The Legal Checkup Blog

Asset "Protection" -- Poor Planning Is Worse Than No Planning At All.

Posted by Judith Flynn on Fri, Sep 30, 2011 @ 16:09 PM

The call from the facility to inform me that Howard had passed away triggered a variety of emotions in me, but not for the reasons you might expect. Howard had no family and had not executed a Durable Power of Attorney (DPOA) or Health Care Proxy (HC) to appoint someone to make decisions on his behalf. So, when Howard was suffering from dementia and no longer able to live alone in his apartment, Elder Protective Services asked me to serve as his court-appointed guardian. As Howard’s guardian, I became responsible to make all medical decisions on his behalf, secure appropriate housing and services, and to manage his finances.

I called my colleague Kate to incorporate her geriatric care management services into Howard’s plan. Kate and I moved Howard to an assisted living facility and put services in place to allow him to retain as much independence as possible. Even after the transition to a nursing home became necessary, we maintained companion services to provide Howard with a few hours out of the facility each week.

Kate and I have worked as a team to advocate for all of Howard’s needs, and although his dementia advanced he always knew who we were. In fact, Howard once informed the nursing home staff that he was not happy about something and assured them that “his people” were going to look into it. We were proud to serve as “Howard’s people” and so honored that he realized our role until the day he died. Although we were not “family,” we treated Howard with the respect and dignity we would demand for our own parents.

As my week went on, I was consulted by five siblings regarding their father, Bob, who they believe is being financially exploited by their sibling, Jack. Jack, as agent in the HCP and DPOA, is trying to place Bob in a nursing home contrary to Bob’s wishes and despite the fact that Bob is doing well at home with significant assistance. The reality is that Bob’s care is expensive and funds spent on his care now will reduce his children’s future inheritance. As I listen to this family’s story, it appears that Jack is not acting in his father’s best interest, not upholding his father’s wishes to remain at home and is motivated solely by his own financial gain.

ently, Bob appointed Jack over the objections of all the other children simply because he is the oldest. Jack does not get along with any of his siblings. He has had trouble managing his own finances and filed for bankruptcy in the past. Jack was simply not an appropriate choice to serve as Bob’s agent, and although Bob realized that when he executed his documents, he did not want to hurt Jack’s feelings.

To make matters worse, Bob took steps to protect his assets from the cost of nursing home care by conveying his home and assets to a trust. Yes, you guessed it – Jack is the trustee. Bob is now at risk of being mo
ved to a nursing home against his will, despite the availability of sufficient funds to provide the necessary care in the home.

The cases of Howard and Bob illustrate that poor planning is worse than no pla
nning at all. Make no mistake – the message here is not that planning is not important. It is critical to understand, however, that the primary purpose of planning and protecting assets is to ensure your own future care and security. If your intent is to remain in your home as long as possible, then your planning should reflect that.

You must appoint agents and trustees in a manner that respects your wishes, protects your security and does not leave you vulnerable in the event that relationships go bad in the future.

Howard did no planning at all, but as his Court-appointed guardian I had a duty to use his funds fo
r his benefit and to keep him in the least-restrictive environment as long as possible. In contrast, Bob’s poor planning left him unprotected because in his effort to “protect” assets, he gave up all control over his future security.

If you do not want to find yourself in Bob’s situatio
n, work with an elder law attorney to ensure that your documents include the necessary protective provisions and be willing to make the difficult decisions that are necessary to appoint agents who will hold your wishes and best interests paramount to their own.

Tags: asset protection, elder law, Legal Check Up, Legal Documents, Estate Planning, disability planning, Elder Financial Abuse, lack of capacity, undue influence, Durable Power of Attorney, Health Care Proxy, Last Will & Testament, duress