ETHICAL DILEMMAS AND ELDER LAW
Two areas
Diminished capacity
Who is the client?
DIMINISHED CAPACITY
Eccentricity ≠ lack of capacity
If, at the end of careful questioning, you have no evidence that your client is making her decision out of impaired capacity, it is your job to carry out M’s wishes to the best of your ability. If someone is competent (no diminished capacity), you must carry out your client’s wishes, even if you don’t agree with her judgment.
As a practical matter, even if M can articulate her wishes, her will could be contested by a family member. You might want to suggest, “You seem fine to me, but your estranged son might try to say that you were nuts when you made a will leaving money to your cat sitter. A record of a clean psychological/psychiatric exam might prevent this.”
Model Rule 1.14 comment: How to tell whether your client is diminished or not.
Can your client articulate why she wants to make the decision she’s made?
Variability in state of mind and ability to appreciate the consequences of her actions. Does she say the same thing every time you meet, or is there inconsistency? (e.g. Your client always said she wanted to leave her money to her kids and one day she wants to leave it to the cat sitter.)
Substantive fairness of a decision
E.g. if you have 2 kids, traditional idea is to divide estate equally. Say a client wants to give $1 to one and $1M to the other. Can she explain why?
Yes (e.g. “Joe hasn’t called or visited in 20 years while Frank takes care of me every day”), probably okay
If she can’t explain why, that’s a red flag.
Consistency with long term values of your client
Ted Nugent wants to leave money to the NRA = consistent
Ted Nugent comes in and says he wants to leave money to PETA = reason for concern
Diagnostician = Talk to a mental health professional (easier to do this with a long term client than a new client, but still difficult either way)
MI PR Rules: If you suspect a problem with diminished capacity, you should get a professional second opinion. Good idea in theory, difficult in practice.
Confidentiality requires you to get your client’s consent to talk to a third party.
Wrongly suspecting incapacity can lead to getting fired at best, or at worst, your client losing most of her civil rights to an unnecessary guardianship or conservatorship.
Failure to detect incapacity can result in you assisting your client in making bad decisions when you’re supposed to be taking care of her.
Testamentary capacity: the ability to recall nature and extent of property; understand the disposition you want to make; presume capacity to write a will
Trust capacity: contractual capacity; sufficient to reasonably understand the consequences of actions; MI moving from trust capacity to all testamentary capacity
If you suspect your client is making her choice based on incapacity…
Try to dissuade your client from the bad choice. (“I don’t think this is a good idea because A, B, and C.”)
If you go over the “tipping point” where you really feel your client is at risk, then you get help for your client, even if it’s from an anonymous phone call (APS, safe family members)
If you really think that things are not okay but you don’t feel comfortable putting client into the system, you can always withdraw.
Affirmative duty if you suspect diminished capacity?
No affirmative duty in MI or Model Rules (“You may do this”)
In some jurisdictions, there is an affirmative duty. (“You must do this.”)
Not a capacity issue but be aware: there are still many elderly women who have no idea how much money they have because their husband has always handled the money. This pattern will most decrease due to the changing demographic (far more women in the workforce), but it’s still a large issue today.
If have a guardian appointed, then have 3rd person in on all the meetings and confidentiality compromised; if guardian is a family member, you may not necessarily want them in on the meetings
WHO IS THE CLIENT?
Frequent scenario
Elderly client comes in with his/her adult child, who does most of the talking.
Elderly couple, both people claim that they want “exactly the same thing.”
Parent/Child issues
Possible that the child really does have parent’s best interests in mind, but it’s also possible that child is trying to exploit the parent or pressuring parent to make certain decisions.
Important to speak to the client alone if possible and make sure that everyone knows who you’re representing: the parent or the child.
Spousal issues
Regarding wills, both spouses assume that the other will carry out their wishes after death, but that’s not always the case, and as an attorney, you have to be prepared for as many contingencies/changes in circumstance as possible.
One spouse becomes incapacitated before the other so that now they both have drastically different financial needs (e.g. one needs to qualify for Medicaid, but you don’t want to have to impoverish the healthy spouse to do it.) Most lawyers will do what’s best for the family as opposed to H vs W, but there is a potential conflict of interest.
Takeaway: Although many lawyers are able to serve as an attorney to both spouses, it is critical to interview each spouse separately individually.
You can jointly represent multiple clients as long as you have all three elements:
Informed consent
Confirmed in writing
You believe that you can represent each party fully
Risks of multiple representation
Conflicts of interest may arise later
Limit to attorney-client privilege. The more people in the room, the less confidentiality.
Risk that a particular individual will be compromised.
It’s okay for a third party to pay your client’s legal fees, as long as
Your client’s gives informed consent in writing for the arrangement
You CANNOT allow the arrangement to impinge on the attorney-client relationship (“I’m paying the bill, so you need to tell me what’s in my dad’s will.” Not okay.)
MAKING YOUR PRACTICE ACCESSIBLE/USER FRIENDLY FOR SENIOR CITIZENS
Shorter meetings (Several short meetings are better than one long one)
Saves client’s energy and attention span
No difference in cost
Have meetings in the morning (Sun-downing is an issue)
Prepare documents in a larger font
Reduce ambient noise: the more surrounding noise that you have, the harder it is for a hearing aid user to hear you
Reduce background glare. Close the blinds, get rid of screen savers
Face your clients during the meeting. This is a good idea even if your client isn’t elderly. Also, people who are hard of hearing often lip read without realizing it.
Slow down your speech patterns.
Ask open-ended questions and avoid “yes/no” questions
Forces interaction
Helps you judge capacity more than asking “yes/no” questions
Make it easy to get to the office.
It should be ADA compliant—elevators, parking, ramps, well lit halls, easy directions.
Halls/rooms large enough for clients to maneuver wheelchairs, crutches, walkers.
Waiting room should have chairs with arms b/c older people often need them to stand up.
No loose carpet or uneven floor surfaces.
Prepare documents ahead of time as much as possible and give them to your client before your meeting.
You get behind very quickly in law
If you don’t prepare ahead of time, you’re not giving your client time to process info
Provide checklists to your clients.
NAELA = association of elder law attorneys
Information booklets
If you need them to provide information, give them the worksheets ahead of time and explain WHY you need to know all of this information (which is frequently very private)
Consider appointments at a client’s house. This is very useful for clients who are mentally competent but physically infirm.
Train your support staff to deal with elderly clients.
No whispering
NO IMPATIENCE
Easy access to water fountains. Many older people take a great deal of medication frequently during the day; it’s good to make them comfortable by providing water.
RETIREMENT, HEALTH, AND WELFARE BENEFITS
Sources of retirement money and healthcare (The “three legged stool”)
Individual (Private Savings)
Employer retirement plans
Government
In practice, the three legged stool doesn’t always work so well
Americans aren’t good at saving
Employment benefits are getting lower
Social Security benefits are going down as well, and Medicaid rules are always changing.
EMPLOYMENT BASED BENEFITS
ERISA (Employee Retirement Income Security Act of 1974) regulates retirement benefits (Note: Use ERISA cites on the final)
ERISA 100: Pension plan = any plan, fund, or program established or maintained by an employer that (i) provides retirement income to employees, or (ii) results in a deferral of income by employees for periods extending to the termination of covered employment or beyond…
ERISA 101a: Employers shall provide participants or beneficiaries with a Summary Plan Description (SPD)
ERISA 102: A SPD must contain certain information (companies involved, what the benefits are, requirements for receiving them)
ERISA 502(c): Penalties for administrators who refuse to provide SPDs upon request
$100/day for administrators who fail to provide
$1000/day for failure to file an annual report
“I’m thinking about Retiring.” What do you need to know?
SPD
Get it from client if possible, but most people don’t have this readily available.
Ask administrator for it. If she refuses, toss out ERISA 101a with 502c for good measure.
Warning: client may not be entitled to an SPD if she wasn’t a regular full time employee or she never vested benefits (e.g. jobs that don’t give you benefits until you’ve worked there for a year).
What is she eligible for?
When is she eligible to retire?
What’s the latest that she can wait?
What are her distribution options? All of them.
How much are June’s benefits?
Employment based retirement benefits = only those bennies that are extended for a person or through a person after termination of active employment. Three kinds of benefits
Pension benefits
Health insurance (Meaning medical, dental, vision, and sometimes prescription drugs)
Occasionally, there will be some limited amount of retiree life insurance. Very few employers provide this.
Note: THERE IS NO LEGAL REQUIREMENT THAT ANY EMPLOYER PROVIDE ANY KIND OF RETIREMENT BENEFIT
53% of the work force, in 2004, was not participating in ANY form of employment based retirement benefits.
Very few low income workers (below 25K) participate in a retirement program, compared to workers who make $60K or more.
Employer Benefit Takeaways
Employee Benefits, retirement or otherwise, are a GIFT. Most people have no concept in the value of these benefits. But it’s critical.
Your first questions should be about benefits and retiree benefits. Also be aware that it may not be there when you quit, but at least you start with them. If you start without them, you will NOT get them later.
Once you’re actually employed, make sure that you have a summary plan description, and know where it is. Without it, it’s hard to figure out what you’re entitled to.
If your employer doesn’t give you one of these, ERISA is a big stick to threaten them with. You can use it to get more than just the SPD, ERISA can be used to view documents. You can request the underlying plan document if an SPD is not descriptive enough (Usually they are, but you never know).
Employers are notoriously bad at losing documents. If you make the request and the employer is stonewalling, it’s likely that they either didn’t write the SPD or they wrote it a long time ago and lost it. (not necessarily fraud). Don’t jump to filing suit the minute that 30 days pass, but don’t stop making phone calls and writing letters either.
BE AWARE THAT THE EMPLOYEE IS SOMETIMES NOT ELIGIBLE FOR THE SPD
EMPLOYEE BENEFITS
Pension Plans Under ERISA:
Pension plan definition = Payment upon the termination upon employment or deferred until after
Laymen definition = plan that pays you a certain amount per month for the rest of your life once you retire.
Different types of pension plans
Defined Benefit plan (Not seen much anymore)
A defined benefit plan promises the participant a specific monthly benefit at retirement and may state this as an exact dollar amount. Monthly benefits could also be calculated through a formula that considers a participants salary and service. A participant is generally not required to make contributions in a private sector fund but most public sector funds require employee contributions. Unlike defined contribution plans, the participant is not required to make investment decisions. A defined benefit plan is sometimes referred to as a fully funded pension plan (in other words, the employee doesn’t have to add any of his own salary to the retirement investment or
= You don’t have to do (a) if you typically employ fewer than 20 employees
§ 1162. Continuation coverage
(1) = COBRA coverage has to be identical to what you had as an employee
(2) = How long COBRA coverage has to last
Default = 18 months after qualifying event
36 months if
Your employment was reduced instead of terminated (e.g. employer cut your hours or you went from full time to part time)
Company went bankrupt
Employee died and you’re his/her spouse or dependent child
If you qualify for Medicare (e.g., turn 65) before the first 18 months elapsed, you get another 36 months from the Medicare qualifying date.
Other points of interest
Ends if you don’t make your premiums on time
Maximum premium = What your employer paid + 2% for admin costs
No insurability requirement
§ 1133. Claims procedure. = All benefit plans must
Notify the beneficiary when his claim is denied, and tell him why.
Give the beneficiary time and opportunity to appeal the decision.
29 C.F.R. § 2560.503-1. Essentially, the rule says that employee benefits plans must
Explain the process for making a claim and provide an appeals process if the claim is denied
Not have any provisions or processes that make it “unduly” difficult for employees to file claims
Don’t preclude the beneficiary from being represented by a lawyer acting on his behalf for a claim or appeal
Contain safeguards
Comply with the LMRA
Not charge the beneficiary for appealing
Notify beneficiary re: processes, denied claims, appeals process, etc…
Act in a timely manner
HYPOTHETICALS
Hypo: June is 62, under a retiree health plan, and very ill. Her doctor recommends an experimental procedure. June knows that insurance companies don’t like to cover experimental plans. What do you advise her?
Look at the plan document. You can call the benefit company, but frequently, the person answering the phone says X when the documentation says Y. Look for exclusions.
How much does the procedure cost? Does it exceed the lifetime cap and/or annual cap?
What is the claims procedure? How do you ask the plan to pay for this?
Typically, doctors submit claims for patients until there’s a problem.
We have a chance of a problem here, so we need to know what the claims procedure is, because if they turn down your client, you want to hold them to every step of the procedure
Claims procedures include
Appeals procedures
Very specific timelines
Different rules for urgent claims and “normal” claims
For June’s case, you need to know exactly
What kind of claim June has
What the deadlines are for this claim
When do you have to make the claim
When does the company have to get back to you
Whether this plan is covered by ERISA
If the plan says no, you can file an appeal.
Plans have different levels of appeals
You need to know how many times you can appeal
You have a better chance of winning with the employer than with the plan
What if June just wants to sue? “I know they’re going to turn me down, and I don’t want to waste time. I just want to sue.” Under ERISA, you can’t just jump straight to the lawsuit. You have to exhaust all appeals before you sue, no matter how many levels there are. BUT…if the company fails to follow its own procedures, you CAN sue.
Hypo: June is retired, healthy, 58 years old, and she has retirement health benefits, but she’s worried about her employer ending her benefits in the future.
Default: She’s right to be worried. Employers can terminate retiree benefits at any time.
Rare exceptions: June had a private or union contract that included retiree benefits for life in its provisions. A lawsuit might prove useful here.
GOVERNMENT BASED BENEFITS
Social Security Overview
Social Security was designed as a safety net, not a comprehensive support system. However
For 2/3 of the elderly, SSR provides the majority of their income.
For 22% of the elderly, SSR is their only source of income.
Umbrella
SSI
Later, Medicare and Medicaid
Social Security was intended to be self sufficient: Intended to be self financing through payroll taxes. Theory: SSA doesn’t need other money. All of its money will come in through payroll taxes (FICA taxes)
Two problems with the theory (Why Social Security is in danger. Tensions between generations)
When SSA was developed, population was on the increase (including the Baby Boom Generation), so it was reasonable to think that there would be enough people to support the system. However, the baby boom generation stopped. Now we have fewer people putting money in, but more people taking money out.
No one wants to increase taxes.
FICA = 6.2%
Employer also pays 6.2%
This 6.2% number has been stable (read: stagnant) since the 90s. The economy hasn’t been quite as consistent over the past 20 years.
