Here’s a different presentation approach – please do pass it along to your contacts and people who would be interested. This is an important topic that needs more discussion. Thank you. Dave Tate, Esq. (San Francisco and California)
Surprisingly, there is very little statutory or case law discussing:
-Attorney in fact decision making under a power of attorney document;
-When the power of attorney becomes effective;
-If the principal is making the decisions;
-When is the named attorney in fact actually acting as an attorney in fact under the power of attorney;
-Is the attorney in fact a fiduciary, and if he or she is actually acting as a fiduciary, for what is he or she a fiduciary;
-Can someone be acting as a fiduciary in some situations or with respect to some issues and decisions, but at the same time not for other situations, issues and decisions (and related, the principal doesn’t necessarily lose decision making over all situations, issues and decisions, right?); and
-The specifics of whether acting as a fiduciary in a particular situation does or does not switch the burden of proof, and if it does, in what manner, to what extent, and for what events or actions is the burden of proof switched?
These are all important issues, and they are becoming more important. Cases that deal with powers of attorney or even these issues usually don’t go into detail, but many times simply find in a conclusory fashion that someone was a fiduciary so for all purposes and for all events or actions the burden of proof is shifted, and all depending on the judgment of the trier of fact which is often a single judge. I submit that this approach is way to simplistic, conclusory and lacking in critical legal analysis.
The California Probate Code provides that agency law applies to power of attorney, attorney in fact, and principal issues, unless the Probate Code contains a provision that states otherwise or that directly addresses the issue at hand. I very seldom hear discussions in court about statutes that address powers of attorney, or actions and responsibilities and decision making thereunder. The following are a couple of those statutes.
California Probate Code Section 4234 – (a) To the extent reasonably practicable under the circumstances, an attorney-in-fact has a duty to keep in regular contact with the principal, to communicate with the principal, and to follow the instructions of the principal.
California Probate Code Section 4657 – A patient is presumed to have the capacity to make a health care decision, to give or revoke an advance health care directive, and to designate or disqualify a surrogate. This presumption is a presumption affecting the burden of proof.
California Probate Code Section 4684 – An agent shall make a health care decision in accordance with the principal’s individual health care instructions, if any, and other wishes to the extent known to the agent. Otherwise, the agent shall make the decision in accordance with the agent’s determination of the principal’s best interest. In determining the principal’s best interest, the agent shall consider the principal’s personal values to the extent known to the agent.
As you can see, the attorney in fact, assuming that he or she is in fact acting under the power of attorney and as an attorney in fact for the specific situation, issue or action at hand, should be communicating with the principal about important issues and the principal’s wishes and decisions with respect to those issues. And there is or might be an actual or implied presumption that the principal has decision making capacity and is making the decision in that circumstance.
Dave Tate, Esq., San Francisco and throughout California, http://californiaestatetrust.com
I was reading an article recently. It in part described a situation where one of Dad’s adult children said that Dad could not see his granddaughter anymore because the son was upset with Dad’s estate plan, but that Dad could see his granddaughter if he made some changes to the plan.
Undue influence is described in several different ways, including by statute and by case law. When are statements or discussions merely opinions, or influence, or persuasion, or even argument or disagreement, but not “undue” influence in nature? It’s not always easy to tell; but on other occasions it is obvious. You judge the above scenario using the below definition of undue influence. It sounds like undue influence, and quite possibly also elder abuse, if it meets the below criteria.
The following information is copied from my elder abuse presentation slides.
California Welfare & Institutions Code §15610.70 provides the following statutory definition of undue influence:
(a) “Undue influence” means excessive persuasion that causes another person to act or refrain from acting by overcoming that person’s free will and results in inequity. In determining whether a result was produced by undue influence, all of the following shall be considered:
(1) The vulnerability of the victim. Evidence of vulnerability may include, but is not limited to, incapacity, illness, disability, injury, age, education, impaired cognitive function, emotional distress, isolation, or dependency, and whether the influencer knew or should have known of the alleged victim’s vulnerability.
(2) The influencer’s apparent authority. Evidence of apparent authority may include, but is not limited to, status as a fiduciary, family member, care provider, health care professional, legal professional, spiritual adviser, expert, or other qualification.
(3) The actions or tactics used by the influencer. Evidence of actions or tactics used may include, but is not limited to, all of the following: (A) Controlling necessaries of life, medication, the victim’s interactions with others, access to information, or sleep. (B) Use of affection, intimidation, or coercion. (C) Initiation of changes in personal or property rights, use of haste or secrecy in effecting those changes, effecting changes at inappropriate times and places, and claims of expertise in effecting changes.
(4) The equity of the result. Evidence of the equity of the result may include, but is not limited to, the economic consequences to the victim, any divergence from the victim’s prior intent or course of conduct or dealing, the relationship of the value conveyed to the value of any services or consideration received, or the appropriateness of the change in light of the length and nature of the relationship.
(b) Evidence of an inequitable result, without more, is not sufficient to prove undue influence.
I heard about this recently – a new situation is arising. I’m just telling you about it. The elder is living in a residential care facility for the elderly, sometimes referred to as a RCFE, or assisted living or board and care. The elder is paying with private money. The assets and money run out. The elder doesn’t have family, or the family doesn’t have money, or the family won’t pay for the elder. Medi-Cal will not pay for a RCFE. In the past, in some situations, going to a nursing home was a last resort as Medi-Cal will pay for the cost of the nursing home. In the past the referral to a nursing home might merely have needed a doctor’s signature. Increasingly, Medi-Cal or its agents or representatives are starting to evaluate whether the elder’s physical, medical or mental conditions actually qualify the elder to be in the nursing home. In other words, if it is decided that the elder’s conditions are not sufficiently bad to qualify the elder to be in the nursing home, Medi-Cal will not pay for the costs of the nursing home, and the elder either will not be allowed initially into the home, or the nursing home and Medi-Cal will want to discharge and force the elder from the nursing home. But in those situations the elder has nowhere that she or he can afford with private pay.
A new California case has held that the ability to recover 2x damages under California Probate Code section 859 does not constitute punitive damages. The case is Hill v. Superior Court (Staggers), California Court of Appeal, First Appellate District, No.A145893, decided February 18, 2016.
Without getting into a long legal discussion, why is Hill v. Superior Court (Staggers) important? Claims under California Probate Code sections 850, et seq., have become common and important. In summary, sections 850, et seq., allow certain legal claims in trust, estate (probate), conservatorship and guardian proceedings when money, personal property or real property is claimed to be due to or from an estate or trust. Sections 850, et seq., also may allow the prevailing party who wins on a claim that he or she is entitled to recover the property to recover twice the amount of the value of the property that is recovered.
In Hill v. Superior Court (Staggers) the losing party, against whom double damages were awarded, argued that double damages under Probate Code section 859 are in the nature of punitive damages, which would require the prevailing party to prove entitlement to recovery of the double damages under a higher standard (i.e., for example, by having to establish malice, oppression, fraud, etc., before being entitled to the recovery of double damages.
The Court of Appeal held that the double damages allowable under section 859 are in the nature of a penalty (upon a showing of bad faith), but are not punitive damages. The result, which is very important in these cases, is that it is easier to recover the section 859 double damages. These provisions need to be carefully considered in all Probate Code section 850, et seq., actions, including for the purpose of settlement and trial as the possibility of an award of double damages can significantly change the dynamics of a case. A claim of recovery under sections 850, et seq., might be possible in a wide variety of trust, estate (probate), conservatorship, guardianship and elder and dependent adult abuse cases.
The following is the wording of California Probate Code section 859 (which also contains a provision for the possible recovery of attorneys’ fees):
859. If a court finds that a person has in bad faith wrongfully taken, concealed, or disposed of property belonging to a conservatee, a minor, an elder, a dependent adult, a trust, or the estate of a decedent, or has taken, concealed, or disposed of the property by the use of undue influence in bad faith or through the commission of elder or dependent adult financial abuse, as defined in Section 15610.30 of the Welfare and Institutions Code, the person shall be liable for twice the value of the property recovered by an action under this part. In addition, except as otherwise required by law, including Section 15657.5 of the Welfare and Institutions Code, the person may, in the court’s discretion, be liable for reasonable attorney’s fees and costs. The remedies provided in this section shall be in addition to any other remedies available in law to a person authorized to bring an action pursuant to this part.
And the following is a snapshot of a relevant part of the opinion of the court in Hill v. Superior Court (Staggers):
Let’s talk more about elder and dependent adult abuse and protection, and why we are failing in California. Prevention and remedies are ridiculously inadequate and archaic, particularly taking into account the numbers of cases of abuse.
I first started bringing elder and dependent adult abuse cases in 1993. My cases were primarily for physical, care, mental, undue influence, duress, fraud, financial, theft, real property, trust, and will abuse. I have to say that the more that things change they also stay the same. The same types of abuse still occur, and they always will. The cases were difficult then, and they still are. These cases take time and expertise. There is often difficulty obtaining evidence. And defendants really fight these cases, always arguing that nothing wrongful occurred, that the victim rightfully knew what they were doing and of their own free will, and in physical abuse cases that the injury naturally occurred due to the victim’s naturally poor condition. In other words, everything was known and on the up-and-up. Defendants in these cases count on the prospect that you will have difficulty proving the case, and that you will go away eventually for lack of resources and time. Nothing has really changed.
We should ask, what resources are available to fight elder and dependent adult abuse? The first line of prevention and defense includes good people who are family, friends, professionals such as doctors, bankers, caregivers, accountants and financial advisors, and sometimes other third parties. Will these people recognize the possible or actual abuse, and then also take action? Do they even know what action might be possible and who to contact? If so, most likely only to a certain limited extent.
The next line of defense probably includes law enforcement, adult protective services and the district attorney. Most likely these people only get involved because someone in the first line of defense has contacted them. I have previously discussed the inadequacy of the second line of defense – they simply do not have the time and people power and resources to handle the numbers of possible or actual abuse cases, or to stick with the cases long-term. They can pick some cases to attempt to handle.
I would say that the third line of defense includes the private attorneys. There are resources in this category that are under utilized, at least in part because people in the first category don’t know who to contact, people in the second category don’t know who to contact and aren’t authorized to contact or won’t contact people in the third line of defense, and it is also true that private attorneys also have resources and abilities that are not unlimited and each case must also be evaluated.
Improvements can be made to the situations described above. In particular, problems and issues relating to people in the first category, the first line of prevention and defense, can be improved by getting the information out so that they can better spot abuse or possible abuse and take action. Problems and issues relating to people in the second category, the second line of defense, can be improved with additional funding or monetary resources, and by having people in the second line of defense refer people or cases to the private attorneys in the third category or third line of defense. And efforts can be made to further educate attorneys in the third line of defense about the procedures, causes of action, and remedies that are available to them. Similarly, additional effort needs to be made to educate the courts, judges, and other legal system professionals about types of abuse, evidence that abuse has occurred, and the procedures, causes of action and remedies available.
And let me discuss one additional program, the ombudsman program, which every county in California is supposed to have, and the members/volunteers of which go into the nursing homes (SNF) and residential care facilities (RCFE) and similar entities to check on the care provided and advocate on behalf of the residents. I’m a board member of Ombudsman Services of San Mateo County, California. This is a tremendous nonprofit organization. They do great work. Ombudsman Services organizations do vary from county to county – they are run different, they have different funding, they have different numbers of volunteers, they have different training, they have different decision-making processes, and some are county-run whereas other’s are separate nonprofit entities, etc. Here is a link to Ombudsman Services of San Mateo County, http://ossmc.org/. I ask that you also donate to them if you wish.
That’s all for now. These cases really haven’t changed for over 20 years, in my experience. You might hear a commercial about reporting elder abuse, and those commercials are important, but it is really about having numbers of boots on the ground that make a difference. If the boots and referrals aren’t there, nothing will be done or remedied, and it goes on and on.
Dave Tate, Esq., San Francisco and throughout California, http://californiaestatetrust.com
Are there disagreements and disputes in your trust, estate, power of attorney, conservatorship or care situation? That’s not unusual. In fact, based on my experience, I would have to say that it’s pretty common. But it can also be a game changer.
Generally a fiduciary such as a trustee, executor or conservator, and sometimes an attorney in fact, should always hire an attorney when challenging or difficult issues or significant assets are involved. The question is whether one of the parties who is involved in the situation has, or needs to, or may, or likely will hire an attorney with a view toward litigation? That’s a game changer when that possibility might occur or actually does.
Trust, estate, conservatorship, power of attorney, care and elder abuse situations and litigation are complicated legal practice areas that typically can involve a lot of emotional feelings and mistrust, and that require the attorney to know multiple areas of law and court procedure.
If you are a fiduciary such as a trustee, executor, conservator or attorney in fact you need to hire an attorney who can advise you properly about your responsibilities and on the administration of the trust, estate and assets, or on the care and daily living needs of the conservatee or person in need, with a view toward helping you to satisfy your responsibilities effectively and correctly, practicing prudent risk management and documentation, avoiding liability and litigation, and prevailing in court if the situation ends up in court.
If you are a beneficiary you need to hire an attorney who can steer you correctly to help you protect your rights and obtain the assets that were intended for you, and not waste your resources and the resources of the trust or of the estate, or possibly cause you to be surcharged for the attorneys’ fees of the other side, with a view toward prevailing in court if the situation ends up in court. If you are a beneficiary you also don’t want to unknowingly contest a trust or will or possibly disinherit yourself.
And if you are a trustor who is no longer trustee, or a principal under a power of attorney, or a conservatee, you need to feel and know that your physical, mental and financial needs and rights are correctly and timely cared for and protected, and you might also need to be represented by legal counsel. In fact, if the situation ends up in court, in some situations, such as in a conservatorship, you have an absolute right to be represented by an attorney, and in other situations the court should and will on its own appoint legal counsel to represent and advocate for you.
For additional information, the following is a link to my summary paper discussing trustee and beneficiary responsibilities and rights, and you can also find helpful information about other situations on other posts on this blog, CLICK HERE
Contact me if you would like to discuss your situation. You can contact me by sending me an email at email@example.com. Before we discuss your situation I will need to know the names of the people and attorneys involved to check for any possible conflicts.
Wishing you the very best,
Dave Tate, Esq., San Francisco and throughout California