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This Could Get Interesting

The Michigan Supreme Court is considering a case involving the issue of a medical provider and Michigan law regarding surrogate decision-making. Specifically, Margaret Roush was a resident of the Laurel’s of Carson City, a skilled nursing facility. Click here for Court of Appeals decision.

Ms. Roush had nominated a patient advocate. On October 24, 2012, that nominated patient advocate agreed that Ms. Roush should remain in the facility’s care. However, a dispute arose as to whether that nominated patient advocate’s authority had been properly invoked (that is, whether two doctors had certified Ms. Roush unable to make her own decisions). The resulting retention of Ms. Roush continued until November 21. In the intervening period, two doctors did in fact find Ms. Roush unable to participate in her decision making, but additional medical evidence was also produced to support the proposition that Ms. Roush was capable of making her own decisions; and, importantly, on November 12, Ms. Roush formally revoked the existing patient advocate designation.

Ms. Roush was ultimately allowed to leave the facility, and died a short time later in her home.

The facility was sued for false imprisonment and intentional infliction of emotional distress, among other things, which claims arose out of the period during which Ms. Roush was forced to remain in the facility after the dispute arose, and after she revoked the patient advocate designation. The case was dismissed at trial court on summary disposition in favor of the facility/defendant. The Court of Appeals, in its unpublished decision, reversed the trial court, finding that sufficient questions remained to preclude summary disposition to the defendant. The Michigan Supreme Court is now considering whether or not it will review the decision of the Court of Appeals.

Wherever it goes from here, if nothing else, this case reminds healthcare providers of the sticky situations they can find themselves in when the laws regarding surrogate decision-making are not carefully adhered to. A few years back, many nursing homes were cited for failing to use the proper procedure to rely on a patient advocate’s direction. That is, they were commonly deferring to nominated patient advocates for medical decision-making, before and without having two doctors formally certify the patient as unable to make their own decisions. And all of this falls within a long history of the medical community refusing to accept the technicalities of the legal process whereby one person can make decisions about the care of another (surrogate decision-making).


Important October BEM Changes

DHHS released new BEM language to take effect October 1, 2015. Click here to read them. Of particular note are the new provisions for long term care partnership insurance payments and care contracts.

As to the long term care insurance partnership, this concept has been addressed in prior blogs. What we learn from the new language is that the protection will only apply to payments actually made to or for the benefit of the insured. Meaning that the supplemental asset protections accrue only as the benefit is received (as opposed to simply allowing for a supplemental asset protection in the amount of the total benefit purchased).

The new long term care insurance language expressly precludes assets protected by the partnership policy payments from estate recovery.

The language regarding care contracts is more troubling. These changes arise out of the Jensen Court of Appeals decision, also discussed in prior blog posts here.

The new care contract provisions segregate contracts for personal care and home maintenance.

The presumption of gratuitous care only applies to relatives. However, and importantly, the requirements of having a Medicaid compliant contract applies to relatives and non-relatives equally.

The new provisions preclude any payments after the person receiving care is in a nursing home or “adult foster care home (licensed or unlicensed)” [I think they mean “assisted living facility”] = a big problem for professional care providers hired to supplement care particularly in ALFs.

For clients applying for Medicaid who have received personal care assistance, even through a professional agency, the new policy will require providing the contract to DHHS for review.


Bittner’s Bite

So we have a new published opinion on a probate court case – something unusual these days.  In Re Conservatorship of Shirley Bittner was published September 8, 2015.  Click here to read the case.

In Bittner, the probate court imposed a conservatorship over the vulnerable adult, and did so over what the Court of Appeals calls her “strenuous objections.”

The subject of the petition was Shirley Bittner.  The petition was brought by her daughter Suzanne.  Shirley was a 74 year-old widow.

Suzanne had been granted power of attorney over Shirley by Shirley, and had been made co-trustee of Shirley’s trust; that is until Shirley concluded that Suzanne had misused those powers for her own benefit.  At that time Shirley petitioned the Court to recover the property she believed had been misappropriated by Suzanne.  Suzanne countered with a Petition to have a third party (public fiduciary) appointed as Shirley’s conservator.  Meanwhile Shirley appointed a second daughter, Stacey, as her agent under a new power of attorney.

The probate court took evidence and appointed Stacey (the new agent under power of attorney) as conservator.

Appointment of a conservator is a two-prong test.

1. Is the person unable to make their own decisions (are they sufficiently impaired to invoke the Court’s jurisdiction to take away their rights)?; and

2. If the Court does not act, will this person’s resources be mismanaged?

Both prongs must be met to impose a conservatorship over an adult.

The Court of Appeals reviewed the decision of the trial court and reversed.

As to the first prong, the Court of Appeals found that the evidence was marginal.  Shirley clearly had some impairments, but it was not so clear that those impairments rose to the level necessary to impose a conservatorship over her.

As to the second prong, the Court of Appeals found no evidence that anything was being mismanaged, at least now that Stacey was acting has power of attorney.

The case is important, as it fires a shot across the bow of the trial courts that are routinely imposing conservatorships over older adults.  And importantly, by analogy, the case will serve the same purpose with respect to the imposition of guardianships.

But nothing is simple in terms of this area of the law.  As to the law, there is no question that the Court of Appeals is right on.  No doubt courts are way too quick to impose guardianships and conservatorships without sufficient legal basis.  That said, it is also true that there is a great deal of mischief in the world of vulnerable adults.  Once one child is taking advantage of mom, one wonders whether the next child is likely to do so and/or whether in time mom will be persuaded to create yet another power of attorney appointing the daughter who allegedly misappropriated assets, or yet another child who may or may not be acting in mom’s best interests.  Mom is vulnerable – that’s the point.  So, left unchecked, these cases can go on and on.  Where there is money and family dysfunction, there is a high likelihood of further issues.  I would suggests that there is something to be said for probate judges who have seen enough of these cases to want to simply grab control, create a conservatorship, and thereby put themselves in the position of monitoring what goes on in the future; and by doing so, shut the door to future mischief.

Accordingly, I appreciate the Court of Appeals upholding the rules.  I greatly respect my many colleagues who recognize that taking away the rights of an adult should only be done as a last resort.  But I worry about law that makes trial judges less willing to step in and grab control when it is clear that the mayhem has begun.

VA and LTC Planning

I recently responded to a post on a listserv in which the issue of using irrevocable trusts to “protect assets” in order to obtain VA Aid and Attendance pension income was the topic.  It caused me to organize my thoughts on this important issue, which are expressed below.


The Veterans Administration has a program called “Aid and Attendance” which offers additional income to Veterans and their spouses who have high care costs.  The program has income and asset rules.  The asset rules limit the resources the applicant can own.  Unlike Medicaid, VA does not impose a penalty on applicants who give away their resources in order to qualify. [See prior posts for discussion of proposed changes to VA asset transfer rules.]

As a result, it has become popular for some planners to advise clients to transfer their resources (or at least so much as would be necessary to meet the asset rules) into irrevocable trusts, which trusts expressly provide that the older adult applicant retains no right to the property in trust.  These older adults are told that if they trust their children, then the children will no doubt use the money they control in the trust to pay for the parent’s care if needed – notwithstanding the fact that the children would have no legal obligation to do so, and notwithstanding the fact that the children are undoubtedly the beneficiaries of whatever is not used for their parent’s care.

Whether and when attorneys should be advising clients to engage in such planning is a hot topic.

My Thoughts:

The idea of telling a vulnerable adult to divest themselves of assets so that they can get a thousand or two thousand dollars a month of additional income is no small thing.  Further, and most critically, the idea of telling clients that if you give your money away, it can be used for your benefit in the future is the rub in this type of counseling.  The ‘wink and nod’ part of the advice – in which clients are told that they should give their money away by putting it in an irrevocable trust that expressly provides they have no retained rights while suggesting at the same time that the money will be their for their quality of care in the future if they need it, raises serious concerns to me.

Nearly every older person will say that they trust their children (and many of them do), especially when their children are participating in the meeting and/or have suggested that they need to do something to “protect their assets.”  I would suggest, if that is the foundation of the planning strategy, why use an irrevocable trust?  If in fact your children are going to pay for your care in the best place possible in the future, why not just give them the property/money outright?  I would also suggest that the common experiences of attorneys who practice in this area would suggest that many (most?) clients are misplacing their trust – and further that there are very few families that any attorney will counsel in which that attorney would have adequate evidence to make any conclusions about the motives of the parties involved – or how those motives may change over time.  Because I see myself as being asked to offer advice with respect to the best interests of the vulnerable person, I am not comfortable leading those clients down this path.  And to be sure, in this type of planning, it is largely about where their attorney leads the client.  The alternative to such planning is that perhaps their money is used for their care and not preserved for the next generation.  And while I appreciate that the preservation of the product of one’s life’s work for their loved ones is also no small thing; for me, in terms of what I see my role being, asset protection is always a secondary consideration to controlling one’s quality of care options.

Medicaid divestment rules are certainly part of the equation, but it is much more than that.  As we/I like to tell clients “money = options.”  When clients give away money, they paint themselves into a corner – a corner in which they have lost control over their quality of care choices and are left without any options other than what the government will/might pay for.

As with so many things in the practice of law, every lawyer has to decide where their comfort zone ends.