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Defensive Use Of Powers Of Attorney

by with No Comment Asset ProtectionLegal TechnicalSNT

The General Durable Power of Attorney (“GDPOA”) has often been described as the most effective burglary tool since the crowbar.  The defensive use of the elder principal’s GDPOA can minimize the potential for Elder Financial Abuse.  Proper counseling of an elder by the estate planning attorney, and customized drafting of the GDPOA to address the elder’s specific worries about the powers granted to the agent, can help minimize the potential for EFA. 

Bigstock-Power-Of-Attorney-30978749Of particular concern to many elders is the abuse of gifting authority under the GDPOA, or other granted powers that could defeat her estate plan if used improperly by an unscrupulous agent.  Other problematic powers that are routinely granted under many boilerplate GDPOAs include the authority to make tax-motivated transfers, to exercise disclaimers or powers of appointment, to sell assets subject to a specific bequest in the elder’s Will, to change beneficiary designations for the elder’s non-probate assets (for example, life insurance, retirement plans, accounts with transfer-on-death or pay-on-death designations), to create joint interests with the right of survivorship, and to create, amend, revoke, or terminate an inter vivos trust that would avoid the probate process. 

The law in many states requires a person to opt-in to each and every power granted under a GDPOA, especially the powers noted above.  Although the expense of customized drafting, explanations of opt-in powers and review of worst case scenarios for the illicit use of granted powers can be significant, these approaches can provide enhanced protection against EFA for the elder and the intended beneficiaries of her estate plan.

Additional protection against EFA can be afforded by setting forth in the GDPOA specific duties of the agent (signed and acknowledged by the agent), including the duties of loyalty, good faith, and due care; a duty to keep the principal’s property separate from that of the agent; the duty to denote clearly any of the principal’s property titled in the name of the agent in that capacity; and the duty to keep a contemporaneous record of each transaction undertaken by the agent on behalf of the elder, a running account of all receipts and disbursements as agent, and a full annual (or more frequent) accounting to the principal, her conservator, if any, other persons designated in the GDPOA to receive this information, and to the elder’s executor or other personal representative within 90 days of her death.

The GDPOA should also address self-dealing and conflicts of interest that inure to the benefit of the agent, including any specific examples the elder wishes to identify (for example, investments in the agent’s personal business or improvements to the agent’s residence or other properties).  The GDPOA should also outline whether and how the agent is to be compensated for services while acting as agent (for example, hourly at a specified rate, or a fee based on the value of the assets under management).  Fairly compensating an agent can encourage him to be more honest, attentive and diligent in the exercise of his duties, and help forestall EFA.

If you are interested in learning more about what it means to be a Lawyer With Purpose.  Come join us in Phoenix for 2.5 days of technical legal information at the 2014 Asset Protection, Medicaid & VA Practice With Purpose Program October 20-22nd.  Click the link to register today!

Kristen M. Lewis, Esq., Member of the Special Needs Alliance and Fellow of the American College of Trust and Estate Counsel.

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Elder Justice Act – Federal Initiatives

by with No Comment Legal Technical

On March 23, 2010, the Elder Justice Act (“EJA”) was signed into law by President Obama as part of the Affordable Care Act (a/k/a “Obamacare”).  See Patient Protection and Affordable Care Act, Pub. L. 111-148 (2010), as amended by the Health Care and Education Reconciliation Act, Pub. L. 111-152 (2010), collectively referred to as the Affordable Care Act.  The EJA creates a new Subtitle H to Title XX of the Social Security Act, largely codified at 42 U.S.C. § 1397j to § 1397m.  The EJA is the first comprehensive national legislation directed at elder abuse. 

The EJA is a four-pronged initiative intended to accomplish the following.

a.             Enhance national coordination of elder justice activities and research.

b.             Establish forensic centers to develop expertise and jurisprudence in elder                 abuse, neglect, and exploitation.

c.             Strengthen adult protective services.

d.             Enhance the capacity of long-term care settings to prevent and respond to elder                 abuse, neglect, and exploitation.  See Brian W. Lindberg, Charles P. Sabatino,                 Esq. and Robert B. Blancato, Bringing National Action to a National Disgrace:                 The History of the Elder Justice Act, NAELA Journal, Vol. VII, No. 1, Spring 2011, 105, at 115.

Bigstock-Old-Hand-Care-Elderly-7749577Elder Justice Coordinating Council

In recognition of the importance of coordinating the many federal, state, and local agencies and entities with jurisdiction over myriad aspects of elder abuse, neglect, and exploitation, Section 2021 of the EJA establishes the Elder Justice Coordinating Council (“EJCC”).  See Sections 2021 to 2024 of the EJA, 42 U.S.C. § 1397k.  The EJCC is required to make recommendations to the Secretary of the Department of Health and Human Services every two years to report on the coordination of elder justice activities by relevant federal agencies, and to report to Congress on accomplishments, challenges and recommendations for legislative action.  Current members of the EJCC include the following.

a.              Secretary, U.S. Department of Health and Human Services.

b.              Attorney General, U.S. Department of Justice.

c.              Director, Consumer Financial Protection Bureau.

d.              CEO, Corporation for National & Community Service.

e.              Secretary, Department of Housing and Urban Development.

f.               Secretary, Department of Labor.

g.              Secretary, Department of the Treasury.

h.             Secretary, Department of Veterans Affairs.

i.               Office of the Chairman, Federal Trade Commission.

j.               Chief Postal Inspector, Postal Inspection Service.

k.              Commissioner, Social Security Administration.

The EJCC held its inaugural meeting in October 2012, followed by two sessions in May and September of 2013.  For further information regarding the current EJCC initiatives, proposals and numerous “white papers” on the issues, click here. 

On my next blog post, I'll address the use of a multi-disciplinary team of allied professionals to help combat Elder Financial Abuse.

Kristen M. Lewis, Esq., Member of the Special Needs Alliance and Fellow of the American College of Trust and Estate Counsel.

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Remedies for Elder Abuse: Criminal Prosecution

by with No Comment SNT

Additional challenges for prosecuting elder financial abuse are presented by the growing number of interstate and international mass marketing fraud cases.  Such cases include “grandparent scams,” foreign lottery scams and internet scams.  Coordination among local law enforcement authorities in multiple jurisdictions (domestic and international) is labor-intensive and problematic. 

Bigstock-Brown-Gavel-46632817Lines of communication between local agencies and the numerous federal agencies that have authority to investigate and prosecute interstate and international scams is either informal or non-existent.  Federal agencies involved in combating interstate and international financial crimes include the following.

 

  • Consumer Protection Financial Bureau.

  • Federal Trade Commission.

  • Securities and Exchange Commission.

  • Postal Inspection Service.

  • Federal Bureau of Investigation.

  • Department of Justice.

  • Department of the Treasury.

Federal elder justice programs are administered and funded through a complex intergovernmental structure.  The Older Americans Act of 1965 (42 U.S.C. § 3001 et seq.) established the Administration on Aging (“AoA”) within the Department of Health and Human Services (“HHS”) as the chief federal advocate for older Americans, and assigned responsibility for elder abuse prevention to the AoA.  In April 2012, HHS established the Administration for Community Living, which brought together the AoA, the Office of Disability and the Administration on Developmental Disabilities “to better align the federal programs that address the community living service and support needs of both the aging and disability populations.”  See GAO, Elder Justice: More Federal Coordination and Public Awareness Needed (GAO-13-498)(Washington, D.C., July 10, 2013), at 4 (available at www.gao.gov/assets/660/655820.pdf). 

The Department of Justice supports HHS elder justice programs and activities by pursuing civil and criminal prosecutions of elder abuse and neglect, as well as health care fraud matters.  Id.  at 7.  The Consumer Financial Protection Bureau (an independent Bureau within the Federal Reserve System) is charged with combating elder financial abuse through its recently established Office of Financial Protection for Older Americans (authorized by 12 U.S.C. § 5493(g)(3)) (“OFPOA”). Id. at 8.  The functions of the OFPOA must include activities designed to facilitate the financial literacy of persons age 62 and older to protect them from unfair, deceptive, and abusive practices.  See 12 U.S.C. § 5493(g)(1).

Kristen M. Lewis, Esq., Member of the Special Needs Alliance and Fellow of the American College of Trust and Estate Counsel.


 

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Financial Abuse of Elders & Other At Risk Adults – Part Seven

by with No Comment Uncategorized

The Crime of the 21st Century

The federal Older Americans Act mandates the establishment of a Long-Term Care Ombudsman (“LTCO”) program in all 50 states and the District of Columbia.  (The term “ombudsman” is Swedish for “citizen’s representative.”)  The LTCO is “dedicated to enhancing the lives of long-term care residents through advocacy, education and resolution of resident complaints, including those related to abuse, neglect and exploitation.”

See NCEA site at http://ncea.aoa.gov/Stop_Abuse/Partners/LTC_Ombudsman/index.aspx. 

Included in the scope of long-term care facilities subject to LTCO oversight are the following. 

·      Skilled nursing facilities (“nursing homes”).

·      Assisted living facilities.

·      “Board and care” homes (often referred to as “personal care homes” or “host homes”).

·      Intermediate care facilities for those with intellectual disabilities.

·      Other community living arrangements (e.g. group homes).

Bigstock-Abusedpiggy-6651443See National Long-Term Care Ombudsman Resource Center website http://www.ltcombudsman.org/about-ombudsmen.

The LTCO program is usually operated under the auspices of the “State Unit on Aging” or local “Areas on Aging,” which are part of the “Aging Services Network” mandated by the Older Americans Act and developed by the U.S. Department of Health and Human Services (“HHS”) Administration on Aging (“AoA”).  In April 2012, HHS established the Administration for Community Living, which consolidated the AoA, the Office on Disability, and the Administration on Developmental Disabilities. 

Complaints to the LTCO may be initiated by a call to the State Unit on Aging, the Regional Area Agency on Aging, or State LTCO Office, by either the resident herself, or on behalf of the resident by a friend, family member or other third party.  The NCEA maintains a database of all state LTCO contacts (state, regional and local), which can be accessed by calling the Elder Care Locator service at 1-800-677-1116 during regular business hours, or by visiting http://www.ltcombudsman.org/ombudsman.  Residents can also initiate a complaint in person when LTCO staff make periodic site visits to the facilities in their jurisdiction. 

Complaints of residents are informally investigated by LTCO personnel and resolved, if possible, by informal techniques such as mediation, conciliation, and persuasion.  If the complaint is not resolved informally, or if the nature of the complaint is so serious that it requires the involvement of a regulatory agency or law enforcement (e.g. alleged physical or sexual abuse or licensing violations), the matter is referred to the appropriate agency for formal investigation and resolution.  LTCO staff will engage in the necessary follow-up to assure that the formal investigation proceeds towards resolution of the resident’s complaint. 

All complaints lodged with the LTCO must be kept confidential, unless the resident authorizes the release of her name.  It is against the law for a facility to retaliate or discriminate against a resident for making a complaint to the LTCO.  Any person who makes a complaint in good faith is protected from civil and criminal liability.

In addition to the largely voluntary nature of many complaints lodged with the LTCO by, or on behalf of, residents of long-term care facilities, state law provides that certain persons having reasonable cause to believe that a resident or former resident has been abused or exploited while residing in a facility are mandatory reporters of such abuse or exploitation. Such reports are directed to be filed with the state Medicaid program and an appropriate law enforcement agency or prosecuting attorney. 

State law typically precludes public disclosure of the identity of the resident, the alleged perpetrator and the reporter unless required to be revealed in court proceedings, or upon the written consent of the person whose identity is to be revealed, or as otherwise required by law.  Retaliation or discrimination against a mandatory reporter is also prohibited.

Part 8 of this series will discuss several other legal resources for addressing alleged elder abuse.

Kristen M. Lewis, Esq., Member of the Special Needs Alliance and Fellow of the American College of Trust and Estate Counsel.

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Financial Abuse of Elders & Other At Risk Adults – Part Six

by with One Comment Uncategorized

Adult Protective Services: First Responders for Reporting Elder Financial Abuse

All 50 states and the District of Columbia have an Adult Protective Service (“APS”) agency to investigate reports of elder abuse, neglect or exploitation, as required by Title XX of the Social Security Act.  The stated mission of an APS program is generally “to ensure the safety and well being of elders and adults with disabilities who are in danger of being mistreated or neglected, are unable to take care of themselves or protect themselves from harm, and have no one to assist them.”  The primary guiding value of an APS program is as follows: “every action taken by Adult Protective Services must balance the duty to protect the safety of the vulnerable adult with the adult’s right to self-determination.”

Bigstock-Abusedpiggy-6651443The general process for generating an APS investigation of alleged financial abuse of an elder includes the following steps.

 

  • A report is made to APS by someone who suspects elder abuse, exploitation, or neglect.  The reporter may call an abuse “hotline” or a state APS office.  The National Center on Elder Abuse maintains a database of all state APS contacts, which can be accessed by calling the Elder Care Locator Service at 1-800-677-1116 during regular business hours, or by visiting https://ncea.acl.gov/Resources/State.aspx.  The reporting person is protected from both civil and criminal liability.If the case meets all eligibility criteria, (e.g. age of victim, type of abuse, victim’s vulnerability), APS assigns a priority response time to the report based on the level of victim risk; involves emergency responders, if necessary; and assigns the report to APS for investigation.
  • APS staff contacts the elder victim within the state regulated timeframe (keyed to the urgency of the situation) to assess any immediate risk, and to investigate and substantiate the alleged abuse (with the assistance of law enforcement, if necessary).  Caseworkers then assess the current risk factors for the victim, including her ability to understand her risk and to give informed consent to further investigation and provision of protective services.If the victim consents, the APS caseworker develops a service plan, which may include both short-term emergency services (shelter, meals, transportation, home health services, medical or mental health services) and long-term services that are monitored by APS to assure that the risks to the victim are reduced or eliminated.  Substantiated criminal activity is referred to the prosecuting attorney.If the victim has the capacity to understand her circumstances and refuses an investigation or protective services, the APS caseworker may refer her to other resources before closing the case.  However, if APS has been able to substantiate if an elder has been abused, neglected or exploited by another person, it is required to report this to law enforcement even if the victim does not consent to the report.
  • While the demand for APS services has increased dramatically, program funding has either remained level or decreased in recent years.  In Georgia, APS case referrals in 2012 were up 22% from 2011 and up 67% from 2008.  Nevertheless, funding has not increased to meet this demand.

Part 7 of this series will discuss the Long-Term Care Ombudsman programs mandated by the Older Americans Act for addressing the elder abuse complaints of persons residing in nursing homes or other long-term care settings.

Kristen M. Lewis, Esq., Member of the Special Needs Alliance and Fellow of the American College of Trust and Estate Counsel.