When do I acquire that seasoned perspective, that sense of proportion, that quiet composure that will keep me from going berserk when I misplace my keys? —Judith Viorst in I’m Too Young to Be Seventy andOther Delusions.
Maybe, despite all the reminders Senior Moments has given for years, you still think that advance life planning legal documents are not really that important. Perhaps you think its okay not to have, for instance, powers of attorney. Maybe you still think that, if you needed one, you could just download it free of charge from the Internet (you could) or buy one off the shelf for a low fee at an office supplies discounter (you could) and it will work fine. Don’t be so sure. Let me tell you a story.
Once upon a time, around these parts, there lived a young man, who was an only child. By his own admission, he may have been a little immature and irresponsible, perhaps spoiled in an “entitled” sort of way.
Sadly, only a few months after the death of his father, his mother was diagnosed with Alzheimer’s disease. Having some understanding of the future, the mother signed a power of attorney designating her only child to act as her agent when she became unable to act. Signing a power of attorney was a wise and good decision. Unfortunately, this particular power of attorney was poorly drafted and had a fatal flaw—one that probably no one noticed at the time of its execution.
Later, the mother (whose last lucid thoughts may have included some satisfaction that everything was in order) was admitted to a local nursing facility, and her son began paying the facility using his mother’s funds. Our hero had to face the fact that his mother’s well-being and his own future were in his own hands.
Largely because of the work I do, I know that the particular nursing facility caring for the young man’s mother is excellent, and among the least expensive in our area. Even so, long-term custodial care is not inexpensive. The mother’s money funded care in the neighborhood of $42,000 annually in the beginning. (Much of this story took place in the 1990s) Six more years resulted in payments exceeding a quarter of a million dollars to the facility, which the young man says was taking wonderful care of his mom.
As the years passed, when mom’s money was getting low, he took out a loan. He continued to pay for her care and to pay off the loan. Then he took out another loan. He paid it back. Then, with interest rates very low, he said to himself: “Mom and I own this house jointly. I will refinance the house to get a lower interest rate, I will use that money to buy out mom’s share of the house, and then she will have money to continue paying for her care.”
Enter the poorly drafted power of attorney. After half a dozen tries, the young man had to face the fact that the power of attorney, drafted when his mom was legally competent, was not sufficient the way it was written to allow him to refinance the house he owned with his mother. Had the power of attorney been drafted, correctly and completely, and had it included a legal description of the subject property, I probably would not have a story to tell here.
Unfortunately, the young man could not sell or refinance the house, using the document his mother signed when she had legal capacity. Enter the court. The court must be asked whether the young man could assume guardianship over his mom for the purpose of refinancing the house.
Senior Moments has previously explained that the courts, rightly so, do not look lightly upon a request to assume guardianship over another person. They appoint an attorney to represent the allegedly disabled person (called allegedly disabled because any disability has not yet been proven to the court). The court-appointed attorney, doing the due diligence required of him, presented discovery requests including interrogatories and requests to submit certain documents. There was a hearing at which time the attorney representing the young man had to prove, to the court’s satisfaction, that he had not wasted his mother’s assets.
That could be done – proving that he handled his mom’s money wisely, I mean. Bank records from years ago were requested and paid for. Both attorneys accrued fees for preparing for court and going there to present their case. He did win the guardianship case, and was able to pay the nursing home, plus all legal and court costs.
Ironically, as the law stands right now, the young man could have gifted everything his mother owned, including the house, to himself five years or more before the issue arose, and she would have been eligible for Medicaid despite the gift. . However, he did not consult an attorney in order to understand the options legally available to him.
Moral: Doing the “right” things may not result in the “right” outcome, if your estate planning documents are poorly drafted. Check and double check.
Thank you for reading. Stay well. See you next week.