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Tangled Webs


If someone wanted to capture the essence of elder law litigation in a nutshell, they might be inclined to echo the words of the poet: “Oh what tangled webs we weave, when first we practice to deceive.”

While the cases that come into our office are varied in many respects, they almost all share in the proposition that the situation is not simple, and that the complexity arose out of someone’s (or some group’s) initial efforts to be sneaky and devious. Once that dynamic is in play, all the rest follows, and by the time the situation comes to light (comes into my office), the whole thing is a tangled web of deception and missteps that is so contorted as to be almost unfathomable.

At initial consults, I listen, and listen and listen (or read and read and read, since many times I ask for their summaries in writing) – trying to glean the relevant legal facts, but at the same time trying to understand the personalities, motivations and relationships that in the long run will become the meat of the story – and every case is a story. Law is always about two things – the law and the facts.  The law is the skeleton, but the facts are the meat.  One critical role of the litigator is to take the facts and apply them to the bones of the law so that they become something the decision-maker (judge or jury) can visualize, understand and rule on.

The thing that focused my attention on this particular topic was a recently unpublished Court of Appeals opinion. It’s called:  In Re Beverly LaForest Living Trust (click on the name to read the case).  It’s a short case, and in the long run, of little significance, being unpublished and not announcing anything new about the law.  But I think there are pieces of this case that are illustrative of the point I’m trying to make.

In LaForest, daughter (“Patricia”) is power of attorney for her mother (“Beverly”), the vulnerable adult. Patricia is also Trustee of Beverly’s Trust.  Patricia engages an attorney to assist with “Medicaid planning”.  That is, obtaining advice designed to allow Beverly to qualify for Medicaid assistance, while at the same time “protecting” her assets for the family.  In that context, a house, an annuity and a vehicle were transferred to Patricia.  When Beverly died, Patricia claimed the assets transferred were hers to keep.  Her siblings challenged this assertion, saying that while the intention may have been to place the assets in Patricia’s name, the objective was to do so to obtain Medicaid benefits and not as a gift to her, but rather so that she would hold those assets in trust for the benefit of all the siblings and divide them up when Beverly died, as would have occurred had Medicaid not been an issue.  The trial court agreed with the siblings – which is that Patricia could not keep those assets as her own but rather that they were divided among her and her siblings following Beverly’s death.  The Court of Appeals affirmed the decision of the trial court.

Hats. People think of themselves as children, or parents or whatever with respect to their relation to a vulnerable adult. They come to learn the words “power of attorney” and “trustee” – but they never really understand how their role as power of attorney or trustee is distinct from their role as family member.  This case explores the actions that Patricia took as power of attorney and as trustee, and demonstrates that with respect to each hat Patricia wore, certain legal obligations applied, and that her failure to adhere to those obligations was contrary to the law. This is an important, and often misunderstood, lesson for people acting in fiduciary roles with respect to vulnerable adults.  It is also important to recognize and distinguish that while a power of attorney or trustee may have the legal ability to retitle assets, doing so may, notwithstanding, be a violation of their duty as a fiduciary.

Medicaid Planning. Medicaid planning has become a popular concept, and because it often involves transferring property of an impaired older adult, and doing so by someone acting as power of attorney or trustee, it is not surprising when, as in this case, Medicaid planning is used as justification for this type of conduct.

Feeling Entitled. Likewise, in these types of cases, it is not uncommon for one of the children to believe that the transfer of a disproportionate share of the estate to them was what the vulnerable adult would have wanted.  In this case, the Court acknowledges that Patricia saw her mother nearly every day and regularly assisted her mother with her needs; whereas the now-complaining siblings had almost no contact with Beverly throughout this period.  Patricia argues that these facts support the proposition that Beverly intended for her to keep these things and not share them with her siblings.

Magic Words. In the end the trial court decided that even though Patricia may have been the only child that emotionally supported her mother in a material way, the evidence that Beverly wanted her to keep these assets was not adequate to overcome the legal rules that arise when a fiduciary engages in “self-dealing.”  The magic words used by the court were: “Constructive Trust.”  It said that although Patricia may have had legal authority as power of attorney and trustee to retitle the assets into her own name, the law still looks at those assets as being held by her, in trust, for her siblings. The Court of Appeals, deferring as it does to the trial court’s ability to assess the credibility of the witnesses that appear before it, found insufficient evidence to reverse the conclusions the trial court made with respect to the parties in this case.

In the end, the story of the LaForest family, although unique in details, is not unique in the sense of how it came about or how it ended. Patricia stepped on the slippery slope of self-dealing in the assets of a vulnerable adult and fell into the ditch of deception.  When the web of facts was untangled, the law was applied, and she was ordered to reimburse her siblings. [Shout out to my friend and colleague, John Fershee, who represented the siblings.] [Also, just FYI, the spider pictured above is a friendly garden spider I got to know last summer while helping my daughter pick tomatoes.]

To read more on elder law litigation click here and here.

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.

Only in Ann Arbor?

The first time I met my client was early one morning at the Starbucks on Main St. in Ann Arbor. He had flown in the night before, and I had driven down that morning from East Lansing. The Starbucks is a couple blocks from the Courthouse where we had a hearing about his mother, who is the subject of the case.

Waiting there for my client to arrive, I felt like I was from another planet; dressed in a white shirt, jacket and tie; sitting among all these Ann Arborites in their carefully calculated attire – calculated to look like “oh I just threw this on.” I was goggled at a little, but treated with respect and smiled upon. They felt safe here. And I thought, many of these people in another life had lived in the world I came from, and most of them had certainly come from homes where their parents dressed as I dressed. I was not so much a threat as a novelty.

Anyhow my client’s mother is severely demented and lives in Ann Arbor. My client, her only child, lives in another state. She was a fiercely independent woman, but as she has declined, he has become more involved. The main problem has arisen as a result of a group of “friends” – some old, some new. These friends have taken it upon themselves to “protect” his mother’s integrity – as they see it. Whether they have other designs is an issue, but not in this post.

These friends have surrounded this woman and are actively putting up blockades to her family’s efforts to protect her, and to exercise the powers granted to them by her estate planning documents, particularly the medical and financial power of attorneys. They believe they are speaking for this demented woman and protecting her independence and integrity.

The problem is that they don’t get it. They don’t see where the disease is going. They have seen popular portrayals of dementia in films, and have done on-line research in the kinds of places they (Ann Arborites) would go to find information consistent with their world view. They have explored “alternative medicine” treatment options, one even claims to have a Native American insight, and have concluded that she has a 50% chance of beating this disease. In other words, they are, at best, well-meaning but woefully misled meddlers; preventing the family from taking the steps that need to be taken to secure a comfortable future as this wonderful woman goes down the troubling path that her dementia is inevitably going to lead her. In a year or two, when this woman doesn’t know who these friends are and can’t take care of her basic needs; these people will be more sophisticated on the topic of age-related cognitive decline, but it will be too late – and they will be gone. The opportunity to help this woman transition to an environment in which her quality of life is preserved for the long term is now. And we are wasting precious time on this pointless litigation.

I also can’t help but think how outraged these people would be if someone from the other side of the political spectrum were to decide that they would cure an aging parent with prayer. But they can’t see that they are just as confused and misled.

I don’t mean to offend my friends from AA – or maybe I do – just a little. I suppose this type of thing could happen anywhere. People everywhere seem to be becoming aware of age-related cognitive decline, but the level of sophistication among lay people is worrisome. In part I attribute these misconceptions to the popular media portrayals of this horrible disease (an old woman sitting happily in a chair, looking delightful, and waiting to have someone read to her – really?). But, it seemed to me, that the package of issues in this case has a particularly unique Ann Arbor bent.