The Revised Uniform Fiduciary Access to Digital Assets Act

denver elder law

Siennese Door

This is an important development regarding the Uniform Law Commission’s Uniform Fiduciary Access to Digital Assets Act (UFADAA).  I learned that there is a new and revised version of the uniform law which has in the last few days been approved by the ULC.  It is known as the Revised Uniform Fiduciary Access to Digital Assets Act (2015).  In my last post on this topic in May, I described the short-lived history of HB 15-1189, the UFADAA in the Colorado legislature.

In June, yours truly was interviewed, along with Connie Smith of Fairfield & Woods, for the article “Assembling the Digital Legacy” which appeared in Law Week Colorado.  The article, written by Doug Chartier (sorry, no link as it is paid subscription only), described the ever changing landscape of identifying and managing digital assets for the living (as agent, conservator or trustee) or for the deceased (as personal representative).  The article reads a bit like an obituary for the UFADAA, which was enthusiastically presented in nearly two dozen state legislatures but met stiff opposition from diverse groups including (in Colorado) the Colorado Bankers Association and the ACLU.  Only one state has adopted the UFADAA so far and in most states where the legislation was introduced the UFADAA has already been rejected. This over what is broadly termed as “third party privacy concerns.”  The basic concern would be, to give one example, for those with whom the digital asset owner would have communicated – say via email, and whose private and protected information would be disclosed to a fiduciary acting on behalf of another (as defined in the UFADAA, but generally an agent under a POA, a personal representative of an estate and so forth) without the third party’s knowledge or consent.  It isn’t just about reading mail anymore, or emails for that matter!

Here’s a recent article in Forbes magazine about how forgetting to make plans about digital assets like social media can create post-mortem lawsuits.  One of the spot-on observations made in the article was about the difficulties in transferring digital assets and its potential to create unplanned business succession challenges as well as ongoing estate planning difficulties.  Getting back to the Law Week article, both Connie Smith and I agreed that online services for storage of passwords, usernames and other credentials for online accounts (digital assets, broadly defined) are problematic because of the concentration of personal data.  I give my estate planning clients an organizational “letter of instruction” which has a page for these online accounts and other digital assets. At this time I think the best way to maintain this information is in paper format, which can be easily updated on a personal computer and printed out periodically.  And no, you shouldn’t call the document “my online accounts and how to access them,” but maybe come up with something more creative!

In the meantime, don’t forget about making plans for those digital assets.  Here’s a helpful article from the American Bar Association on this topic.  Unfortunately, I wasn’t able to link to the revised version of the UFADAA on the Uniform Law Commisioner’s website – it does not yet appear to be available there.  I have a word version of the revised UFADAA, but haven’t had the chance to read it while comparing its previous version.  I’m sure that will be a topic of a future blog post. . . . !

©Barbara Cashman  2015   www.DenverElderLaw.org

A Probate Judge Finds Same Sex Common Law Marriage in Colorado

Springtime in Italy

Springtime in Italy

 

Last week I received news on a listserve that the Jefferson County District Court, sitting in probate, granted relief to a woman who claimed she was the surviving common law spouse of a decedent.  The two women had cohabited together for many years.  As is common in states recognizing common law marriage, a person claiming to be a surviving common law spouse must file a petition for intestacy and establish that the petitioner was the surviving spouse of the decedent by virtue of proving certain elements of the existence of a common law marriage.  (A surviving spouse who has married or entered  into a civil union with another person already has a certificate which shows this spousal relationship.)  This proof of common law marriage may sound straightforward, but it is not.  Colorado is one of only a handful of states which still recognizes common law marriage.  The trickier issue (which crops up in the dissolution of marriage context) of when the common law marriage began is not often before a court when it makes a determination in a decedent’s estate administration that a person is or is not a decedent’s surviving spouse.  The only salient issue for those purposes is whether the couple was married at the time of the decedent’s death.  This is what the Jefferson County District Court recently determined.  This is distinguished from the marriage dissolution context (in domestic relations proceedings), where the relevant question is when the common law marriage began.

Here’s a redacted excerpt of Judge Lily Wallman Oeffler’s ruling of May 21, 2015 on a Petition for Adjudication of Intestacy and Formal Appointment of Personal Representative:

The Court, having reviewed the Petition and the applicable law, FINDS and ORDERS as follows:

THE COURT FINDS that Decedent and Petitioner MRS. SMITH have satisfied the two elements of common law marriage: 1) the mutual consent or agreement to be married; and 2) a mutual and open assumption of a marital relationship. People v. Lucero, 747 P.2d 660, 663 (Colo. 1987). The couple cohabitated for approximately 30 years, raised three children together, held real property and bank accounts in joint ownership, participated in a marriage ceremony in front of friends and family, recited marital vows, and wore wedding bands.

THE COURT FURTHER FINDS that “the Fourteenth Amendment protects the fundamental right to marry, establish a family, raise children, and enjoy the full protection of a state’s marital laws.” Kitchen v. Herbert, 755 F.3d 1193, 1199 (10th Cir.) cert. denied, 135 S. Ct. 265, 190 L. Ed. 2d 138 (2014). Further, “a state may not deny the issuance of a marriage license to two persons, or refuse to recognize their marriage, based solely upon the sex of the persons in the marriage union.” Id.

IT IS HEREBY ORDERED that, under the ruling in Kitchen, Petitioner is Decedent’s common law spouse, and is qualified and hereby confirmed to serve as the Personal Representative of Decedent’s estate.

So, it turns out that a same-sex couple can “hold out” as a married couple for common law marriage purposes.  Some of the indicia of such marriage will differ from those of an opposite sex couple (e.g., for a same sex couple who wasn’t able to file joint tax returns), but these will not obviously operate as  a bar to a court’s finding of the existence of a common law marriage.  It seems the institution of marriage is, in many respects, alive and well as a result of the marriage equality movement!

So, what exactly is “common law marriage” and why should any of this matter?

Common law marriage is a frontier relic.  England abandoned it in 1753, but it continues on in the states of Colorado, Kansas, Utah, Texas, Iowa, Montana and a couple east coast states.  It isn’t even really “common law” in that it is regulated by statute (except in Montana).

Many of us are celebrating  this important development of the judge’s decision excerpted above, but not without some concerns in the backs of our minds. . .  after all, marriage has evolved and changed over the course of human history and has served a variety of interests including political, economic, diplomatic, religious and other aspects of regulating human behavior and providing stability in the form of certain protections, particularly for children and more vulnerable members of society, which have historically been women.

What about the nature of a relationship between an opposite sex couple who choose not to marry but have children and a long term relationship together?  Are these considerations likely to be similar to those of a same gender couple?  This is one of the places where things get rather complicated.

And here’s another important question – What if the couple does not want to be treated as married and wants to have a relationship that is nonmarital for all intents and purposes – is this likely to be more difficult?

The likely answer to this second question is  a qualified “yes.”  While a straightforward answer to that question may be that the parties can contractually agree to a living together or cohabitation agreement, the ruling above shows the fluid nature of what is deemed to be marriage.  The simple fact that a couple may not want to be considered married for purposes of the law is not conclusive of such arrangement.  In my mind, couples who want to be considered in a relationship of a nonmarital kind can still document their relationship as such and avail themselves of certain limited protections and benefits as a result of such relationship through the use of a pre-civil union statute governing contractual arrangement known as designated beneficiary agreements.  More about that in a later post. . . .

Important to note here is that common law marriage in the U.S. does not, in contrast to many a layperson’s thinking, have a particular minimum time period associated with its existence.  This stands in contrast to cohabitation laws in many other countries such as Canada, where cohabitants are known as “common law partners” and the relationship is governed by a law passed by the Canadian Parliament in 2000 which does make marriage and cohabitation look much more similar.  This is also the case in England, where the Worker’s Compensation Act of 1906 recognized non-marital forms of co-habitation.  The law in England looks  to concern itself largely with the conferring of an economic benefit on the other partner and considers in that context who is appropriate object for the law’s protection.

Nearly three years ago I wrote a couple blog posts about legal and financial considerations for nontraditional relationships and I don’t intend to revisits those now in light of all the U.S. Supreme Court and other important decisions (including the Tenth Circuit’s Kitchen decision cited above) concern same-sex marriage, but as marriage equality seems more within reach, it seems only logical that we should take a look at the bigger picture of marriage in this country and why so many young (opposite-sex) couples choose to have children but not get married.  This development challenges the protections afforded for married couples – should they still be a “monopoly” for them?  Remedies for children and more vulnerable partners are available under contract law, but they are not consistent and vary wildly from state to state.

What about a Colorado couple (married or partners in a civil union) who want to contract away some of their rights arising from the spousal relationship?  Colorado adopted the Uniform Premarital and Marital Agreements Act in 2012 and it applies to agreement entered into after July 1, 2014.  The law is codified at Colo. Rev. Stat. § 14-2-301 et seq.    The new law made important changes regarding access to counsel and other important requirements about how the agreement is reviewed and which affect the waiver of important rights.

So the question remains . . .  how do we predict the future, make informed choices  and otherwise advise clients about what legal obligations are owed to a cohabiting non-spouse and how might this be affected by a burgeoning definition of common law marriage?  Stay tuned!

©Barbara Cashman  2015   www.DenverElderLaw.org

 

Fiduciary Access to Digital Assets – an update of sorts

Italian Wall

Italian Wall

Well, it’s been a while since I’ve written a post about digital assets in the probate context.  This year, Colorado was one of twenty-three states whose legislatures introduced the Uniform Fiduciary Access to Digital Assets Act (UFADAA).  Keep in mind that the uniform act was endorsed by the National Academy of Elder Law Attorneys (NAELA) of which I am a member.  The Colorado House Bill to enact the UFADAA was introduced at the beginning of the year, HB 15- 1189, and can be read here.  Its short lived history is this: introduced in the Colorado House and assigned to the Judiciary Committee on January 29, committee discussion took place on February 19, and then on March 12, 2015, the House Judiciary Committee voted unanimously to postpone indefinitely further action.

Our legislature has postponed further action on this uniform law, but it doesn’t mean that it isn’t important for people and estate planning attorneys to address issues concerning access to digital assets by fiduciaries in the probate context.  According to the bill fiduciaries included the following: a personal representative of a decedent’s estate (where there is a will or codicil or also a special administrator); a conservator acting on behalf of a protected person; a trustee acting under a trust; and an agent acting under a durable power of attorney.  The bill specifically addressed each type of fiduciary and their access to a digital asset in further detail.

The Colorado Bar Association subcommittee charged with discussion of this uniform law as a Colorado bill also discussed Colorado-specific inclusions to the Uniform Act, like access by a “successor” as defined in  our probate code when a small estate is collected by affidavit. Basic Information about using this form is found on the Colorado State Judicial website, www.courts.state.co.us and searching for the JDF 999 form, with instructions found at JDF 998.

Specifically excluded from application is access by an employer for an asset used by an employee in the course of the employer’s business.

So HB 1189 didn’t become law because it died in committee, but that doesn’t mean that at least some of us estate and elder law attorneys (especially ones like me who prefer to use their own form and not someone else’s) don’t still include provisions regarding digital assets in a durable power of attorney form.  Colorado remains in the majority of states which have no legislation regarding digital assets in the probate law context, but that doesn’t mean we should feel comfortable remaining complacent and not doing anything to plan just because our legislature didn’t pass this important legislation. . . .  There are step we can take to help ensure that a fidicuairy will have access to important fiduciary assets, but without a state statute to that effect, it is much less certain exactly what type of access will be allowed or recognized.

So here’s a bit of a review of why these measures are important to include in a general durable power of attorney and a will or trust:

  1. Identifying and providing an inventory of one’s digital “footprint” will greatly simplify an agent or other fiduciary’s ability to take control of an incapacitated or deceased person’s digital assets in keeping with the stated desires of the person giving the power – like a principal under a POA, the settlor of a trust, or a testator (the maker of a will). This can be done easily by keeping an update listing in a place that is discoverable or known to an agent, for example.
  2. Giving a fiduciary access to important information like usernames, passwords and the like, will greatly simplify the fiduciary’s efforts and ability get access from a service provider or to shut it down. The law in this regard is complicated – it involves user agreements, which often are based on the law of a state where the service provider is headquartered and not in which the user resides, and implicates also the federal law relating to the use of the internet.
  3. When a person gives another, such as a person acting as a fiduciary for that person, the authority to act, there should also be some instructions about what should be done with the particular asset. This will obviously makes the fiduciary’s job much simpler as a job description takes much of the mystery out of such an undertaking.
  4. The person who is the account holder should also expressly authorize service providers to disclose private information to a person’s fiduciary so as to evidence the person’s intent to give access to such information and to provide the authorized access to the information or data as a consequent of such access. This is why some of us, myself included, include specific clause to this effect in a durable power of attorney.

That’s all for now, but I will keep you posted as things continue to develop.

©Barbara Cashman  2015   www.DenverElderLaw.org

 

The Current Conundrum of Dementia and Consensual Sexual Relations

Assisi flowerbox

Assisi flowerbox

As promised in a previous post, I’m taking another look at this topic which is certain to become more controversial as situations in long term care facilities continue to present themselves.  This topic is of recent relevance due to the acquittal of an Iowa man  who was tried for sexual abuse of his now deceased wife, who suffered from dementia and resided in a skilled nursing facility.  After eight days of trial, the jury deliberated nearly two full days to deliver their verdict.  This criminal trial may be the first time a jury has considered the issue of a person’s capacity to consent to sexual relations when a person has dementia.

The man tried was a 79 year-old former Iowa state legislator (Mr. Rayhons) who was charged with having sexual relations with his wife at a long term care facility.  The prosecution had argued that exceptions to the criminal sexual acts statute did not apply because the husband and wife were not cohabiting.  This case ushers in a new era for the important question of how to balance rights and protections.  As the age of the numerous baby boomers increases, this question will undoubtedly be raised again, particularly when the number of divorced or remarried boomers begin to occupy more space in skilled nursing facilities or other communal living.  Sexual expression in SNFs is not necessarily a taboo subject.   The Hebrew Home at Riverdale (NY) first published their “Policies and Procedures Concerning Sexual Expression” in 1995.  In it is found empowering statements about residents’ rights to sexual expression and special factors apply where a resident has cognitive impairment which implicated the ability to form and give consent.    I’ve come up with a not-very-short list of some of the big picture questions raised by this case:

  • What is the requisite capacity required to consent to sexual relations for an older adult?

 

  • How can this capacity be expressed appropriately?

 

  • Is the nature of consent to sexual relations different for married persons?

 

  • Does the nature of sexual expression change as we age?

 

  • Who is responsible and how is a determination of consent made when the resident has a guardian (a person who is legally responsible for an incapacitated person)?

 

  • How can a health care provider or an adult child interfere with or help support an older person in their choice of sexual expression?

 

  • What is the zone of privacy for a married couple when one spouse lives in a skilled nursing facility or similar group setting?

 

  • Is consent to sexual relations for a person with dementia actually a medical issue appropriate for a doctor to make?

 

  • If a person with late stage dementia is not capable of giving consent, would this make any form of the person’s sexual expression tantamount to rape?

 

 

  • In looking at dementia and intimate relations in long term care facilities – what are the stakes in the rights vs. protection continuum?

 

  • What about divorced or otherwise single folks and all the blended families? How many people are involved in the notification and determination process?

 

  • Is this a capacity issue or an ageism issue? I would say the this involves both issues . . .

In the Rayhons case, the late Mrs. Rayhons’ daughters took their concerns for their mother’s ability to consent to sex by taking the question of capacity to the doctor on staff.

What this case clearly demonstrates is the number of difficult questions presented in identifying the factors for considering sexual expression in the skilled nursing facility.  There is a present need to establish some basic consensus about residents’ rights to sexual expression in long term care facilities.   Groundwork needs to be taking place now.  How many of us consider this question when we visit a facility to consider housing options?

I will note that in this post I am not looking at how sexual expression rights in long term care facilities are implicated when residents also suffer from mental illness or when there are sex offenders residing in the facility.  Colorado does not at this time have any particular laws or regulations regarding sex offenders (or sexually violent predators) in long term care facilities, so it seems unlikely that an applicant for housing in a particular facility would be barred as a result of sex offender status, but the facilities themselves may adopt or follow their own policies in this regard so as to minimize risk to its residents.

©Barbara Cashman  2015   www.DenverElderLaw.org

Part II: Is Physician Assisted Death Coming to Colorado? (Not this year)

At the Chatfield Wetlands

At the Chatfield Wetlands

This is the continuation of my previous post about the Colorado House of Representative bill on physician assisted death, on the topic “Concerning a Terminally Ill Individual’s Freedom to Make End-of-Life Decisions, a/k/a the “Colorado Death with Dignity Act.”

If you’re curious about the debate in other parts of the world, here’s a link to a recent article in The Guardian.  And here’s a New York Times article from last year on the topic of “aid in dying,” as there are variety of names for what is collectively physician assisted death (PAD).  Well, back to the Colorado bill.

I will continue in this post with some of the concerns I have with the proposed legislation – from the standpoint of what is in the bill (terminology) and how it works (philosophy).  I have difficulties with the term “informed decision” and how it relates to the principle of informed consent – the process for getting permission for a patient prior to conducting a healthcare intervention.  Based on the definition in (7) of section 25-47-102, this “informed decision” doesn’t look like informed consent.  What is it that the doctor advising a patient about this life-ending process must advise their patient? Some of it is informed consent, but it seems to be bigger than that and only for purposes of this legislation.  This is vague and troublesome indeed.   Can’t we just call it informed consent for ending one’s life? Will that agitate the medical community? This is another unsaid conflict that should not go unnoticed in this bill.

One of the stated concerns relating to a person’s capacity in this bill is that the person be “capable” and not otherwise suffering from a depression-impaired ability to make an informed decision.  This bill seeks to pigeonhole diagnoses, to impose clarity in another rather gray area.  There are some terminal diseases, like Parkinson’s, which often have a psychological or psychiatric component that cannot be easily extracted from the disease itself.  In my experience, I have seen disability insurers seeking to exclude from coverage a person with a diagnosis of Parkinson’s disease because those persons often also have a diagnosis of depression that accompanies Parkinson’s.  I use this by way of example only, to assert that it is not at all simple for any health care provider to extract a psychiatric or psychological disorder such as depression (as stated in the bill at section 25-47-107) that accompanies a diagnosis or prognosis or course of disease progression from that which impairs one’s ability to make an informed decision.  There is a psychosocial component to many terminal illnesses, you can read more here about treating depression in advanced cancer.

This goes back to the rather slippery nature of the informed decision versus informed consent distinction.  The medical-technological focus on dying in this bill is on death not as a natural process of life but as a medical problem.  I believe this is in large part what perpetuates the avoidance and the denial of death in our culture.  Using emotional restraint, facing death stoically and by deciding bravely to “assert control” to foreshorten any disturbing developments of the disease progression or any needless suffering are all bureaucratic way of making death “ordinary” in the sense it happens to us all.  This extends the social isolation of the dying person, making their suffering worse, a dying person is in this way of thinking simply a useless reject of a person.  The “brave choice” of a person in this context converts the life-ending decision into a glorified act of autonomy.  The individual’s decision is theirs alone.  This approach of physician-assisted death (PAD) stands in contrast to the family unit or community based models of hospice and palliative care, which seek to lessen pain, maximize quality of life for the dying and hold those persons in their identities.  In this respect, PAD becomes a means of the individual’s attempt to fight back against the ignominy of illness, of life-robbing disease which compromises one’s social identity.  I don’t buy it!

Another problematic inclusion is the family notification provision in section 25-47-109.  I am not sure why this in the bill. I don’t really understand what its point is, it seems to be about the doctor recommending some kind of reconciliation if the patient is estranged from his family, which may have nothing to do with patient’s decision to end his life with assistance from a doctor. It seems to hint at including the family in a person’s decision, but it is a feeble attempt at such.

The last point I will raise specifically about this bill, is its reference in section 25-47-103: “Individuals permitted to request life-ending medication”

(1) that an individual is qualified to make such request for life-ending medication if the individual is (a) an adult; (b) is capable; (c) is a Colorado resident; (d) is suffering from a terminal illness. . . and (e) has voluntarily expressed his or her wish to die.  

(2) “A person does not qualify under this article solely because of age or disability.”

This seems to be saying in (1) that those whose quality of life was fully autonomous and who suffer from a terminal disease which implicates that autonomy, by its diminution by degrees, or by an aversion to “suffering” or one’s inability to “control” it – those are the persons who are likely to avail themselves of the life-ending process, for whom this legislation is designed.  It implies in (2) that the disabled and elders who are perceived as “dependent” on others or with some diminished quality of life and whose lives are often pitied by the “young,” able-bodied and independent, would otherwise qualify for life-ending medications based on some perception of the disabled or elder’s quality of life.  I do not imply here that there is any unified voice of the disabled community or of elders voicing an opinion about this, I find this language offensive.

More indifference to the suffering and social isolation of the terminally ill and dying persons is not the answer.  To hasten the demise under the banner of the socially acceptable terms of “autonomy” and “dignity” is not a way of de-medicalizing or re-humanizing the dying process, rather the PAD is a feeble attempt to make death “less threatening” and I just don’t buy it.  The lack of ritual around dying, along with the absence of any recognizable system of meaning around dying and death has resulted in the further isolation and stigmatization  of the terminally ill or dying person.  This bill to allow PAD does not promote death with dignity, rather it offers the socially acceptable perpetuation of the illusion that death con be contained and controlled and need not be “disturbing.”

Update from Friday Feb. 6th’s evening legislative activity: The House Health Committee voted to kill this bill (HB 15-1135) on an 8-5 vote.  Two of the Democrats on the committee joined the Republicans to oppose it.  

©Barbara Cashman  2015   www.DenverElderLaw.org

Is Physician Assisted Death Coming to Colorado?

The Road Only Appears to End

The Road Only Appears to End

I recently looked at the Colorado House bill 15-1135 on the topic “Terminally Ill Individuals End-of-Life Decisions, a/k/a the “Colorado Death with Dignity Act.”  You can read the January 9, 2015 draft here.  There are, as of February 2, 2015, two senate sponsors and an updated version of the bill.  My first challenge with this bill is the how it is marketed – the idea that “death with dignity” can only be accomplished by one’s own hand with the assistance of a physician.  If this sounds provocative, it is – but it implies that the disease process part of a person’s life or the dying from the insult of disease is somehow not otherwise dignified.  Here’s a link to a Jan. 27, 2015 Denver Post article about this proposed legislation, and a link to another appearing on Feb. 1,2015.  This is the first post in a series.

I find myself in the same camp as the hospice and palliative care community as far as the title is concerned.  The idea that the way to die “with dignity” is through physician assisted death by one’s own hand is offensive.  End-of-life decision making is an area in which Colorado residents and patients have many resources.  The title implies otherwise and is simplistic and misleading.  I also find the bill’s descriptions of “alternatives” such as hospice care and palliative care are confusing and misleading. I am unable to come up with a scenario in which physician aided death is a true “alternative” to these.  I think in all cases with which I am familiar, patients have already been under the care of a doctor for hospice or palliative care.  The physician aided dying is more of an “end of the line” complement of sorts to these well-established, even if not widely-recognized forms of medical care.  The primary distinction between these, what makes physician assisted death (PAD) a real alternative to hospice and palliative care is that physician assisted death is not a natural death as the result of a disease process.  PAD represents a premature death, hastened by a number of different perceptions and choices about what one’s life is for as well as one’s own ideas about loss of autonomy amounting to loss of dignity and as needless suffering.  In this respect, terminal disease is a failure of one’s ability to control an outcome, and fear of a change in one’s identity in the world due to a change in one’s relationship to others.  I think physician assisted death further isolates and marginalizes people and the dying in particular.  It is in the time of weakness and vulnerability when we need each other.  This is dignity, what it means to be human.  Here’s a link to a recetly posted youtube by Jean Vanier, of L’Arche Internationale, speaking to the English House of Lords, on why the strong need the weak.  I think it easily translates into why the healthy and living need the sick and dying.

Another big distinction between PAD and hospice and/or palliative care is the philosophical problem of distinguishing physician assisted dying from medical care.  That difficult distinction crops up throughout the bill with the challenge of identifying informed consent in a way that is a major departure from its history.  The Greek roots of the word “euthanasia” mean “easy death.”  There are different types of euthanasia, as described in this abstract from pubmed.gov and the moral dilemma presented by its practice is ancient.  Euthanasia is premised on the ending of life and may be voluntary or involuntary and active or passive.  Suffice it to say there is no bright line in this arena, only slippery slopes leading in both directions!

One of those slopes I find particularly troubling concerns the definition of “capable” in the bill.  This is defined in section 25-47-102(3) and it is overly broad.  We don’t have any context for this meaning of “capable” – capable to do what exactly?  This is the touchstone for capacity determinations in the field of estate and elder law.   Is this definition of “capable” for giving informed consent for health care purposes or something different?  I conclude it must be the latter, so the lack of a definition is a big problem.  Would a court need to determine someone “capable” to make a decision under this statute?  Under guardianship law, only those who have had a guardianship lifted are “adjudicated” as “capable.”  All adults, persons aged eighteen and older, are presumed by the law to have capacity.  “Capable” as used in this draft bill is too vague. Another part of the bill (the consulting physician confirmation of 25-47-106(1)(c) refers to this trifecta: requiring that the individual be capable, acting voluntarily and has made an informed decision.  I find this safety net here very interesting – what it is designed to protect against . . .  well that is not discussed anywhere, it is left unsaid.

The absence of any aspect of spirituality is telling – but there are those who think that leaving out the spiritual aspects and the soul-learning of the dying process are too hot not to handle.  See M. Scott Peck, “The Denial of the Soul: Spiritual and Medical Perspectives on Euthanasia and Mortality” (1997: Harmony Books) at 209.

Death is fearful, yet we carry our death within our lives.  Is the essential fear we are talking about in the PAD regime really a fear of loss of control, over our autonomy and the descent into helplessness?  I think in this respect it is a fear of life, life’s uncertain course that leads to our inevitable demise.  This fear of life is the adjunct of the fear of death.   Many of us maintain a certainty that our life is predictable and we can control things that happen to us, if we maintain that fantasy then most certainly are disease, disability and death an affront to our choice, an assault to our personal belief system and no longer simply part of life.  What if we were to do as Lau Tzu suggests – “take care with the end as you do with the beginning.”

I will close this first portion of the discussion of this proposed legislation with an insight from David Wendell Moller’s book “Life’s End: Technocratic Dying in an Age of Spiritual Yearning,) (2000:Baywood) at 159:

 . . . the sequestering of dying patients protects ordinary people from the terrorizing issue of death. . . . [the hospital’s] technological coordination of dying serves to submerge, deny and organize the dying process into professionally restricted categories which restrain the expression of personal pinings and fears for both providers and patients.”

It seems to me that the PAD bill serves to further the marginalization of the dying.  More about that in my next post.

©Barbara Cashman  2015   www.DenverElderLaw.org

 

The Medical Power of Attorney and Medical Advocacy: Two Roles are Better than One

Centennial Estate Planning

Along the Banks of the South Platte

How can we help elders navigate the daunting medical system and help them make the best choices for their needs and values?  Last week I attended a lunchtime continuing legal education program sponsored by the Arapahoe County Bar Association and presented by Janine Guillen, an attorney and registered nurse.

Janine told of her personal experience with her mother’s health care issues toward the end of her life and how she advocated for her mother while her sister served as their mother’s health care agent.  Many of us come to be familiar with these matters based on our personal experience with elder parents and their health challenges.  Towards the end of their lives, I was health care agent for both of my now deceased parents.  I remain skeptical about a health care system (Medicare) that pays its provider for services per intervention, and the greater the number of interventions for elders, the higher the mortality.  This post will give a brief overview of the two roles along with some helpful organizational strategies that were proposed.

Yes, these jobs of health care agent and health care advocate can be split.  They are often assumed by a single person, but if it is often helpful and sometimes necessary to split up the roles for assisting an elder.  A result of this is that it can often facilitate good communication among siblings and allow adult children to share some of the challenges and burdens of helping an elder parent.

What your health care agent (agent under a medical durable power of attorney (MPOA) can do for you.

Your health care agent is the person named in a medical power of attorney to make medical decisions for you in the event you are not able.  The types of decision an agent can make can be broad or narrow, general or specific and the agent’s authority is typically set for the power of attorney document.  I am in favor of powers that confer broad authority on an agent.  This is for two reasons, it requires the principal have a conversation with the agent about what the principal wants (a conversation about these matters is necessary) and there is little likelihood for confusion about what an agent can do.  Also, I tend to think that a short document is best, given the amount of time that health care providers spend with their patients, it is not a great idea to draft a long and complicated document which might complicate matters.

I like simplicity and brevity in the medical power of attorney document.  Here’s a current pet peeve of mine relating to this document.  I am puzzled when I see certain language in a medical power of attorney form that specifically addresses the events in which the agent assumes authority to make decisions on behalf of the principal.  I don’t see this language often, but it usually addresses the effective date of the MPOA, offering two alternatives – effective immediately, or as a “springing power” that allows the agent to act only in the event that “my physician or other qualified medical professional has determined that I am unable to make or express my own decisions, and for long as I am unable to make or express my own decisions.”  This is set up as an alternative in a poorly worded form, but there is in reality only one situation in which a health care provider would consult an agent to make decisions regarding a principal.  The doctrine of informed consent requires a health care provider to get informed consent from the principal, and it is only in the event of the provider’s determination that the principal is unable to give informed consent that an agent would be consulted.  All MPOAs are by their very nature “springing” – meaning that an agent is only empowered to act in the event of principal’s incapacity as it relates to the provision of informed consent for health care services.

I cannot say why this confusing language appears in a couple forms I have seen, but it looks to be a relic from the bygone days of the general (financial) durable powers of attorney.  Since the adoption In Colorado of the Uniform Power of Attorney Act, which became effective in January 2010, all powers of attorney (nonmedical) executed after that date are (1) durable unless they state otherwise; and (2) are “standing” powers, meaning that the effective date is that date of signature by the principal and that the agent’s authority to act is not contingent on some event or determination (a/k/a a springing power) unless specified to the contrary.

What your health care or medical advocate can do for you.

A health care advocate is not only another set of eyes, ears and brain focused on medical decisions, the advocate can provide reassurance and companionship to help ensure an elder gets appropriate care, gets answers to questions and otherwise ensure understanding concerning health care services that are recommended.  If you are thinking about getting a health care advocate, make sure it is someone whose judgment you trust and is someone who is not afraid to ask questions or stand up to authority in unfamiliar or stressful situations.

Here’s a bullet list of some of the tips that Janine provided:

  • Go to The Joint Commission website to perform a quality check on a health care organization (hospital or provider);
  • Use language and specific observations that your doctor can use to help diagnose a problem (use fact-specific observations and stay away from online self-diagnosis);
  • Make sure you have executed HIPAA releases for your agent, health care advocate and any others you want to have access to your medical information;
  • Keep an up-to-date list of all health care providers, their specialties and contact information;
  • Maintain a current health history and medications list so that it doesn’t have to be remembered and written down for each provider; and
  • Write down questions you have so that you don’t forget to ask them when you see the doctor.

Here is a link to a Forbes article about how to become a patient advocate.  Many of these advocates gain their skills and come to appreciate the need for such services as a result of coming to serve in that capacity for an elder parent or other relative.  I think it would not be controversial to make the observation that it is not simple for an elder to manage and effectively navigate through our medical industrial complex on their own.

©Barbara Cashman  2014   www.DenverElderLaw.org

The Contractual Capacity Conundrum, or Part 3

October Dahlia

 

So we’re back on this capacity discussion again.  In the first installment I looked at testamentary capacity, which I characterized as the “basement” as far as capacity levels go.  For better or worse, the contextual notions of how much capacity is enough tend to get more complicated as we move up from that basement of testamentary capacity and look at other types of capacity which require just a bit more um. . . . capacity.  In last week’s post I looked at capacity in the health care context – medical POAs, advance directives and so forth – which are governed by statute.  This week I return to the shifting ground of common law notions of capacity – as reflected in our case law, and focus on items 3 (DPOA capacity) and related actions around the notion of what is the capacity to enter into a contract.

Contract: An agreement between two or more persons which creates an obligation to do or not to do a particular thing. Black’s Law Dictionary, Fifth Ed., 1979.

Capacity: Legal qualification (i.e., legal age), competency, power or fitness.  Ability to understand the nature and effects of one’s acts.  Black’s Law Dictionary, Fifth Ed., 1979.

Conundrum: 1. A riddle, the answer to which involves a pun or play on words. 2. Anything that puzzles.  Webster’s Encyclopedic Unabridged Dictionary (1989).

Ageism sometimes factors into how our notions of capacity are formulated.  When is someone really old and what are the implications of reaching a certain old age?  I have heard ninety-something-year-olds bristle at a proposal from their “kids” that they move from an independent living apartment to assisted living – based on the thinking that assisted living is for “old people.”  Obviously . . . . looking in a mirror doesn’t help many of us come to terms with elderhood and all it may or may not entail!  Okay, one last detour before getting back on track: Scientific American recently posted on the topic “Cocoa Constituents Fend Off Senior Moments” which you can read here.  Yes, the title got this chocoholic’s attention, but I’m afraid it’s about the cocoa flavonols, but that doesn’t mean that I won’t be consuming plenty of chocolate just to be on the safe side! The research in the post concerned a level of flavonols that would be contained in a daily dose of about twenty-five chocolate bars a day . .

You might think the right to enter into a contract is important, but also that it is part of something bigger.  The eminent political commentator Walter Lippman (who coined the term “Cold War”) observed that the first principle of a civilized state is that power is legitimate only when it is under contract.  I came across this very interesting article that the freedom to contract is a human right.  Why is this relevant to the discussion in this blogpost?  We need to be vigilant about creeping ageism and paternalism toward elders while at the same time recognizing a need for protecting vulnerable elders.  What the article in the link discusses is that we must remain watchful regarding any status-based limitations on the freedom to contract (status being things like age or a certain personal condition) rather than capacity based (capacity to do a certain task) or relating to the subject matter of the contract.  In case you might be thinking that we haven’t had such restrictions in our American legal system – think again!  Just one example that comes to mind and it is not a familiar one to most people.  I was a history major in college and wrote a paper about coverture, which basically obliterated the legal rights of women in colonial America once they married.  This is an example of a status classification.

Part of Colorado’s relatively new law on elder abuse (and mandatory reporting of it) focuses on persons at risk due to age and disability – the law defines an at-risk adult as “any person who is seventy years of age or older or any person who is eighteen years of age or older and is a person with a disability.”  Colo. Rev. Stat. §18-6.5.102(2).

So then, is old age a status?  Yes, of course it is!  In the context of defining contractual rights and in other parts of our legal system (both civil and criminal) status- in the old age context, can often be mingled with disability law.  This is a useful development for many elders with diminishing physical and cognitive capacities, but what are its broader and more problematic implications?

Getting back squarely to the topic of this post – what is contractual capacity?  If we can readily distinguish it from status, that’s a good start, but what does it mean in the estate planning and elder law context?  Last week I presented a CLE to Jim Duve’s solo networking group in Colorado Springs and one if the questions I raised to my audience was “how do attorneys deal with different capacity standards when they are preparing documents for clients and otherwise determine that a client has enough capacity to perform a certain task?”  Unfortunately, I raised many more questions than were answered. . .

Let’s take a look at this statement from the Colorado Court of Appeals in In re Estate of Romero, 126 P.3d 228 at 233 (Colo.App. 2005):

the [Colorado] supreme court has held “that contractual capacity and testamentary capacity are the same.” (Citing Breeden v. Stone, supra, 992 P.2d 1167 at 1170 (citing Hanks v. McNeil Coal Corp., 114 Colo. 578, 168 P.2d 256 (1946)).

This observation was important to the court’s decision in the Romero matter, but it is of little practical assistance toward the development of a cohesive doctrine of what capacity is enough capacity in the contractual context or other contexts relevant to estate planning and elder law representation.

To review, the fundamental question of “how much capacity is enough” in the contractual context must be answered with a response beginning with “it depends . . . !”  So if you’re looking for a treatise on this topic, check out Civil Mental Disability Law, Evidence and Testimony, by John Parry.  Okay, I think that’s enough heavy lifting for this blog post. . . . so I’ll return to the first definition of conundrum and note that forklift operators (like many attorneys) really don’t like puns because they find them unpalletable.  Until the next installment.

©Barbara Cashman  2014   www.DenverElderLaw.org

A Follow-Up to Annuities and Elders – a Complicated Mix

Mount Hope Cemetery, Rochester, New York

Mount Hope Cemetery, Rochester, New York

Here is a timely follow-up to the blog post I wrote a few weeks ago about annuities and elders.  The Colorado Division of Insurance recently amended its regulations applicable to advertising and sales promotion of insurance and annuities, effective July 1, 2014. Regulation 4-1-1 apply to Variable Annuity Contracts and Amended Regulation 4-1-2, to Advertising and Sales Promotion of Life Insurance.  This new regulation also applies to annuity contracts.  You can read the new regulations here.

Section 6 of the new regulations is entitled Disclosure Requirement:

(B) An advertisement shall not omit material information or use words, phrases, statements, references or illustrations if the omission or use has the capacity, tendency or effect of misleading or deceiving purchasers or prospective purchasers as to the nature or extent of any policy benefit payable, loss covered, premium payable, or state or federal tax consequences. The fact that the policy offered is made available to a prospective insured for inspection prior to consummation of the sale, or an offer is made to refund the premium if the purchaser is not satisfied or that the policy or contract includes a “free look” period that satisfies or exceeds regulatory requirements, does not remedy misleading statements.

Section 6 (N) states:

No insurance producer may use terms such as “financial planner,” “investment adviser,” “financial consultant,” or “financial counseling” in such a way as to imply that he or she is generally engaged in an advisory business in which compensation is unrelated to sales unless that actually is the case.

What do these changes mean?  Section 6(N) makes an important distinction concerning annuity sales persons and financial advisors to reflect that a person who sells annuities is typically not a financial adviser who receives compensation which is unrelated to the sales of annuities.  So let’s take a look at the words that can no longer be used in Colorado to sell or advertise annuities and life insurance, due to the potential for misleading consumers?

                 Safe

                Secure

                Certificate of Deposit or CD

If you want to read more about this, check out this article in MarketWatch.

Why is this so relevant for elders?   Many elders are afraid of running out of money toward the end of their lives and do not want to be a financial burden on their family members.  The trickiest part about retirement planning is not knowing whether you will outlive your money.  Another problem with annuities is that they tie money up for a prescribed period of time, when many elders need flexibility in their financial portfolio.   One of the most infamous examples of inappropriate annuity sale for an elder is the story of Alice Bouchard, an 85 year-old who was sold a deferred annuity by an insurance agent which made her money unavailable until she was 101!  Read more about it here.

There are FINRA guidelines and regulatory notices about “suitability” of particular annuities for elders and there are state law statutes and regulations (like the ones above) governing suitability also.  Suitability includes the particular situation of the consumer, their age and needs for liquidity along with things like: what the consumer’s other investments are; the overall financial status; investment objectives and risk tolerance; the consumer’s tax situation; health status; availability of emergency funds and other factors.  These are especially important in annuity sales to elders as over the years there were have been many documented sales that were inappropriate or detrimental to the elder.  Colorado’s regulation 4-1-11 follows the suitability model regulation that was adopted by the National Association of Insurance Commissioners in 2010.

Annuities can be complicated and the contracts often contain many unfamiliar terms.  Colorado’s new regulations help clarify how annuities can be sold to consumers.  It is important to carefully consider a financial course of action, especially when someone is faced with advancing age and health crises.  It is difficult enough to make a sound decision amidst fear, even when it is a fear that another (a stranger perhaps) has brought to you – made you aware of and thus creating an emotional need to resolve that fear.  Yeats aptly observed in “Sailing to Byzantium” that this is no country for old men – this world full of youth and life, and that the agony of aging is inevitable.  But I would submit that Fear – especially of being a burden on others – is another matter.

An important last detail I will consider is the “free look” period. A “free look” period is like a grace period to cancel the contract due to buyer’s remorse. This is for a limited period of time only and after the free look period has passed the contract is fixed and any withdrawals of funds outside the time frame prescribed in the annuity contract will incur sometimes very large penalties.

While the new Colorado regulations will help identify the “no no” words and further regulate techniques and tactics that cannot be used in the sales and marketing of annuities, it is still the best for the consumer to have time to carefully consider what they are getting into before an annuity is purchased.

©Barbara Cashman  2014   www.DenverElderLaw.org

Annuities and Elders – a Complicated Mix

Monet Garden Pond at DBG

Monet Garden Pond at DBG

 

Annuities are sometimes described as an emotional investment vehicle because they guarantee lifetime income for a person.  This can help an elder feel more secure about their money, at least about their monthly income.  This security comes at a cost.  There is lots of information, probably too much information about annuities available on the internet.  This is where it is a good idea to employ one’s “crap detector” (as cyberculture expert Howard Rheingold identifies it in the 2012 book NetSmart) but it is not simple for these types of investments because they are often very complicated instruments.

Annuities tie up someone’s money long-term, and the terms of the annuity – both risks and benefits, and especially how the risk is monetized as a cost of the arrangement, should be looked at  carefully.  The annuity is governed by a contract and generally provide periodic payments over a specified amount of time, provide benefits to a designated beneficiary (if the annuitant, the person on whose life the annuity contract is based, dies prior to receiving payment),and can provide certain tax deferred benefits.

Sometimes people sell annuities that are touted as Medicaid friendly, but Medicaid rules, which vary from state to state, change often.  Bottom line is that some annuity sales persons want to sell an annuity that is based simply on the insurance company or other financial institution taking a larger sum of money and doling it out in small portions over a course of years.    Making an investment that may or may not be appropriate or a good idea for a particular individual is often complicated by the perceived “need” to qualify for immediate benefits.  Annuities are only part of the picture.

 

First off, what is an annuity?

The SEC’s website provides a succinct overview of the three basic types:

  • Fixed annuity. The insurance company promises you a minimum rate of interest and a fixed amount of periodic payments. Fixed annuities are regulated by state insurance commissioners. You can check the Colorado Commission on Insurance website here  about the risks and benefits of fixed annuities and to confirm that your insurance broker is registered to sell insurance in your state.
  • Variable annuity. The insurance company allows you to direct your annuity payments to different investment options, usually mutual funds. Your payout will vary depending on how much you put in, the rate of return on your investments, and expenses. The SEC regulates variable annuities.  FINRA has a succinct explanation of variable annuities here.
  • Indexed annuity. This annuity combines features of securities and insurance products. The insurance company credits you with a return that is based on a stock market index, such as the Standard & Poor’s 500 Index. Indexed annuities are regulated by state insurance commissioners.

 

Okay, I might as well go the full gamut here and mention “life settlements” while I’m on the topic of insurance and elders . . . .  Say what? I first heard about these arrangements under their much more glamorous sounding name of “viaticals” or the acronym “STOLI” (stranger originated life insurance). These settlements became popular during the AIDS epidemic, but the first instance of it being approved comes from the 1911 U.S. Supreme Court decision of Grigsby v. Russell, 222 U.S. 149 (1911), Dr. A. H. Grigsby treated a patient named Mr. Burchard, who wanted a particular surgical operation but could only pay for it with a life insurance policy.  Burchard sold Dr. Grigsby his life insurance policy in return for $100 and for agreeing to pay the remaining premiums, and so the first viatical settlement transaction was created.  After Burchard died, Dr. Grigsby attempted to collect the benefits but the executor of Burchard’s estate successfully challenged the arrangement. The case eventually reached the U.S. Supreme Court where Justice Holmes stated in relevant part that “so far as reasonable safety permits, it is desirable to give to life policies the ordinary characteristics of property. To deny the right to sell except to persons having such an interest is to diminish appreciably the value of the contract in the owner’s hands.”  222 U.S. at 155-56. Okay, once again I’ve gone off-track in this post about annuities. . . .!

I am writing this because in my work people contact me and in the scope of gathering information I often encounter difficulties and misunderstanding on the part of annuitants, beneficiaries and other survivors of annuity contracts.  The remorse and misunderstanding factor on these types of investment contracts can be high – so take a calm and measured look at these before you or someone you care about signs a contract!

Wondering about where to get more information about these annuities? Here a link to the FINRA warning about these investments – FINRA is short for Financial Industry Regulatory Authority (for those of us who took a securities law class in the previous century, this agency was formerly known as NASD – the National Association of Securities Dealers). Where the Securities and Exchange Commission (SEC) is a government regulatory agency, FINRA is the largest self-regulatory organization in the American securities industry.

To recap, annuities seem to be appealing to many older folks (boomers included) because of their emotional appeal of guaranteed income for life.  This article from Business Week is nearly ten years old, but is still relevant.   Best to explore and discover the best means for what to do with your limited funds in retirement and make sure that you have considered all the options before alighting on the one that is right for you – especially if it is an investment that cannot be undone.

 ©Barbara Cashman  2014   www.DenverElderLaw.org