Little Sheets of Paper

Tonight my Dad is in the rehabilitation center following knee surgery. From what I gather this is a little like giving birth; it is awful for mother and child but both are really happy a few weeks later.

Upon admission, transferring from the hospital and full of pain medications, a vast array of paper was placed in front of him requesting his signature. Some was about insurance, some about care, and some could end his life.

These little sheets of paper included a health care directive to physicians that gave the facility permission to end his life had he checked a box that said so. Four days after surgery and still in considerable pain, I question his competence to make a reasoned decision. The directive is green in color; green for “go”.

Because my mother was there she stopped the process until I could arrive. Upon my arrival the nurse explained again to my parents, and me, the purpose behind the health care directive was “so the doctor would not have to read through all the legalese of a more complex document” . That is literally what she said during her remarkably practiced speech for all incoming patients.

In other words the Doctor has no time to understand the intent of the patient about whether he lives or dies as expressed when contemplating these issues in a competent, sober manner while consulting with his lawyer who then drafted the same based on the law and his experience.

Just check the box on the little sheet of paper sir, it is better for all of us. That’s right, the green one. Green for “go”.

Law is a Lot Like Grandma’s Cooking

People want certainty in the law. A black, A white. Often when a client is upset with the other side in a case they declare their opponent has broken “THE LAW!” as if a trap door will open under the transgressor.

It is often not so clear. Instead the law, in particular the practice of law is a lot like my grandmothers cooking.

How much do I put in grandma? Some. How much is that? A pinch. A smidge. How much evidence do I put on? Enough. You have to have done this to know what fits and leaves a good taste in the judges mouth, rather than something sour.

Much like the law she left a room to wiggle, a room for judgment, which like grandma’s cooking, is what Judges do.

Grandma used a tea-cup for a cup measure. There were no numbers on the side. And you know, it turned out well. Judges exercise a spice known as “discretion“, and that makes all the difference.

 

How Durable is a Durable Power of Attorney?

You know, I am constantly asked, “Mark, now that my loved one is dead, can I still use his durable power of attorney for his benefit, to pay his bills and what not?

No. They are not that durable. And you certainly cannot use it to make dispositions other than what is contained in the loved one’s will.

Durable means it survives incompetency, that is beyond that time the principal is able to revoke it, but is still alive.

If it is not durable it is only “general” or specific to a given task, like the soldier who gives his wife a power of attorney to close on the house they bought before was cut orders for deployment.

If I can quote Neil Young,

Hey hey, my my”

“Rock and Roll can never die”

Once your gone, you can’t come back, “

“When your out of the blue and into the black“.

The same is true for the durable power of attorney. Once you are gone your power of attorney becomes a historical document and the will takes over. Unlike Rock and Roll, the Durable Power of Attorney can die, it dies with its maker.

Obi Wan Kenobi Goes to the Bank

Luke Skywalker drives into Mos Eisley with Ben Kenobi and the two droids his uncle has bought fom the Jawas. They encounter imperial storm troopers looking for the escaped droids.

“These are not the droids you want” Kenobi suggests to the lieutenant trooper.

“These are not the droids we want” the trooper repeats.mos-eisley-spaceport-stormtrooper-high-definition

“Move along” Kenobi suggests

“Move along” the trooper repeats, and the speeder inches away as Kenobi says something about suggestions to simple minds.

The episode from Star Wars is played out daily in banks encountering durable powers of attorney and other estate planning documents. More often than not I am called in to redraft something to make the bank happy, or sometimes I go myself because I apparently really am a Jedi Knight, I have mind control over the young man at the cheap desk in the lobby.

“These are legal documents” I say, and the young man repeats.

“The attorney in fact needs access to her fathers money so she can pay the mortgage this bank holds on his house.”

“I can see your client needs the money to pay us what we are owed” he says.luke at the bar

“Why don’t you take a moment and make the withdrawl” I suggest.

“Let me take a moment and make the withdrawl” he says as he leaves us sitting at the cheap desk.

Now all I need is a catchy theme song.

The Power of Attorney – A Banks Sum of All Fears

Banks live in fear. Things have not gone well for them in recent years, and so even the slightest amount of risk leads them to declare all sorts of reasons why they cannot provide service the way their customers need them to when they are unable to bank for themselves. No where is this more pronounced than in their response to a durable power of attorney executed by a depositor, a principal, in favor of the attorney in fact, or agent.

The idea behind a “durable” power of attorney is that your elect to hand to someone the authority to manage your affairs should you become incapacitated, but before you die, which is when your Last Will and Testament becomes effective. This can avoid an expensive guardianship.

Here is a sample of the gymnastic reasons given not to honor these documents:

1) This document is only a copy. My client was in a coma. I presented my copy to the bank one day to allow my clients brother to get to the money in the bank so that same bank could have its mortgage paid. The young man in the lobby looked at the notary crimp and saw it wasnt raised, so rejected it. I drew my notary crimp out of my briefcase, crimped my signature on the same copy, and handed it back to him. We were allowed access to the money. Apparently that made it an original.

2) The references are to bank accounts generally, not our bank. My remedy is to start incorporating the names of the depository institutions into each power of attorney I draft. Older forms do not take this step, which has now become part of the practice.

3) Our bank is referenced, but not the bank account number. So you can put the account numbers down, but this is risky. What if they fall into the wrong hands? Generally we have started putting at least the last 4 digits down, or all of them if the client approves.

4) If you take money out of the account to pay your principal’s bills, that is an estate planning transfer because all this money is designated to go to someone else when the account holder, your principal dies. You are not authorized by this document to make estate planning transfers. While I have begun drafting around this claim, this dodge underscores the duplicitous absurdity of banks claims in recent years. Does this mean that every time a depositor writes a check he is mindful of the impact on his estate?

5) We honor durable powers of attorney, but only the one we drafted, and your principal hasn’t signed this yet. Please have him sign our form then we will allow you access to his money. Right. The principal cannot sign checks competently now, that is why the agent is there, so he cannot possibly sign a new power of attorney the institution drafted. It’s madness, isn’t it?

In Washington we have a statue that allows us to threaten to sue the bank, and sue and recover attorney fees if they fail to honor these documents in good faith. I think they probably have a right to demand the original, or at least some proof the circumstances suggest the copy is a true and correct version of the original but the rest deserve a stern letter from the lawyer.

The best defense against this nonsense is to develop a relationship with the people in the bank lobby between yourself as principal and your agent well before that day you are not able to go to the bank yourself.  Develop trust in a non-threatening environment, put in time reducing the banks fear, and normally this should pave the way to avoid guardianship and a peaceful disposition of your affairs in later life.

Deathbed Gifts – Many Unhappy Returns

At some point your beloved elderly relative names you as attorney in fact in her durable power of attorney. You graciously accept the role and help her paying her bills and otherwise managing the house as her time on earth grows long.

Months, perhaps years later as your elderly relative lays dying she hands you her antique vase and declares “I want you to have this”. You accept graciously. Later you leave taking the vase with you.

Upon awakening the next day you find she has expired during the night. First there is the shock, then the funeral arrangements, and finally the probate gets underway. Everyone wants to know where the antique vase has gone. You tell the rest of the family our dear departed has given this to you.

The families response: PROVE IT.

The law in Washington is on the side of the family. The question is whether undue influence exists. For a will, contestants must show that undue influence lead to the execution of the will. For those who have done the labor of being attorney in fact who now find themselves defending a deathbed gift, the person receiving the gift must prove he did not practice undue influence by clear cogent and convincing evidence, far more than a preponderance.  Good luck. He had a “confidential relationship” which essentially presumes people in this role take advantage of the elderly.

Plan on returning the vase and save the attorney fees. It is curious at least that while we allow and encourage persons to transfer authority to manage affairs to someone they trust, rather than allowing an expensive guardianship to accrue, we presume they are acting with avarice if something as simple as a human act of gratitude is practiced as a last act in a life.

Powerless Power of Attorney

The time is present day. The situation is your surviving parent has entrusted you with the role of attorney in fact in a power of attorney he had drafted for him years ago by his long time entrusted attorney, or worse, a form he did himself. Dad is in a nursing home, and that nursing home is demanding payment. You go to the bank where you know he has saved money for this point in his life. You present your identification, and the durable power of attorney which was duly notarized and appears official.

The bank will not give you the money. Much like a car salesmen discussing price, someone in the back room, normally described as “Legal” denies the document is adequate to access the funds. Most of the time “Legal” isnt on the premises, and instead is days from reviewing then rejecting your document.

This is the everyday occurrence of the adult child of elderly parents find themselves in. The remedy is usually an expensive guardianship the durable power of attorney was meant to avoid altogether.

Generally I disagree with the bank, but that doesn’t count for much.

More often the best defense is an active offense. What you want to have had before this point is a lawyer who has actually had the experience of finding what works and what doesn’t work with banks since the apocalypse banking crisis in 2008. Often it is just a matter of naming them directly in the document, but you can’t do that now because Dad isn’t really able to know what he is signing. I am afraid this is something you hope the trusted lawyer knew. Sometimes it is a good idea to visit the bank and develop a relationship with the people in the lobby with your parent along with you well before any of this happened.

Sometimes none of this works, and it is time to ask the trusted lawyer what he knows about guardianship.

 

 

Empty Grandmas Accounts Before She Dies to Avoid Probate?

I wrote this post because I saw this question as a top search on my dashboard.

The answer is no. There are several problems with this approach.

1) Crime. That is what this is, Crime. Go to Jail, Do not pass GO, do not collect any $200. You will be characterized as “financial exploiter” at least if you do this in the state named after the first President, and that means you fall under the “slayer statute” and as we all know, slayers do not inherit. Or at least I think we all know this.

2) Breach of Fiduciary duty. There I go again with all that legal stuff. The trouble is that “legal stuff” can get you in trouble, if not in jail, at least sued. Lets say grandma put you on the account “just in case”. It is still not your money. While the bank is authorized to allow you to remove it, the disposition of those funds really have to be for grandma’s benefit and not those who are left here on earth when she passes. She put you on the account because she trusted you, and when we start hearing the word “trust” all kinds of duties attach.

3) Joint Tennant with Right of Survivorship. Lets say grandma opened this account with you and personally, not the bank employee, checked the box that says this or shortened to JTWROS. That is a will substitute that means when she dies the money is yours without probate. Note the timing. It will not be a defense to say that you will inherit this money some day anyway through this non-probate transfer. What if she needs the money before then?

I suspect there are more reasons not to do this but the post is getting too long. You may have good reasons to avoid probate, but this approach is too dangerous. In layman’s terms, don’t take things that don’t belong to you. You don’t have to go to law school to know this. I think we all learned this in kindergarten.

True Stories from the Twilight Zone Part 2

Modern medical science is a wonderful thing. I have witnessed with my own eyes how one can be suspended between life and death in that places Rod Sirling used to call the Twilight Zone. Sometimes however we just age into that place of time and space the rest of humanity calls “dementia”.

In this state your Will does not help you. It is a “dead letter” until you yourself are dead, then zombie like the Will comes to life.

So what do we do in the Twilight Zone? Once there, you are not competent to sign anything that anyone will recognize. Instead someone, often a family member launches a guardianship proceeding. This takes at least two lawyers and the associated cost; one to file the petition and one appointed by the Court to act as your guardian ad lietum.  If in your demented state you declare you are not a danger to yourself financially or physically a third lawyer is assigned and we may end up in trial.

I have been such a third lawyer. Even though it was clear my client was hearing only the signature strings of The Twilight Zone we spent a day in trial. Washington’s guardianship statute does not give the third lawyer the latitude to concede defeat, he must go to trial.

And so on a sunny day in early May I spent my time in trial with my elderly client who wandered around the courtroom during the proceeding, hollering things like “There is the Judge, on his Altar!”. ( Some lawyers I know might say my client wasn’t so demented after all.)

The cost of all of this was well over $10,000 to the client. The experience: priceless.

The take away from all of this is there has to be a better way. Is there not a means to convey to some trusted person or people a means to handle financial and health care decisions when you cannot? The short answer is yes.

1) Durable Power of Attorney. The power of attorney means you hand someone else the authority to work for you in your place. It is “durable” because it survives your incapacity or dementia. Otherwise if not referred to as durable, the law says that paper lapses because you are no longer able to revoke it when you are in the Zone.

This document can be effective immediately, leaving open the chance someone might use it a little too early, or “springing” taking effect when you can find a doctor willing to say in writing you cannot handle your affairs any longer.

The revocation and reassignment of this authority as dementia approaches is the stuff of legend in my business, leading to that court fight and perhaps guardianship you tried to avoid in the first place.

2) Care Managed Trust or Revocable Living Trust. This device allows you to put into your own hands as Trustee then the hands of a trusted person as the successor Trustee all your property. It can also take the place of your Will. It is not a “dead letter” as you enter dementia but instead is very much alive and continues to operate as you pass from the Twilight Zone across the Great Divide. It can avoid probate.

I have yet to see one of these instruments come into the office that has not been terrifically expensive to set up, maintain, and in the end, doesn’t have all the property transferred to it, necessitating a probate of the left out property.

All kinds of things happen in the Twilight Zone. The best you can do is make some judgments ahead of entering that dimension of time and space, decide to trust or not to trust, and then live the rest of your life.

True Stories from the Twilight Zone Part 1

There is a dimension of time and space where modern medical science allows us to linger before passing over and beyond the Great Divide. States have sought to address this waypoint in the Twilight Zone by mass producing easily signed directives to physicians designed to allow persons wishing to pass on without being kept alive by machines. The form is often referred to as a “living will” in the vernacular.

I Googled for the form and found someone is willing to sell you a document for ten bucks that is identical to that which is available for free at Revised Code of Washington 70.122.030. Now the form is fine, but it is simplistic, and mandates decisions made the signatory who is usually without either a law or medical degree.

True Story: The date is January 10, 2011. My best friend lays in a coma in Seattle. His brother and I are looking at the directive to physicians I drafted and my friend signed just months earlier. The neurologist thanks me for the clarity and ultimate discretion we vest with the medical attorney in fact, namely his brother. Doug was in the Twilight Zone, and he wasnt coming back. There had however been several days earlier where it was questionable whether he would return. Because we had a conversation about what the directive should look like, because we have some understanding of what it means to get the heart and lungs going again, and because I at least possess the legal understanding of what we were doing, we were allowed the grace to hang on to hope for just a few more days before removing life support.

The forms will not give you this personal intent as drafted expressing accurately the mix of legal and medical desires of the individual. Maybe that is why it is free.

More True Stories: I am a veteran of story after story of families coming in for the probate telling me the recently passed loved one had a directive to physicians neatly printed on a 4 X 6 card which, when received by the medical staff caring for their loved one,  meant right away, “care”, as we have come to understand it, was withdrawn. Death soon followed and no one in the family was really ready for the event.

Perhaps the question a person signing this document really has to ask themselves is How quickly do I want to leave the Twilight Zone?