Couple Steals from Grandparents via POA

In another example of a good concept gone bad, KUSA TV in Colorado, reported that a Commerce City couple has pleaded guilty to stealing more than $200,000 from their grandparents.

William Young, 41, and his wife, Karen Young, 42, both pleaded guilty to theft of an at-risk adult.

Young had power of attorney for his grandmother, Francies, between June 2009 and December 2012. Investigators discovered that Young and his wife emptied the Gibbs’ bank accounts and used their credit cards for personal use. In total, the Youngs’ stole $227,000.

William Young faces a four to 12 year sentence. Karen Young faces one to three years in prison.

Powers of Attorney are excellent vehicles for facilitating the management of one’s affairs if they become incapacitated. Unfortunately, they can also be abused by the holder of that power. Great care should be taken when selecting the person or persons that you want to step in and manage your affairs (for your benefit) should you be unable to. Often, a professional fiduciary who is accountable to a court or other regulatory agency can be a better option.

Court Appointed Conservator Misappropriates Funds for Elderly

A court appointed conservator in Alabama has been sentenced to three months in Federal prison and ordered to reimburse more than $100,000 of misappropriated funds for several elderly wards. Zondra Hutto was a Tuscaloosa county conservator and was routinely appointed as conservator for elderly wards of the county. As the county’s conservator, Hutto was responsible for the finances of elderly people who were unable to manage their affairs. According to the indictment, which resulted from an audit of her conservator accounts, Hutto knowingly allowed her legal assistant to use funds belonging to her wards for personal gain. Audits of her accounts reveal that Hutto would approve payment for services that were never performed, and “charged thousands of dollars in unneeded postage, storage and lawn care fees.” To read the full article, click here.

Conservatorships are something we usually advise our clients to avoid. They can be a costly and humiliating process for the ward. But they also provide a system of oversight – annual audits and fidelity bonds – and it was this oversight that led to Hutto’s indictment. Powers of Attorney and Living Trusts can avoid conservatorships, but these documents generally waive the requirement that the person(s) holding the power provide accountings to the court or post bond. In this case, the Court did its job. With the rise in elder abuse even among family members, I wonder if we will start seeing less of these waivers in the future.

Married Power of Attorney Requires Non-Spouse Agent for Residence

 
My friend and colleague, Richard Courtney has written about important changes to Mississippi law on Durable Powers of Attorney.

It is important for you to have a durable power of attorney (DPOA) that appoints someone to handle your affairs if you become incapacitated from an accident, illness or dementia and can no longer handle your own finances, insurance or other affairs.  The durable power of attorney is an essential component of every estate plan.  However, if you are married and have named your spouse as your only agent in your power of attorney, then you should “fix” your DPOA to be current with Mississippi law.

Click here to view the complete article. 

12% of Medicare spent during last two months of life.

In a landmark study entitled USA, Inc., the authors examine the US economy as if it were a public company. The story appeared on the February 24, 2011 cover of Bloomberg Business Week. Read the article here, but if you really want to get a wake up call, download the complete 266 page 460 slide presentation that goes into great detail analyzing the problems and potential solutions facing USA Inc. Of particular interest to those practicing estate planning is this astounding statistic: approximately 28% or $101,000,000,000 of the total Medicare recipient spending for 2008 occurred during the final two months of life.*

*Sources: CMS, Medpac, Report to the Congress: Medicare Payment Policy, 3/10

The Wall Street Journal’s online Health Blog post on March 15th titled “A Push for Better End-of-Life Planning” reports that only about a third of Americans have some form of advance directive such as a living will or a medical power of attorney. This is due to many reasons: lack of understanding of the legal or medical terms (the average American reads at only an 8th grade level), poor access to legal advice, and procrastination, among others that we in the estate planning field see all too often.

According to the post, Rebecca Sudore, a physician at UCSF and the San Francisco Veterans Administration Medical Center, says patients need to be able to work with medical professionals well in advance of any end-of-life decisions to clarify their goals and values, which may change over time. The most important decision: choosing a surrogate decision-maker and letting that person know your preferences. Research has shown that “half the time, the surrogate doesn’t know they were even chosen to make these momentous end-of-life decisions on someone else’s behalf, and has no idea what the person would want,” Sudore says.

One model for advanced care planning gaining adherents around the world was developed at Gunderson Lutheran Health System in La Crosse, Wisc.,  where trained case managers work with patients suffering from advanced illness to create and store end of life plans in electronic medical records. Gunderson’s research shows that the program could reduce the utilization of unwanted acute-care services — and their costs — by 25% to 50%.

Extrapolate these savings to the $101B that is spend during the final two months of life, and we’re talking about some real cuts into a bloated Medicare system. I certainly am not suggesting the abandonment of real efforts to save or sustain life. But as the USA Inc. study reports, “When citizens don’t need to pay directly for something (like healthcare) and are given an expensive good / service for free (or well below cost), they tend to consume more of it – it’s basic supply and demand economics.” I would go further and say that when hospitals and physicians receive nonstop reimbursements from Medicare for end of life services, they tend to provide more of it – it’s basic profit margin economics.

Mickey Rooney testifies about elder abuse

Hollywood icon, Mickey Rooney testified before Congress about the abuse he suffered from his step-son and step-daughter. Claiming the pair embezzled over $400,000, locked his refrigerator door, and left him with only enough money for one pair of shoes. The 90 year old actor pleads with Congress to take action against what is estimated at a $2 billion dollar fraud perpetrated on the elderly each year.

Avoiding challenges to Medical Care Directives

While a corporate trustee is often the best selection to manage trust assets, few if any are willing to serve as someone’s health care agent. So how do you ensure that your client’s wishes for end of life decisions are not thwarted? Last week a Minnesota woman admitted in court that she altered a legal document governing her ailing husband’s care.

Lana Barnes entered Hennepin County Probate Court Wednesday morning determined to win aggressive care for her frail husband and remain his medical decision-maker.

Instead, Barnes possibly could face lawsuits and criminal charges. Lana Barnes testified that as guardian for her husband, Al, she felt justified in eliminating two pages of his 1993 health care directive, including passages in which he said he didn’t want to be kept alive by machines.

For the full story, click here.

Most people nominate their spouse as their healthcare agent. Seems logical. But in this case, the wife was seemingly in denial that her husband’s condition was irreversible and terminal. One nurse described her as ‘”desperate” to evoke signs of consciousness from her husband.” Is it fair to ask a spouse or child to have to make these decisions? Naming two agents is one solution – at least it would prevent one from altering the document. But there again, conflict could arise between one agent who agrees with the medical staff, and the other, who may try and thwart the carrying out of the person’s wishes. Should we encourage clients to have these conversations with family members?

Trustee gets off on a technicality

In Bowen v. State, 322 S.W.3d 435 (Tex. App.—Eastland 2010, pet. filed), a Texas jury convicted Deborah Bowen of misapplication of fiduciary property valued at over $200,000 under Penal Code § 32.45.  She was then sentenced to eight years in prison, fined $10,000, and ordered to pay $350,000 in restitution.  Deborah Bowen appealed the decision and was eventually acquitted of the charges on a technicality. Because only about $100,000 was held in trust for the named beneficiary (it did not list all of the beneficiaries) and because the jury charge did not include a lesser included offense, Trustee’s conviction was reversed. Moral: Selecting an institutional trustee whose impartiality is held accountable and who is required to abide by the letter and spirit of the Creator’s intentions, can help prevent these kinds of family battles.