Will I Inherit My Parent’s Debts?

 

Denver Elder Law

Summer at Hudson Gardens

Here’s a picture from a bird walk I did with a group at Hudson Gardens last weekend.  No there aren’t any birds in this one, so don’t look for the red-winged blackbird that was nearby.  On that beautiful summer morning I saw a number of birds: a blue heron taking flight from the bank of the South Platte; a cowbird perched at the top of a large cottonwood; a mud swallow in her nest: a brilliantly plumed yellow warbler (yes, warbling while perched in a tree); a cute little chickadee-dee-dee; and a couple hawks flying above us – a red-tailed and a Swainson’s hawk.  Now, down to business. . .

Sometime back I featured a blog post which was written by my friend and colleague Ayo Labode about filial responsibility law (the duty of a child to care for the parent) and that has been a popular post.  Colorado doesn’t have those archaic laws and I don’t think there’s much concern that our legislature is likely to adopt such legislation.  A more common question that is likely to elicit concern and fear, along with a variety of information and misinformation – concerns whether a parent’s debt can be inherited.

This was a much bigger concern a few years back when we were in the midst of economic downturn and grim employment prospects, and many Americans found themselves underwater in their mortgages and out of jobs.  During that time, many of us had to consider very carefully whether it was a good idea to open an estate to collect the assets (even if there were few of them).

A much broader concern however, concerns debts in a decedent’s estate.  Sometimes a parent or other loved one dies with large debts.  This can present many problems for surviving family members about what to do and how to proceed.  Here is an interesting article about this.  An interesting topic – alas, for another post – concerns what is considered or becomes probate property administered by an estate administration proceeding (whether there is a will or no will) and what is nonprobate property that will not typically be subject to probate estate administration.  But remember that it is a good idea to remember to make beneficiary designations for nonprobate assets, these can generally help maintain flexibility as I noted in my Inherited IRAs post a couple weeks ago, reprinted here in this CBA/CLE Legal Connection blog post.

Probably one of the most feared issues under this heading is “Medicaid estate recovery.”  This fearsome prospect does not appear to be widely used in Colorado at this time (based on anecdotal evidence I have collected).  In this context, a house (a typical “probate” asset) is the only substantial asset a person may keep and still qualify for Medicaid. So the state may place an estate recovery lien on a parent’s home to recover those Medicaid payments.  As Ayo explained in the post referred to above, Medicaid will not come after the children of a Medicaid institutionalized parent.

Once an estate is opened, it is open for all comers, so to speak.  This means the bill collectors of course.  Under our probate code, a creditor is entitled to open an estate of a deceased person if no other person has opened one after forty-five days following the debtor’s death.  Our probate code provides a list of claim and creditor priorities, so there is an order to who goes to the front of the line (like medical expenses of a last illness) and who gets relegated to the back (usually unsecured creditors like credit card companies).  Claims must generally be filed within one year of the death, but when an estate is opened for a decedent, it is typical to publish a “notce to creditors” which provides notice to the world and shortens the time period for claims to be filed.

This is why it is a good idea to consider carefully whether to open an estate – to avoid administering an estate that has no real assets or will benefit only creditors. Debts generally come off the top of the estate, so to speak – the beneficiaries (under a will) or distributees (where there is no will) get their share after creditors’ claims have been paid.

Let’s take a quick look at two basic kinds of debts and resulting claims.

Secured debt:

“Secured” means the debt has physical collateral that guarantees the balance. These are debts like mortgages (secured by the home itself) and car loans (typically secured by the car).

 Unsecured debt:

This is debt that is not secured by any collateral but simply is a promise to pay under an agreement.

This is already getting to be a rather long and complicated post, so let me conclude with WHAT TO AVOID.

The easiest way to inherit your parent’s debt:

  • Cosigning on an account. A cosigner will assume full responsibility of shared loans and credit cards.
  • Joint account holders whose income and credit history were used to acquire a loan or credit card are typically solely responsible for paying joint debts.
  • Signing as guarantor instead of as agent under a power of attorney.

To reiterate, sometimes the decision of whether to open estate must be made very carefully, in consideration of what is the asset/debt ratio of all property and whether an opening of probate is for some other reasons a good idea or required.   For example, under Colorado law (for the year 2014) a collection by affidavit can be used by a successor to collect assets not exceeding $64,000.00.  The use of such an affidavit is only appropriate where there is no estate opened on behalf of the decedent.  I will write more on this topic in the future, so stay tuned!

 ©Barbara Cashman  2014   www.DenverElderLaw.org

Jefferson County Senior Law Day is Saturday, June 7, 2014.

Wyoming Cowgirls circa 1943

Wyoming Cowgirls circa 1943

The 4th  Annual Jefferson County Senior Law Day will be held at Faith Bible Chapel, located at 63rd and Ward Road, Arvada, Colorado, beginning in the Worship Center at 8:00 a.m.  The opening session is from 8:00 a.m. to 8:45 a.m. and will feature First Judicial District Attorney Peter Weir, Channel 9 investigative reporter Chris Vanderveen, and Jefferson County Commissioner Faye Griffin.

This public service announcement does have a bit of self-promotion as I am presenting on financial powers of attorney and conservatorships . . . !

Session 1 workshops will be held from 9:00 to 9:45, Session 2 workshops will be held from 10:00 to 10:45, and Session 3 workshops will be held from 11:00 to 11:45.  Session four has three different presentations from 1:00 – 1:45.

Here’s a sneak peek at the presentations for the first session:

 

 Probate: Perspective from the Bench The Honorable Chief Judge Stephen M. Munsinger

Jefferson County District Court

 

 Estate Planning Basics: Wills and Trusts Lisa Eastin, Esq.

 

 

 Maintaining Your Independence at Home Michele M. Lawonn, Esq.

 

 

 Prevention and Mandatory Reporting of Elder Abuse Candace K. Werth, Esq.

Jennifer Clark

Joan Stein

District Attorney’s Office

Elder Abuse Unit

 

 When Someone Dies: Medical and Legal Issues Carl A. Blesch, M.M.S., P.A.,

District Attorney’s Office

 

And the second session features:

 

 Planning Ahead for Serious Illness and Beyond: Conversations, Decisions, and Advanced Directives Susan Fox, Esq. and

Jennifer Ballentine, MA

 

 

 Role of Public Administrator and Probate Administration Virginia Frazer-Abel, Esq.

Jefferson County Public Administrator

 

 A Consumer’s Guide to Choosing Nursing Homes and Assisted Living Facilities Mary Catherine Rabbitt, Esq.

Ayo Labode, Esq.

 

 

 Fighting Back Against Identity Theft Cary S. Johnson

Director: Crime Prevention

District Attorney’s Office

 

 

 Later Life Relationships Christine J. Law, Esq.

Julia Griffith McVey, Esq

 

And the third session:

 

 Medicare Update William B. Kistler, EMBA

 

 Financial Power-of-Attorney & Conservatorship Barbara Cashman, Esq.

 

 

 Prevention of Fraud and Scams Jessica Beren

Detective

Westminster Police Department

 

 Social Security Dawn R. Hewitt, Esq.

 

Lunch is from 12:00 to 12:45 in the gymnasium on the lower level.  Finally, there are a few sessions after lunch:

 

 Lifelong Learning and the Aging Brain Zane Robertson

 

 End of Life Planning Catherine A. Silburn, Esq.

 

 Medicaid Update Claire E. Dineen, Esq.

Kathleen A. Negri, Esq

 

But wait . . . . there’s more!  There will be two sessions of “Ask-an-Attorney” – the first from 9:00 -10:30 and the second from 10:30 – 12:00 where around eight attorneys will be available for short consultations.  Ask –an-Elder Law Attorney is a regular feature at the Jefferson County courthouse in Golden.  Several colleagues and I take turns with making ourselves available for these sessions in Golden.  Friendly and helpful court staff are also available to answer questions about guardianships and conservatorships as an extension of the self-help center in the courthouse for probate matters.  Please attend this informative event if you can!

 

 

The Cultural, Social and Socioeconomic Aspects of Elder Law

14_04 blog pics 001

Harry Moody’s page about medical model for elders

 

In case you’re wondering about the origin of this post, it is the title of a continuing legal education panel I participated in last week which was sponsored by the Boulder County Bar Association.  Other participants were elder law attorneys of diverse backgrounds including Ayo Labode, Jodi Martin and Lorenzo Trujillo and the panel was moderated by Martha Ridgway.  A focus of our conversation was about the challenges in meeting our clients where they are now, and recognizing from where they have come.  Listening carefully is an important skill in this regard.  Each of us was asked to contribute a useful document for the materials.  I chose an old favorite of mine from the University of New Mexico – the Values History: A form to assist you in making health care choices in accordance with your values.  This important document is available online in pdf format for free download here.  There are other resources from the ABA that are also helpful to start the difficult conversation about end of life choices.

For today’s post, I will focus on the health care questions in the context of the cultural and socioeconomic factors that affect each of us – whether it is from our family of origin, our family of creation or our family of choice.  I’ll start with the history of informed consent.   Informed consent has simple and more nuanced definitions that are situation dependent.  I will quote from a good overview I found from the University of Washington School of Medicine, written by bioethicist Jessica de Bord:

What are the elements of full informed consent?

The most important goal of informed consent is that the patient has an opportunity to be an informed participant in her health care decisions. It is generally accepted that informed consent includes a discussion of the following elements:

  • The nature of the decision/procedure
  • Reasonable alternatives to the proposed intervention
  • The relevant risks, benefits, and uncertainties related to each alternative
  • Assessment of patient understanding
  • The acceptance of the intervention by the patient

I have previously blogged about the tragic history of “informed consent” in the context of World War II, the Nazi doctors and the Nuremberg trials.  In this country we have the recent and shameful legacy of the Tuskegee Study, which is a legacy of the disenfranchised that informs many African-Americans’ experience of our health care system and the allocation of its resources.  I thank my friend and colleague Ayo Labode for including reference to this study in her comments at the CLE.

The Tuskegee Study took place in Macon County, Alabama, where 600 poor and illiterate African-American men were enrolled in the study.  The men were offered many things for their participation, including medical exams, meals on exam days and burial stipends.  The study was commissioned by the U.S. Public Health Service and it was called the “Tuskegee Study of Untreated Syphilis in the Negro Male.”  What the participants (and their families) didn’t know is that the study, begun in 1932 and concluded in 1972, was non-therapeutic.  This nontherapeutic study continued even after the introduction of penicillin as treatment for syphilis by 1947, but none of the participants were offered or given the treatment.  In 1972, an Associated Press journalist broke the story of the 40 year long nontherapeutic study.  In 1997, President Clinton gave an apology for the study.  Here is an excerpt from the President’s remarks that is particularly relevant to the topic of this post:

The legacy of the study at Tuskegee has reached far and deep, in ways that hurt our progress and divide our nation.  We cannot be one America when a whole segment of our nation has no trust in America.  An apology is the first step, and we take it with a commitment to rebuild that broken trust. We can begin by making sure there is never again another episode like this one.  We need to do more to ensure that medical research practices are sound and ethical, and that researchers work more closely with communities.

So in order for each of us, as people and as elder law attorneys working in a field with so much psycho-social and emotional content, to be able to respect each others’ differences – we first must recognize them.  Each of us, as adults, needs to confront the difficult questions of who we will choose to be our surrogate decision-maker (agent under a medical POA) in the event we are unable to decide, and we need to talk about what we want in end of life care.  If we are to honor our self-determination and autonomy in our dealings with the medical-industrial complex, we must take the necessary steps now.   This will be my final installment on the May is Elder Law Month theme for this year.

©Barbara Cashman 2014     www.DenverElderLaw.org

In Honor of Elder Law Month: The Law of Aging and the Study of Aging

 

Glass Dome of Ralph Carr Judicial Building

Glass Dome of Ralph Carr Judicial Building

May is national elder law month! As a member of The National Academy of Elder Law Attorneys, I proudly post a blog announcing this theme.  The law of aging? Do I mean physical laws, man-made or what – exactly . . .  Some of those, to be certain.  This another installment on my theme of looking at some of the effects of having so many more people around who are living longer than ever. I’ll start with what I know.  Elder law is a field of practice that is focused on the legal problems of the elderly.  It is not a practice area like securities regulation or DUI defense, where a practice is focused on a particular set of laws (including statutory and case law, along with regulations). No – elder law is a practice area concerned with the legal problems of people “over a certain age.”  Many persons who would be included in the group of “elders” would not consider themselves as such because they don’t think they are “old.”  As we all know, what is considered old is a sliding scale. For purposes of the federal Age Discrimination in Employment Act, the protected class of persons is people age 40 or older.  According to the new Colorado law for mandatory reporting of elder abuse, an elder is a person aged 70 or older.  So you can see that the legal system doesn’t have a clearly defined number when it comes to defining “elder.”

Gerontology is the study of aging and older adults. I am borrowing from the useful definition I found at the Institute of Gerontology at the University of Georgia’s College of Public Health.  They offer a further definition, one that is being updated as we go along:

The science of gerontology has evolved as longevity has improved. Researchers in this field are diverse and are trained in areas such as physiology, social science, psychology, public health, and policy.

A more complete definition of gerontology includes all of the following:

  • Scientific studies of processes associated with the bodily changes from middle age through later life
  • Multidisciplinary investigation of societal changes resulting from an aging population and ranging from the humanities (e.g., history, philosophy, literature) to economics; and
  • Applications of this knowledge to policies and programs.

Gerontology is a multi-disciplinary approach to the study of aging using research methods and applied science.  They didn’t specifically include law in their definition, but I am confident that the development of elder law is part of the evolution of the field of gerontology just as it helps inform the multidisciplinary investigation of the burgeoning number of elders in this country.  I haven’t looked into the career opportunities in gerontology, but I have been interviewed by a couple M.A. students from the University of Northern Colorado.  At first glance, I would imagine that there are many opportunities in this burgeoning field but that because it involves work with elders, it is not highly remunerative.  I did find that UCD offers an adult gerontology nurse practitioner certification.

The doctors serving the population of elders are diverse in their specialties, but the area focusing on the medical and health care needs of elders is known as geriatrics.  It is broad in scope and by its nature (at least in theory) looks at the whole person, with a view to maintain functional independence and self-determination.  Geriatricians are board certified in internal medicine or family medicine and have obtained a certificate in geriatric medicine.  At many geriatric doctors’ offices you can find a team that supports the doctor which might include: nurses, social workers, nutritionists, physical therapists, occupational therapists and other who have special training or experience in treating or working with elders (older adults).  As the baby boomers age, and many of the cohort include geriatric doctors and their staff, there may be a shortage of people equipped to treat this growing number of people.

Some of challenges of an aging population include the medical treatment of diseases associated with aging, and many of these have legal consequences.  Some of the diseases and conditions are Parkinson’s disease, different forms of dementia, diabetes, neurodegenerative disorders, heart disease, arthritis, osteoporosis and hypertension, to name a few.  Chronic diseases that so often in the past led to an early demise are now being managed more successfully.  Likewise, we are facing new medical challenges as a result of aging and its complications.

I recently met with someone who runs a local home care service.  These types of services can be key to allowing elders to age in place in their own homes by making it possible to stay put with the assistance provided by supportive services of providers who come into the home.  Many times people can stay at home and avoid altogether any period of needing to move to a residential facility that offers such services or institutionalization.  One of the topics we discussed was Colorado’s mandatory reporting law, which is now in effect and requires – beginning July 1, 2014 – the mandatory reporting of suspected elder abuse.  While we both strongly agreed that it was about time that Colorado had such protections in place, I mentioned to her that putting elders (people 70 and above) in a class of people does have certain implications for ageism and civil rights.  Don’t get me wrong – I think these protections and wider enforcement of the law are overdue, I just recognize that this area of the law – of determining whether an elder has been abused or exploited by another – contains a fairly large gray area.  The treatment of elders with dignity and respect in a way consistent with their civil rights and protecting them from and allowing fuller redress of exploitation and wrongdoing of others may be a bit of a challenge in many cases, where protection might really mean paternalism.  I will write more on this topic.  As far as I’m concerned, it is a new frontier of civil rights.

 ©Barbara Cashman  2014   www.DenverElderLaw.org

 

 

The Pitfalls of the E-Z, D-I-Y Online Will Form – From A Recent Florida Supreme Court Case

Bench along the Maigue

Bench along the Maigue

In a recent issue of the ABA Journal, under “Trusts & Estates,” Debra Cassens Weiss penned [wait – can I use that verb for an e-zine article?] “Estate Dispute Caused by ‘E-Z Legal Form’ is a ‘Cautionary Tale,’ says Justice.”  The Justice referred to would be a member of the Florida Supreme Court in the opinion rendered in Basile v. Aldrich on March 27, 2014.  The really basic problem with the “will” executed by the decedent is that it was missing a very elementary part – a residuary clause.

I often tell clients in an initial interview that since we don’t know a couple little details like . . .  when we’re going to die and what we are going to own at the time of our death, a residuary clause can be very helpful indeed.

The basic problem with the E-Z legal form will was that it wasn’t much of a will, in fact it was what might be called half-baked.  It contained a listing of specific devises (gifts) to particular people, but didn’t contain a residuary clause to cover anything and everything else not listed specifically.  So Ms. Aldrich’s will was effective for the specific devises listed and ineffective for the remainder of her estate.  As a result, there was a determination of partial intestacy due to what is known as after-acquired property because there was no residuary clause to give any unnamed property to a named person.  So what Ms. Aldrich got was some of her property going via her will and the remainder of her property passing via Florida’s law of intestacy.

What governs much of the law in this field is testator intent – what did the person making the will intend?  Unfortunately, these forms can unduly complicate this determination and can lead to a myriad of unintended consequences.  How can we tell what someone intended when there is such a mess?

While most all of us appreciate simplicity, what looks good on paper to someone who isn’t familiar with the basic components of a valid will can lead to disastrous results.  I got a call once from a prospect who told me “I want a one-page will.”  I responded “you can write it yourself.”  Colorado law recognizes that frontier relic known as the holographic will, which is

a testamentary instrument that is written entirely by the testator in his own handwriting and signed by him and that even if unattested is usually recognized as a valid will in most jurisdictions.

For research for this post, I did look at a couple online purveyors of cheap will forms.  They had nice pictures and some good tips, but really didn’t explain much about what a will is and how it works. But wait, maybe they’re relying on the conventional wisdom that “everyone knows what a will is.”  Not so fast!  The basic problem is that when it comes to writing a will, most of us may not want to use those same simple provisions that are “generally applicable” to everyone and therefore of particular value to no one.  A testimonial given for one of these document generation services described how easy the process was.  Caveat emptor: There is easy and then there is simple.  Will easy work for you as you think it will?  How will you know?  The basic problem with the document generation services is that the human element (communication) is left out.  There is no interviewer asking you questions you might never have thought of or explaining how some common things actually work. But wait, there’s more.  . . . !  I also noted a satisfaction guarantee, lifetime customer support, and a $50,000 guarantee. I read the fine print of the guarantee, typos and all, and noted that the company retains the right to change the guarantee at any time.  Hmmm….

In my 2013 April Fool’s post, I included some fairly hokey pictures of “zombies” along with a serious set of questions about these types of services, which I likened to “zombie law practice.”  I recently received a call from a prospect who asked me point blank – why should I hire you instead of going online for one of these services? So I will include just a couple points from that zombie post of mine:

  • it may not be state (Colorado) specific, but based on another state’s law (how do you know?)
  • it may be designed to apply to a one-size-fits-all category and you’re not sure what your size is. . . .
  • you might zero in on a known problem and not consider its relationship to other issues
  • you might end up “fixing” one problem only to create a difficulty in another area
  • how will you know if you’re asking the right question or getting a sound answer?
  • can you accurately consider the cost of the “downside” for doing nothing, or addressing the situation by handling it yourself?

We lawyers understand that we often bore our clients with describing the important processes we go through to arrive at a particular result.  I know I am one of them.  But we also need to explain the process so that the client can see and appreciate the value inherent in it, how that process is going to get them to where they want to be (or out of where they don’t want to be).  This is why just filling out some cheap form is often like shooting yourself in the foot (or worse).

One last thing that I don’t mention, but that several of my colleagues would respond with is – pay us now or pay us later . . .  to clean up the mess resulting from the badly drafted “planning documents.”  Sadly, some of these messes can’t effectively be cleaned up – the harm to relationships can be irreparable.

Each of us is free to have a will or no will at all, but if you decide to write your own or go online for a “cheap and easy” will, wouldn’t you rather know that you are making an informed choice among viable alternatives?  Under the Colorado Rules of Professional Conduct, attorneys must provide clients informed consent to a particular course of representation.  This means an attorney must educate the client about alternatives so that the client can make an informed decision about how the client wants to proceed.  You won’t get any of this with a “cheap and easy” will drafting service!

 ©Barbara Cashman  2014   www.DenverElderLaw.org

Baby Boomers, Longevity and . . . Marital Agreements

 

La Mia Famiglia - Gava e Fornelli

La Mia Famiglia – Gava e Fornelli

You might be puzzling over my title – but rest assured that with the divorce boom among baby boomers, there will undoubtedly be more marital agreements being written for middle class or moderate income couples.  Most marital agreements (a/k/a “prenups”) are relevant for estate planning purposes and so most of them tend to be drafted by estate planning attorneys and not so many by family law attorneys.  And in case you’re wondering, there is no “standard form” for such an arrangement as the circumstances are as varied as the couple entering into the agreement.

Historically, marital agreements were more along the lines of blueprints for divorce. Some still retain that character, but well-drafted agreements tend to address the marital arrangement as it progresses through time, what a divorcing spouse will be entitled to after five years, ten years of marriage and of course – what those inheritance rights are.  The interesting fact about these agreements is that many couples will get them prior to the marriage or soon into their marriage and then will simply forget about the document and often draft other legal arrangements or take actions inconsistent with the agreement.  A will’s provisions can have interesting effects on the marital agreement and marital agreements that are not well-maintained can be problematic on a number of levels.

Last week Jim Bailey, a Denver attorney who litigates marital agreements, presented to the Women’s Estate Planning Council an insightful overview of the new Colorado legislation regarding marital agreements.  You can read the House Bill (13-1204) concerning the Uniform Premarital and Marital Agreement Act here.

In a nutshell, one of the more interesting details for the new law is the specificity of the waiver provision, which states:

If you sign this agreement, you may be:

  • Giving up your right to be supported by the person you are marrying or to whom you are married.
  • Giving up your right to ownership or control of money and property.
  • Agreeing to pay bills and debts of the person you are marrying or to whom you are married.
  • Giving up your right to money and property if your marriage ends or the person to whom you are married dies.
  • Giving up your right to have your legal fees paid.

Colo. Rev. Stat. Ann. § 14-2-309 (West).

Interesting to think about the focus of marital agreements on financial matters as differences over finances is often cited as a major or contributing factor to divorce.  There was also a comment by Jim Bailey about men tending to focus on the assets while women tend to focus on the relationship….

Bottom line to keep in mind is that in the dissolution of marriage context, the domestic relations court will often very carefully review a marital agreement – so if you’re thinking about one, make it good.

      And what about those pesky non-legal considerations for divorcing boomers. . . . ?

Who you gonna call? Who will a divorced person name as their health care agent or agent under a financial power of attorney after they have divorced? Divorce is a death of the marital relationship and while many of us can have amicable breakups and positive relationships, we are made “legal strangers” to a former spouse.  These decisions are important but difficult to consider – who we will choose to help us out in case of emergency?  We will all die someday, but the fact is with increasing longevity, a majority of people – including those youth-glorifying baby boomers – will be disabled or incapacitated for some period during life.  This is one of the biggest reasons to have durable powers of attorney in place – in case you need them.  Estate planning for blended families can be complicated – not the least of which is figuring out what are your individual and common goals and values.  Sometimes the finances are the easy part!

When older adults merge households, there can be a fruitful mix of traditions, with a few challenges mixed in.  If we think of later life as a time of harvest in the autumn, this can assist in imagining what the harvest may hold for us.  I quote from Anam Cara, the late John O’Donohue’s beautiful book:

when it is autumn in your life, the things that happened in the past, or the experiences that were sown in the clay of your heart, almost unknown to you, now yield their fruit.  Autumntime in a person’s life can be a time of great gathering.  It is a time for harvesting the fruits of your experiences.

Anam Cara: A Book of Celtic Wisdom (2008: HarperCollins) at 167.  Bringing in the fruits of harvest, the intended and unintended, the sweet and perhaps the less sweet, can help us understand the aging process not just as the wearing down of the physical being but as the ripening of the soul, as O’Donohue describes so poetically.  Marital agreements and other important documents can help blended families forge a path toward better understanding and maintaining peace.

 ©Barbara Cashman  2014   www.DenverElderLaw.org

More About Colorado’s New Law on Mandatory Reporting of Elder Abuse

Maggie in Marble Snow

Maggie in Marble Snow

To resist the frigidity of old age, one must combine the body, the mind, and the heart.

And to keep these in parallel vigor one must exercise, study, and love.
Alan Bleasdale

I’ll take a look at two questions answered in the new law.  First – who is an “at risk adult” subject to this law, and second – who are the mandatory reporters? Here’s the link from my previous post about the new law.  Our system of anonymous reporting will come to an end as law enforcement agencies will be collecting information and making these reports.  Okay – very briefly, while we’re on the topic of the reports – these will contain the names and contact information of the at-risk elder and the reporter, the identity of any caretaker/caregiver, the name of the alleged perpetrator, along with the nature and the extent of the injuries.  Within twenty-four hours of receiving the report, law enforcement must notify the county Adult Protective Services (APS) or the District Attorney’s office where the abuse or neglect occurred.

To reiterate, 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).  Person with a disability is defined in  §18-6.5.102(11) as: any person who is impaired because of the loss of or permanent loss of use of a hand or foot or because of blindness or the permanent impairment of vision of both eyes to such a degree as to constitute virtual blindness; is unable to walk, see, hear, or speak; is unable to breathe without mechanical assistance; is developmentally disabled as defined in section 27-65-102(11),C.R.S.; is a person with a mental illness as the term is defined in section 27-65-102(14), C.R.S.; is mentally impaired as the term is defined in section 24-34-301(2.5)(b)(III), C.R.S.; is blind as that term is defined in section 26-2-103(3), C.R.S.; or is receiving care and treatment for a developmental disability under article 10.5 of title 27, C.R.S.

Here’s a quick list of the mandatory reporters according to Colo. Rev. Stat. § 18-6.5-108(1)(a)-(1)(b) who must report such suspected abuse on and after July 1, 2014:

  • Health care providers and other medical personnel including: Physicians, surgeons, physicians’ assistants, osteopaths, physicians in training, podiatrists, occupational therapists, and physical therapists; medical examiners and coroners; registered nurses, licensed practical nurses, and nurse practitioners; Emergency medical service providers; chiropractors; dentists; pharmacists
  • Health care facility and mental health: hospital and long-term care facility personnel engaged in the admission, care, or treatment of patients; psychologists and other mental health professionals; social work practitioners;
  • Clergy members (with exceptions);
  • Law enforcement officials and personnel;
  • Court-appointed guardians and conservators;
  • Fire protection personnel;
  • Community-centered board staff (think senior center or the like);
  • Financial Institutions including: personnel of banks, savings and loan associations, credit unions, and other lending or financial institutions;
  • Care Providers including: a caretaker, staff member, employee, or consultant for a licensed or certified care facility, agency, home, or governing board, including but not limited to home health providers; and a caretaker, staff member, employee of, or a consultant for, a home care placement agency, as defined in Colo. Rev. Stat. § 25-27.5-102(5).

The statute also provides for immunity from prosecution for a reporter (unless the reporter is the perpetrator, co-conspirator or complicitor.

So what happens after a report is made? This will be the subject of law enforcement training and will be interesting to see how the system works.  At this point, it looks like Adult Protective Services and law enforcement agencies will share responsibility for reporting and investigation.  Based on this new law, it is reasonable to assume that the APS reporting will be shifted more to law enforcement in accordance with the goals of the new statute.  It is also worth noting that the definition of “abuse” in 18-6.5-102 is broad and interpreted expansively.

One last point I’d like to share. . . .  An interesting and often overlooked question is what happens to the civil rights of older adults, when as a matter of chronological age and sometimes other circumstances, a person is categorized as an elder and entitled to protections based on their potential status as victim.  Here’s a link to an article by Nina Kohn from 2009 entitled “Outliving Civil Rights.”  Kohn is a law professor and discusses the intersection of constitutional rights and mandatory reporting.  Whether one views these laws designed to protect elders as helpful or paternalistic is a matter of perspective, but she raises interesting questions about the swinging pendulum leaning toward more protections and the dark side of that movement which can involve curtailment of civil rights.

Stay tuned for more on this topic.

©Barbara Cashman 2014   www.DenverElderLaw.org

The Durable Power of Attorney and Financial Abuse of Elders

Four Generations of Family

Four Generations of Family

I’d like to start at the beginning with some terms. I’ve written about them before. . . .

A general durable power of attorney (POA) is an arrangement where one person (the principal) appoints another person (the agent) to act on behalf of the principal regarding matters specified within the scope of the POA.   Under The Uniform Power of Attorney Act, which is Colorado law, powers of attorney executed after Jan. 1, 2010 are by default “durable”  meaning it can survive the disability or incapacity of a principal.  A POA is an important tool people can use to allow others to assist them in the event they need help managing finances.  Another important detail of note is that the POA is also by default a “standing” power.  “Standing” means that the POA can be used as soon as the document is executed by the principal.  This doesn’t mean people rush out to use them.  I usually tell my clients that I hope they never have to use these documents (or more accurately, that their agents will never have to use them) but they are ready to go if needed.  Remember that one of the primary purposes for a durable POA is to keep people out of having to go to probate court for a protective proceeding like a conservatorship. One of my more important questions to a client when considering the use of a POA and who to name as agent concerns trust and accountability.

What is financial abuse of elders?  It can occur on different levels, including; Inadvertent or careless behavior; negligent misuse of a position of responsibility (like agent under a POA); and intentional misuse or conversion of an elder’s money or property.  Colorado’s new law will soon require certain persons to be mandatory reporters of elder abuse.  In Colorado we have AARP ElderWatch, which is a partnership between the Colorado Attorney General’s office and the AARP foundation.  You can get more information about that here.

What are Some Steps toward Prevention?

The National Criminal Justice Reference Service has a good and fairly up to date listing of resources about fraud and financial abuse of the elderly.

It is important to distinguish between types of elder financial abuse: by those scammers who are strangers looking  for easy prey in the form of isolated, lonely, physically or mentally challenged or disabled elders; by adult children, grandchildren or other family members or friends who may be “impatient heirs” who may not be willing to wait until the elder dies to inherit from them.  Temptation is simply too much for many people!

Transparency is another important safeguard for a principal and to help the agent understand there is both assistance and oversight available when needed.  If the agent knows there is likely to be someone “looking over their shoulder” – whether it is another sibling, a professional, or a reporting requirement, this can encourage good habits on the part of the agent that benefit the principal. Other considerations include:

having another set of eyes watching bank and investment accounts

using a professional fiduciary as agent or for bill paying purposes

What makes financial abuse or exploitation of elders difficult to detect?

  • Shame or embarrassment on the part of the elder, particularly when the abuser is a child;
  • Elders often feel a loss of autonomy and have discomfort with vulnerability;
  • Manipulation and Domestic violence type behaviors by person in control of the money; and
  • The fragility of elder’s emotional and physical health.

Elder law attorneys typically have a network of people and both public and private resources that can assist an elder victim of exploitation or abuse.  In a follow up to this post I will talk about the agent’s “job description” and fiduciary duties, along with some ways of detecting elder financial abuse.

 ©Barbara Cashman   2014    www.DenverElderLaw.org

Digital Assets After You’re Gone – Digital Assets in Decedent’s Estates

The Call

 

Part III: This post is about digital assets after you have passed away.  What happens with your digital assets?  This question is simpler to explain (notice I did not use the term “answer”) in the decedent estate administration context, but the answer is a lawyerlike response of “it depends.”

If you would like to view a fun infographic blog post, check out Linda Rosenthal’s post about digital estate planning here.   Okay, let’s start with the basics.

  1. What is Digital Property?

Any online account you may own or any file that is storedon your computer, another device or in the cloud.

2. What might an estate planning attorney want to advise a client about digital assets in the EP context?

Many of us who practice law in this area use a “letter of instruction” as an organizational tool to help a personal representative do their job.  It is not a legal document but rather an organizational document designed to help make the job of the personal representative (PR) easier.  Many people have experience with trying to locate assets, insurance policies, investment accounts, etc., that are nowhere to be found after a person dies.  This is what the letter of instruction is designed to flesh out.  Many people assume that if they have a will or a trust, that this document alone will suffice to guide them to assets.  This is not necessarily so and is often not the case at all.  The will names the PR and describes the assets and property of the person who wrote the will and usually dictates the method of distribution of the property, but often a will or a trust will usually not give a PR any indication as to the identityor nature of many of the assets, how they can be located and accessed, along with other important details.

There are several services online to put into place if you want to make arrangements via persons other than those whom you have selected as your agent or personal representative.   I think it is crucial that a letter of instruction contain a digital access as well as digital assets listing so that the agent, PR or survivors can identify the “known universe.”  How is that universe constellated?  Look to Kipling’s six serving men to assist here: what, why, and when, and how, where and who.

  • Computer storage of information (hard drive or cloud-based)
  • Email accounts, usernames and passwords
  • Online Banking information
  • web domains and the like (internet real estate)
  • intellectual property (e.g., blogs, pictures, etc.)

For better or worse, digital assets that have value can be transferred or disposed of relatively easily via a will or trust.  Management of those assets is another story.  How can estate planners stay on top of the ever-changing landscape?!  How about a special digital asset trust?  You certainly don’t want the private information contained in your will.  I just probated a will where I had to redact the testator’s SSN.  The trust’s ownership of the assets will survive the death of a testator, and (in states outside Colorado where estates are public record) remain private.  Trusts can be amended relatively easily, and a special successor trustee (like a digital asset management company) may be named to manage the assets. This is just one idea to consider among several alternatives.

3. What are some of the difficulties to consider when devising an estate  plan which includes digital assets?

Most states do not have any law that applies particularly to digital assets in the probate context.  In our legal system case law can develop in new areas of the law but a preferable means of  a cogent legal response to this ever-changing landscape would be to devise a new “regime” for such assets by including them in each state’s probate laws.  There is of course a difficulty of the variety of each state’s probate laws, and this mobility is relevant in our mobile American culture.  This effort, a uniform state law regarding digital assets, is what the Uniform Law Commissioners (ULC) is engaged in presently.  In the meantime however, we must consider the lack of clearly applicable law, the uncertainty of existing law, the prevention of identity theft for online activities all in the context of taking steps to make sure that a person’s wishes relating to digital assets are carried out in the way  intended.  This area is a natural place for the ULC to get involved, as the need for uniformity across state lines, along with the consideration of applicable federal laws regarding the internet requires a considered approach.  In the durable power of attorney context, the issues are much more challenging than in the decedent estate context.

4. Fiduciary Access to Digital Assets

There are important distinctions between fiduciary management of digital assets when a person is alive  and the management of those same assets after a person has passed away.  The situation appears to be much more problematic as they concern management of assets while a person is alive and perhaps incapacitated.  The situation is clearer and a bit more manageable as it concerns decedents’ estates.  I previously wrote a blogpost about social media and mourning, here’s an article about a new feature on Facebook that allows people to memorialize, pay tribute to and otherwise grieve on Facebook.

I will have another post on this topic before year’s end – updating our digital accounts and assets should be on everyone’s year-end to do list!

©Barbara Cashman 2013     www.DenverElderLaw.org