes

• Must use new form after September 12, 2010
• -Old forms no longer effective
• Any POA properly executed prior to 9/12/10 still
  granted full force and effect
• Why?
• -Prevent abuse under POA
• Opportunity to appoint individual(s) to monitor
  agent under POA

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POA Changes

• Specific opportunity to revoke or keep prior POAs
  in existence
• Signing new POA automatically revokes ALL prior
  POAs, so must specifically draft modifications to
  keep old POAs in place, including to IRS, NYS Tax
  and Finance, etc.
• Provides opportunity to compensate agent under
  POA
• Separate Statutory Major Gifts Rider for
  gifting

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Changes Agent Acknowledgement

• Contains specific statement to agent outlining
  duties
• (1) act in principals best interest
• (2) avoid conflicts of interest
• (3) no comingling of funds
• (4) must maintain detailed records of all
  transactions
• (5) guidance in how to sign as agent under POA
• (6) how to resign
• Agent must then SIGN in front of notary that
  agent understands and acknowledgesthese duties

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Changes Gifting Authority

• Separate Statutory Major Gifts Rider (SMGR) to
  POA for gifting
• If individual executes POA after 9/1/09 and no
  SMGR, then NO AUTHORITY TO GIFT ANY AMOUNT TO
  ANYONE
• Ability to make annual exclusion gifts even
  removed from POA unless SMGR executed
• Still have authority to modify language to fit
  clients specific needs
• MUST fill in specific types of gifts and specific
  individuals or classes of individualsto grant
  gifting authority

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Changes New Signing Requirements

• New Durable Power of Attorney
• Principal must initial more affirmative
  statements than prior POA
• Agent(s) must also sign and acknowledge in
  presence of a notary (major change)
• Statutory Major Gifts Rider
• Principal must initial additional affirmative
  statements
• Principal must sign in presence of notary and 2
  disinterested witnesses

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Health Care Proxy

• What is it?
• An appointed health care agent is authorized to
  make medical decisions for you if you become
  incapacitated or incompetent
• Instructions are provided to guide your agent,
  including end of life decision making (Living
  Will)

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Health Care Proxy Updates

• Inclusion of HIPAA Language
• Agent under HCP authorized to act as HIPAA
  representative
• Optional Anatomical Gift Notice
• Witnessed statement regarding donation of organs
  and/or tissue
• No age limits on organs and tissue

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New HCP For Mental Illness

• Persons with mental illness may cycle in and out
  of competency and may have periods of paranoia or
  delusions
• Provides opportunity for directions on types of
  treatment, preferences for specific treatment
  facilities, suggestions about successful past
  treatments
• Recommended that principal hand-writes wishes, so
  they are recognized as his/her own notes and not
  something others are trying to implement

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Mental Capacity

• Does individual have mental capacity to
  execute Advanced Directives?
• If yes, then sign
• Health Care Proxy or HCP for Mental Illness
• Power of Attorney
• If no, then pursue Guardianship

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Guardianships

• Can make a broad range of financial and personal
  decisions on behalf of an incapacitated person
• Personal Decisions
• Routine and major medical and dental treatment
• living arrangements educational and training
  opportunities
• Application for government benefits including SSI
  and Medicaid

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Guardianships

• Court Proceeding - litigation
• The determination of whether to appoint a
  guardian is discretionary and rests upon a
  two-pronged analysis
• The petitioner must establish that the
  appointment is necessary to provide for the
  personal needs and/or property management of the
  AIP (MHL 81.02(a)(1).
• The petitioner must establish that the AIP either
  agrees to the appointment or that the AIP is
  incapacitated as defined in MHL section 81.02(b).

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Guardianships

• Article 81 of Mental Hygiene Law
• - Supreme Court proceeding
• - Utilized with any individual (aged, dementia,
  any disability) who may be incapacitated or
  consents and is in need of support
• Specifically tailored to needs of individual
• More complicated more players more expensive

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Special Needs Trusts

• A guardian can set up a Special Needs Trust which
  will allow a trustee to hold the person's assets
  for his or her benefit without compromising
  Medicaid eligibility.

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Preventing Abuse and Neglect

• Use of Health Care Proxy and POA to arrange
  health care
• Agents may decide
• Care at home vs. care at institution
• Which home care agency or staff to hire
• Which assisted living, rehabilitation or skilled
  nursing facility can be trusted with loved one

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Preventing Abuse and Neglect

• Is there a perfect health care solution? No
• There are pros and cons to both
• Home Care and Institutional Care Settings
• - Who runs the agency/institutions?
• - Who hires, trains and supervises care staff?
• - Who is really looking out for the patients
  best interest?
• Ex. Northwoods lawsuit

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Family Health Care Decision Act

• Governor Patterson signed law creating the Family
  Health Care Decision Act
• Effective beginning June 1, 2010
• Amends Public Health Law, Mental Hygiene Law and
  Surrogates Court Procedures Act
• Enables family members and others close to an
  incapacitated person to make health care
  decisions in accordance with certain procedures
• Does NOT replace Health Care Proxy or Living Will
• Includes end of life decisions
• Does not grant authority if individual always
  lacked capacity to make decisions Article 17-A
  still controls

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Trust Estate Litigation Common Causes

• Challenges to the Plan
• Lack of Capacity
• Fraud, Duress and Undue Influence
• Revocation of a Will
• Prenuptial and Postnuptial Agreements

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Trust Estate Litigation Common Causes

• Serious Deprivation of Rights
• Article 81 of the NY Mental Hygiene Law requires
  that a hearing be held at which the alleged
  incapacitate person (AIP) is present. (MHL
  81.11(a), (c))
• Determination of incapacity is based on clear and
  convincing evidence. (MHL 81.12(a))
• The burden of proof rests on the petitioner.

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Hoarding Cases

• Stratton Cooperative, Inc. v. Anne Fener (211
  A.D.2d 559 621 N.Y.S.2d 77 1995 N.Y. App. Div.)
• accumulation of newspapers and debris in
  respondent's apartment causing a health and fire
  hazard
• Remedy under article 81 of the Mental Hygiene Law
  allowed for the appointment of a guardian ad
  litem for the limited purpose of assisting with
  the clean-up

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Hoarding Cases

• Matter of Florence Linden-Rath (188 Misc. 2d
  537 729 N.Y.S.2d 265 2001 N.Y. Misc)
• Landlord sought permission to sue her Guardian
  based upon a notice of termination of residential
  tenancy
• Guardian applied to permanently stay the
  termination of the tenancy
• Since condition of apartment improved since
  appointment of Guardian and periodic visits by a
  housekeeper and the Guardian, the court
  determined that the accumulation and housekeeping
  issues were not a nuisance
• Court granted the application to permanently stay
  the termination of the tenancy and denied
  permission to sue the Guardian

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Hoarding Cases

• Matter of MURRAY F. (2005 NY Slip Op 50562U 7
  Misc. 3d 1011A 801 N.Y.S.2d 237 2005 N.Y.
  Misc.)
• Self Help Community Services was appointed
  Guardian
• The guardian attempted to set up essential heavy
  duty cleanings of the apartment but were thwarted
  - refused access to their apartment
• Guardian rented storage units and moved much of
  the salvageable material that Mr. and Mrs. F.
  wanted to keep there.

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Hoarding Cases

• Mr. Mrs. F. remained in control of funds, did
  not pay the rent or stay current on many other
  bills
• Guardian encountered tremendous difficulty in
  trying to gain control over Mr. and Mrs. F.'s
  money to assist in bill paying
• Guardian fought off eviction, facilitated in
  finding doctors who take their insurance plan,
  established budget to live within their means

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Hoarding Cases

• Mr. F. repeatedly complained about Guardian and
  sought to have replaced with a distant relative
• Thought replacement Guardian would not be as
  involved and let Mr. Mrs. F. resume destructive
  behaviors
• Court Ruled that although Mr. Mrs. F. might
  continue to complain, it was a no win situation
  and Self Help would remain as Guardian

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Questions?
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Thank You!
Pierro Law Group 20 Corporate Woods Blvd. Albany,
NY 12211 P 518-459-2100 F 518-459-2200 1-866-95
1-PLAN www.PierroLaw.com