Tuesday, August 18, 2009

Holders of POA's should behave with prudence

This blog has discussed filial responsibility laws (particularly in July 2007), and noted that generally they could become a serious concern for adult children when parents want to use Medicaid resources for custodial or long term care. They can also become a concern when parents are in poverty. Federal and state laws also limit “viatical” disbursements of assets to children for the purposes of getting Medicaid, with stiff look-back period laws, that were tightened in 2006.

I heard anecdotally about a Virginia case (not in the DC area) where someone whose parents had resources was forced to spend his own, after for some reason it was determined he had acted in bad faith. I don’t know the identity of the case or have details. The July 7, 2007 posting here gives the link to Virginia's laws, and the way the word "necessitous" is used, there seems to be just a little wiggle room for those with an agenda.

When an adult child has powers of attorney and/or is a successor trustee on an estate, he or she should behave with prudence, especially in the handling of the parents’ financial matters. The legal environment in most states is an a bit of flux and remains somewhat ambiguous and open to interpretation because the demands of eldercare are increasing so suddenly and so rapidly with demographics and with the way health care is delivered. There was a recent prosecution in New York City over a mishandling of an estate of someone who lived to 105, reported in the media.

Authorities may become particularly concerned when the elder has medical diagnoses of dementia, although the matter is far from cut and dry. In some cases, as noted yesterday, the elder is still allowed to drive, with some supervision. There is an ethical problem in that if the elder is not legally able to take responsibility for his or her own actions as an adult is normally expected to, the caregiving adult child may “own” the responsibility regardless of the caregiver’s wishes. Typically, the law recognizes an informal situation of “responsible in fact”, which allows prosecution, for example, of babysitters or nannies if they cross a certain invisible line of neglect. But there could be reason to insist that the adult child caregiver take on a more formal personal relationship (like formal guardianship) rather than look at the caregiving as a “task oriented” issue. Such a formal designation could force other changes in the caregiver’s life, such as what career her or she pursues (particularly if the caregiver is moving into “retirement”) as he or she is forced to behave like a “breadwinner” for a conventional family. It doesn’t seem to me, from looking at the laws, that Virginia presses this point (although I would wonder what Pennsylvania intended by moving filial responsibility from welfare to family law in 2005); but the problem could increase in the future as Alzheimer’s increases – which is another reason to look at this as a major public health problem and not just an individual family’s issue.

Families should plan for these kinds of situations with conferences and consultations before they become critical.

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