Guardianship is difficult for many families. It is especially difficult for those who are just competent enough to realize they are losing much of their autonomy yet not competent enough to carry on their own affairs. So it is even more unthinkable that many guardians every year take advantage of vulnerable seniors and prey on their trust and weakness. As with all forms of greed, the facts tend to show that the greater the wealth, the greater the likelihood of abuse. Here are just a few ways that guardians abuse their wards.

Creating New Estate Planning Documents

Some guardians will have the incompetent person sign powers of attorney or wills and trusts designed to leave everything to the guardian. Typically the goal is to avoid courts, so trusts and powers of attorney – especially property powers – are the most common. One would think ethical attorneys would never participate in helping a guardian do this, but sadly there are many unscrupulous attorneys who have no problem doing so.

Undervalued Liquidations

Many guardians may need to liquidate tangible property to prepare a house for sale after the ward enters a nursing home or must downsize. They tell their wards, and often the families, that they had a certified appraiser review the tangible property, and the value is $25,000. While family may be quite shocked, they often do not question such an official and certified appraiser. Then, the guardian makes contact with potential buyers from liquidation companies who buy estate property. They in turn buy all the goods, load them into a truck and haul them away. The money is paid, and all seems well. Sadly, what was hidden from the appraiser was $100,000 worth of collectibles and family heirlooms.

Allowing Foreclosures or Other Losses

Any guardian who pays himself before the mortgage is committing a grievous error and is indeed committing fiduciary abuse. However, this is sadly quite common. Even some well-trained professional guardians have allowed homes to be foreclosed and vehicles to be repossessed so that they could ensure their own payment. They do not make diligent efforts to negotiate payments or reduce the impact of financial harm.

Manipulating Incompetency

It seems crazy to believe that in this day and age doctors would falsify a diagnosis of Alzheimer’s disease or other mental impairment. However, guardians often doc-shop, looking for a favorable diagnosis so that they can remain in power over an affluent incompetent person. There is also the chance of misdiagnosis. Sometimes a guardian will take the ward to dozens of doctors. Eventually, as with any professional opinion, if the person does have even the smallest infirmity, there is a chance a doctor will agree that the person has limited capacity. They get a report, and voila, they now have what they need to justify continuing guardianship.

When a guardian is in place for a loved one, family members should remain diligent and routinely ask for an accounting and inventory of assets, funds, and tangible property. If at any time a guardian refuses, contact an elder law attorney immediately.

New York’s Attorney General, Eric Schneiderman, unveiled a sweeping Fraud Control Unit designed to target healthcare providers who abuse the Medicaid system. According to the AG’s website, they are continuing to add dozens of prosecutors and investigators to keep up with reports and investigations. Nursing homes throughout the country are largely paid by Medicaid funds. To stay profitable, nursing homes must remain at near full occupancy. This often means cutting corners, refusing to transfer residents who need critical care or higher levels of care, and even billing for services that are not (or cannot be) provided. Below are just three simple examples of Medicaid fraud in nursing homes.

Billing for Services Not Rendered
When a resident goes to a skilled nursing facility, the resident and his or her family typically sign a contract and apply for Medicaid. At times, the application takes some time to be approved, but once it is, the money begins flowing to the nursing home, paying for whatever services are billed. There are fairly strict rules on what the facility can bill for and how much they are paid.

Nursing homes are only paid a fraction of their regular charges. Say the actual room charge is $8,000 per month, Medicaid may pay only about $1,500 to $3,000. Usually it is only a small fraction. So, nursing homes do anything they can to ensure they get every penny. Some will bill for a private room, when in truth the resident shares a room with 4 other residents who themselves all pay for private room as well. Nursing homes may also report that a resident is receiving a gait belt to help with mobility or other assistive devices, when in reality such devices are being share among an entire floor of residents, each being billed as having the same expensive device.

Medications Not Being Administered

As horrible as it sounds, some nursing homes have even stooped so low as to report the administration of medications to residents when no such medications are given. The way this little scheme is done is the nursing home will “ration” meds by giving patients less critical medications every other day instead of daily. Or, perhaps that does that requires 3 times per day will become 2 times per day. When spread over time, they save a lot of medicine by again sharing the same medication across the population and yet still billing as though all patients received appropriate doses.

Physician Extenders Being Overused

In the past 10-15 years, we have seen a real surge in the use of nurse practitioners and physician’s assistants. And for the most part this is a cost savings for the public. However, some nursing homes use these “physician extenders” to bill as though the physician had actually visited. To explain this a little better, each nursing home must have a medical director – a doctor who oversees care. That doctor does not typically stay on the premises but is required to visit and see patients at certain intervals, and he or she also consults with the nursing staff to ensure more critical issues are properly addressed. However, some facilities will allow the nurse practitioner to fax treatment records and orders to the physician, who in turn signs them without ever seeing the patient. Then, since the care appears to have been provided by a physician, Medicaid is billed at a different rate than if billed for just the nurse practitioner’s bill was generated.

Given the recent attention paid to fraud by New York’s Attorney General, nursing homes should be careful. When selecting a nursing home, be sure to do your homework and review state complaints and investigations. You can also discuss the decision with an elder law attorney to learn more about quality homes in your state.

This is a continuation of a post from last week where we discussed careers where retirement can be enjoyed longer and happier. In addition to nurses and teachers (analyzed previously), others include:

Military
Now this one may come as a bit of a surprise, given the highly stressful and life-threatening nature of the occupation. However, studies repeatedly indicate that military service members retire younger than their peers and receive some of the best lifelong benefits available to such young retirees. For instance, an enlisted soldier who joined at 18 is generally eligible to retire at just 38. With that retirement comes free enrollment in lifelong health benefits called CHAMPUS, a steady pension, and the ability to start a second career early in life.

Some retired service members choose to go into state or local government, such as police officers, postal employees, or other federal jobs. These individuals have the opportunity to “double-dip” by purchasing credits for their prior service. This means possibly getting two retirement checks by the time the rest of us get one. Beginning around 2000, the military began instituting a strong anti-smoking policy among the ranks. And while many soldiers, especially in combat arms occupations, still smoke, the rigorous physical training and strong policies favoring cessation programs make smoking much less prevalent than in previous years.

Moreover, the constant physical training leads to healthier lifestyles and better health outcomes. Obesity is practically nonexistent. Unfortunately, many service members are injured, suffer from combat or training related illnesses or medical conditions that make it necessary to leave before retirement. Thus, it may be difficult to paint a completely accurate portrait of lifelong health outcomes.

Farmers & Forestry Workers
This one is strange. Many do not think of farmers as having a career, because it is in many cases a family business, inherited from one generation and passed down through the family. The job, if one can call it that, is more or less a combination of thousands of jobs. Although large co-ops and international corporations have greatly changed the face of farming, those workers who still operate family farms are among some of the healthiest and happiest retirees. Although smoking rates among farmers are still around 30%, obesity is nil, and satisfaction is high. Perhaps it is something about seeing the fruits of one’s labor (pun intended) or perhaps it is simply the amount of time spent outside, but farmers generally do not see themselves as retired. Even once they have done their last year, they still see themselves as a part of a small community for the rest of their lives.

Forestry workers are among the most smoke-free professions, with only about 2% self-reporting that they smoke. This is likely because smoking in state and national forests is strictly prohibited for workers. Likewise, obesity is rare, and overall job satisfaction is high.

Forbes loves to tell us who the happiest workers are, or what the healthiest careers are. But no one seems to talk about post-job satisfaction. While these types of articles are generally highly subjective, we can certainly look at professions that tend to produce happier retirees. Whether these can actually be ranked is another thing altogether.

The following list focuses on just 3 areas of health and satisfaction: smoking rates, self-reported job satisfaction, and obesity rates. Obviously, there are plenty of other areas that play a role in health and happiness, but these are generally good indicators as well.

Nurses
Historically, nurses have always felt a sense of great pride in their career choice. And for the most part, society agrees. When someone says he is a nurse, you’ll generally hear accolades shortly to follow. Further, nurses work in healthcare; they are surrounded with daily reminders to take care of themselves. You would think it might be tough to light a cigarette after watching a cancer patient die. Oddly, however, nurses smoke. A lot of them smoke, in fact. Until recently, studies suggested that as much as 11% of nurses smoked daily.

Fortunately, as of 2011, that number was down to just 7%. So, given the upward trend in health among nurses, this profession is quickly becoming one of the healthiest. Likewise, retired nurses generally report a sense of great satisfaction throughout their careers, many of them even choosing to volunteer in related positions well into their later years.

Teachers
This one should be no surprise. How can anyone be unhappy working just 9 months per year, right? Well, don’t say that near a teacher, but there is something to the logic. While it is difficult to gauge exactly how many teachers smoke, some studies suggest between 10 and 20%. However, this research is dated. Since 2007, organizations like Tobacco Free Kids and the American Heart Association have actively lobbied to prohibit smoking on all public school grounds. In fact, most campuses across the country have now gone “smoke free,” meaning teachers have nowhere to smoke short of leaving the campus. For many, this is enough to end the habit.

Likewise, teachers are on their feet for much of the day and have some of the most liberal leave policies of all American professions. Even in Europe, workers generally may have upwards of 40 paid days of vacation each year. This pales in comparison to a teacher’s 10-week summer, 2-week Christmas, and weeklong breaks for Thanksgiving and Spring Break. This does not even count the sick time and sabbaticals some are offered. So, while the pay may be sub-par in some ways, teachers are among some of the happiest and healthiest retirees. After all, how many professions have “retirement poems?”

John Grisham, internationally recognized author known for writing captivating legal suspense and drama, released a slightly different type of book in 2013. While most of Grisham’s stories center on violent crimes and courtroom battles, Sycamore Row makes a stark departure into the world of probate law.

Sycamore Row begins with the suicide of a wealthy landowner, Seth Hubbard. He drafts a holographic will and instructions for a trusted employee to deliver it to a small town lawyer. Hubbard knows that his will undoubtedly is going to cause a stir and lead to a will contest by his children. After all, he left the majority of this estate to his African American caregiver. The story details the struggles and litigation of the will contest, which seeks to undo his last wishes.

Holographic Wills
A holographic will is one that is written in the testator’s own hand, meaning someone actually sits down and handwrites their wishes. There are cases from the turn of the last century where various odd circumstances led people to do so in very strange ways. For instance, a farmer trapped by a combine and realizing his certain demise drafted his holographic will by using a pocketknife to etch his wishes on the side of the tractor. A court upheld this. Another case from the 1920’s involved a fairly wealthy banker who was mugged and shot in his car. He used a fountain pen to scribble his last wishes on the dash of his car, while he lay bleeding to death.

Not all states recognize holographic wills, however. Precise rules vary by jurisdiction, but the bulk of states do allow some form of holographic will. Some require a witness; some do not. Others do not allow their residents to use them but do recognize such wills if made in a jurisdiction that does permit them.

New York Probate Law
New York probate law does not generally permit holographic wills of any sort with just one limited exception. Under New York law, members of the U.S. Armed forces may make such holographic wills under very limited circumstances. In part, the law provides that each of the following may do so:

1) A member of the armed forces of the United States while in actual military or naval service during a war, declared or undeclared, or other armed conflict in which members of the armed forces are engaged.

2) A person who serves with or accompanies an armed force engaged in actual military or naval service during such war or other armed conflict.

3) A mariner while at sea.

Nevertheless, there are even limitations on these. For instance, a holographic will made by a mariner at sea is only valid for 3 years after it is made. Therefore, the rules are not always cut and dry; therefore, it is always best to consult a qualified elder law estate planning attorney to make such plans long before a situation arises that requires a holographic will. Though fictional, as Sycamore Row demonstrates, will contests can be ugly and expensive. There is no reason for that to be one’s legacy.

Ask any competent attorney for advice, and you will probably get the same answer: it depends! As frustrating as this is, it is for good reason. No two cases are the same, so without all the facts and well-researched law that is focused on those facts, no one can give you a definite answer. Even then, however, there are usually factors outside the attorney’s control that can be very important, such as who the judge might be, which jurisdiction the matter would be in, who is representing others in the matter, and so forth.

When it comes to estate planning, people like to ask the tough questions. One favorite is always, “Can I just get a simple will…nothing fancy, just the basics?” The answer is yes. You can always get a simple will. This does not mean it will do what you intend it to. Similarly, you can also get a “simple” power of attorney. This is just what one woman did in Chicago several years ago.

Background

An elderly widow had a daughter who passed and a granddaughter who she helped raise. She also had another daughter by a much earlier marriage who she barely new. The widow had amassed net assets approaching $10 million. One day, she took her granddaughter to a local office supply store and purchased a will and two powers of attorney “in a box.” The packet was a CD-rom that contained several basic templates that could “customize” one’s estate plan, or so said the box. The granddaughter carefully filled in the blanks and answered the questions, the form fields were populated, and presto: Powers of attorney!

Things went terribly wrong

For about 4 years, the granddaughter took wonderful care of the elderly widow. She cooked for her, bathed her, took her to doctors’ appointments, and was by all accounts a terrific caregiver. The widow began suffering from severe dementia and reached a point where she could not even recall the names of her own family members. The daughter by a prior marriage came one evening and picked her up while the granddaughter was away. She took her to her own home and filed a guardianship case, asking a court to give her full authority to make health care and financial decisions.

Expensive Litigation

Immediately, the granddaughter filed a request that the court deny the guardianship. Her reason? There was already a perfectly valid set of powers of attorney. Upon review, the court found that the powers of attorney were “patently” invalid. On the third page of the powers of attorney, there were long disclaimers about New Jersey and California law that had no applicability to Illinois. Likewise, there were certain powers granted that Illinois law does not permit. Finally, although there were 2 witnesses – one more than even required under the law. There was one fatal flaw, however. One of the witnesses was the granddaughter. Under Illinois law, this made it invalid.

While the box indicated that “Illinois attorneys” created them. Yet, no attorney actually handled the execution of the documents. At the time of signing, the granddaughter failed to understand the nuance of state law. Since the documents were found invalid, a 2-year guardianship battle ensued, tearing the family apart and involving countless hours of in-court litigation. The granddaughter had to testify against her own aunt and vice versa.

Result

In the end, the parties spent over of $140,000 fighting over the estate, the court appointed one person to handle the finances and the other to manage health care concerns. A court-appointed guardian ad litem was awarded $35,000 in attorney fees for his involvement, and the case involved 3 separate trials – one to invalidate the documents, one to decide who should be appointed guardian, and one to decide the award of fees to 5 attorneys involved.

Moral of the Story

A penny saved is a dollar lost when it comes to DIY estate planning without the help of a knowledgeable attorney.

When it comes to deciding how to spend one’s later years, institutional care is nobody’s first choice. However, there are times when family and professional home healthcare are just not enough. Beginning in 2003, a new concept has been sweeping across the country – The Greenhouse Project. These alternative living concepts are unique and offer the greatest possible autonomy for older adults who wish to age in place in a comfortable, home-like environment, while still maintaining high levels of skilled nursing care.

How are Greenhouses different?

Unlike traditional nursing homes, which can hardly be described as “homes,” these dynamic group homes allow groups of seniors to reside together in actual homes that are adapted to provide the required levels of care. In these homes, medical devices are inconspicuously hidden in cozy, discrete cabinets and whiteboards. Residents have separate rooms and share a common area and open kitchen concepts. At times, small pets are allowed. Employees are encouraged to participate in the house’s activities and some even reside with the residents.

Where are Greenhouses?

As of 2011, there were 100 of these homes located throughout America, and there are currently four in New York alone, including one in New York City, one in Cohoes, and two in Rochester. As the movement grows into its second decade, The Greenhouse Project continues to open new homes and offer unique services to seniors. There are even five of these homes dedicated to veterans, located in Illinois, Wisconsin and Alabama.

What do Greenhouses cost?

It seems these homes do cost slightly more than traditional nursing homes; however, according to The Greenhouse Project, Medicaid is accepted, just like any other skilled nursing facility. So, provided one can work with an experienced elder law attorney to protect retirement assets and assure Medicaid eligibility, these homes may be a real option for many older adults.

Are Greenhouses really better than nursing homes?

This is a question only the resident can answer; however, according to The Greenhouse Project’s research studies, resident approval is 97%, bed sore incidents are greatly reduced, and there are roughly 50% less hospitalizations. The Project also touts evidence-based research showing that nearly 60% of residents and their families are willing to pay more for these Greenhouses. Therefore, it is likely at least worth considering whether these types of homes could be a viable alternative for a loved one who needs long-term care greater than what family can provide. Many times, an elder law attorney can assist with early planning to ensure Medicaid eligibility, which can make these homes a reality.

When it comes to powers of attorney, there are two basic types: property and healthcare. The person selected to make decisions is called the agent, and the person granting the authority is called the principle. Property powers of attorney are designed to allow the agent authority to sign documents, open and close accounts, and make many other types of financial decisions for the agent. Healthcare powers of attorney are designed to allow the agent to make medical decisions for the principle. Elderly parents often choose to split these two major responsibilities between two or more of their adult children. While this may seem fair, there are a couple reasons why it may not always the best choice.

Power Struggles

Imagine one adult child, likely the one given healthcare decision-making powers, has very strong opinions about the type of healthcare that should be provided. For instance, perhaps this child wants the very best and most aggressive care available, regardless of cost. Now imagine that the other sibling holds the power of attorney for property and wishes to be as conservative as possible in order to preserve the inheritance and to ensure the money lasts for the parent’s entire lifetime.

While both children may love their parent dearly, the splitting of responsibilities can create a power struggle, whereby one child overuses healthcare to punish the other child for being too conservative, and the other child responds by tightening the purse strings even more, including refusing to pay for what he or she deems unnecessary. These situations almost always result in litigation.

Confusion and Ambiguity

When one adult child or close relative is chosen to act as a person’s agent for all matters – healthcare and property, then there should be no confusion or misunderstanding. The family and all financial institutions and healthcare providers will be on notice that there is one person who is authorized to make decisions. Granted, other people may be selected as “successors” who may act in the event the chosen individual cannot be reached or is unable for some other reason to serve.

However, if more than one person is selected, or if co-agents are selected, healthcare providers may not fully understand their responsibilities. In these cases, physicians often will require both agents to agree on all treatment, or worse yet, they may accept decisions by either agent without considering the specific language or details of the actual documents. Finally, it can cause tension in the family if the agents cannot agree on care or financial decisions. Again, such situations typically result in litigation.

Therefore, rather than naming co-agents or trying to split responsibilities between multiple individuals, it is usually wiser to name one trusted person as the agent for all matters, then name other trusted individuals as successor’s in the event the first person is not able to serve. Of course, as with anything, there are exceptions. Therefore, it is highly advisable to consult an experienced elder law attorney when preparing powers of attorney.

In 2010, John Armstrong, a Mississippi man suffering from severe schizophrenia, delusions and paranoia, killed his mother, Joan Armstrong, by bludgeoning her repeatedly with a brick and stabbing her multiple times in the stomach and chest. Due to his severe mental illness the criminal court found him incompetent to stand trial, and instead he was placed in a psychiatric hospital for lifelong treatment.

What are Slayer Statutes?

Most U.S. states have some version of “Slayer Statute,” which precludes someone from inheriting from an estate if he or she caused the person’s death. Some states vary, however, in how they apply the rule. For instance, in some jurisdictions, the killing must be intentional or willful. In others, even negligent and reckless conduct that causes the death would preclude the person from receiving their inheritance. Texas does not have a slayer statute.

What happens if the “slayer” is incompetent?

In John’s case, his siblings moved the probate court to invalidate John’s share of the inheritance, and the trial court agreed. However, John’s court-appointed guardian ad litem appealed the decision. In 2014, the matter was reversed. Mississippi courts had not previously determined whether a murderer who is declared mentally unfit could be precluded from inheritance triggered by the murder. The appellate court found that because John was not competent to stand trial for murder, this implied he could not have “willfully” committed the murder.

Under that state’s civil code, willful means that the “actor has intentionally done an act of unreasonable character in disregard of a risk known to him or so obvious that he must be taken to have been aware of it, and so great as to make it highly probable that harm would follow.”

Further evaluation needed

According to the Mississippi appellate court, since the civil and criminal codes have different standards for determining intent or willfulness, a separate hearing would be necessary to determine whether at the time of the killing, John actually acted willfully, as required by the civil code. The court further held that “all evidence which will throw any light on the issue of whether or not this killing was willful is competent and admissible.”

New York’s Slayer Statute

Much like Mississippi’s law, New York does not permit one to inherit from somebody they killed. As early as 1889, New York established this broad principle in Riggs v. Palmer that “no one shall be permitted to profit by his own fraud, or to take advantage of his own wrong, or to found any claim upon his own iniquity, or to acquire property by his own crime.” Over the years, this rule has been construed to apply to murder and other intentional conduct.

Many people would still want to provide for their loved one who is suffering from severe mental illness, even if such a tragedy should occur. For those with an heir who suffers from severe behavioral or psychiatric disorders, it may be wise to plan ahead to determine how adequately provide for that heir in the event such a terrible event should take place. Estate planning attorneys can establish special trusts and other mechanisms to avoid such results.

When a business owner passes away, there are inevitably additional concerns for the estate. For instance, should the business be closed, or should the business continue to be operated by surviving family members? How should the company’s assets be distributed among heirs? Experienced New York elder law attorneys can assist in making these difficult decisions and minimize the risk of problems like what occurred in recent Georgia case involving just this situation.

In a recent decision from the Georgia Supreme Court, James Myers, Sr. died, leaving his son, Anthony Myers, as his executor. Unfortunately, Anthony began using estate assets for personal gain, and soon his brother brought an action in the probate court to return the misappropriated funds and to remove Anthony as representative. The Supreme Court found that indeed Anthony had mishandled the estate. The following are some of the important lessons for executors.

The language of a company’s operating agreement or articles of organization control what should happen upon an owner’s death
One of the biggest problems in the case of Myers v. Myers was Anthony’s continued operation of his father’s company, Buckshot Properties, LLC, following his father’s death. James Myers, Sr. was the sole member of the LLC. According to the company’s operating agreement, upon the death of any member of the LLC, the company was to be dissolved and its assets distributed per his will. This means that the company’s assets would be eventually distributed to Anthony, his brother, and his mother, per the terms of the will. Sadly, this is not what Anthony did. Instead, he continued operating the business. The Court found that because the company specifically required dissolution, Anthony had no right to continue operating the business following his father’s death. Therefore, it is important to always obtain the decedent’s business documents and have them reviewed by an attorney to ensure how it is to be handled during probate.

What the executor did amounted to a “conflict of interests,” because he was a fiduciary for the estate
In Myers v. Myers, Anthony made 5 big mistakes that cost him dearly.

1. The executor improperly used the estate’s truck for personal reasons

The law does not permit a representative to use estate property for personal reasons unless he or she compensates the estate. While there are often exceptions to this rule, such as where the will expressly permits it or the court has given permission, an executor should not assume it is okay to use a decedent’s vehicle.

2. The executor improperly used the company’s funds to perform maintenance on the house.

Although one would think it is perfectly fine to use the decedent’s funds to maintain the estate property, this was not the case. Since the business was supposed to be closed, continuing to operate the business and use its funds in this way was improper.

3. The executor failed to pay rent to the estate for using estate property

While no doubt many adult children may feel they are entitled to live in a parent’s house following the parent’s death, this is definitely not always the case. Instead, since the property became an estate asset, Anthony was wrong to use the property for any reason without paying the estate rent.

4. The executor failed to keep accurate records of rent paid to the estate

The decedent owned rental properties, which were managed by his company, Buckshot Properties, LLC. The executor made a critical error by not keeping accurate record of all the money paid by tenants. This made it difficult for the court to determine just how much money should have been in the estate for distribution to the other heirs, and as such, it was improper.

5. The executor used estate funds to pay personal bills

Quite possibly the biggest error Anthony made was misusing the estate’s money. This is a common mistake for surviving heirs and executors. Here, Anthony used thousands of dollars to pay personal bills with his father’s assets. This is almost never acceptable.

The lesson to be learned from the Myer case is that an executor owes a duty to the estate and its beneficiaries to handle the assets with care and keep good records. Once an executor starts co-mingling funds, misusing estate funds, and ignoring his or her responsibilities, there can be unintended consequences, such as years of prolonged litigation against loved ones. While New York probate law may differ from Georgia in many ways, these general lessons should be a constant reminder to follow the law and seek competent counsel early.

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