Elder Issues in Dissolution
Robert B. Fleming
Fleming & Curti, PLC
www.elder-law.com
Elder Issues in Dissolution
Robert B. Fleming
Fleming & Curti, PLC
www.elder-law.com
Capacity, Guardianship and
Guardians ad litem
• Incapacity, incompetence, vulnerability
• Guardianship, conservatorship, guardians
ad litem
• Process, costs and time
• ―Best interests‖ and ―substituted judgment‖
3
Ethical Considerations
• ER 1.14 Client with diminished capacity
(a) When a client's capacity to make
adequately considered decisions in
connection with the representation is
diminished, whether because of minority,
mental impairment or for some other
reason, the lawyer shall, as far as
reasonably possible, maintain a normal
client-lawyer relationship with the client.
4
ER 1.14(b)
When the lawyer reasonably believes that the
client has diminished capacity, is at risk of
substantial physical, financial or other harm
unless action is taken and cannot adequately act
in the client's own interest, the lawyer may take
reasonably necessary protective action,
including consulting with individuals or entities
that have the ability to take action to protect the
client and, in appropriate cases, seeking the
appointment of a guardian ad litem, conservator
or guardian.
5
ER 1.14(c)
Information relating to the representation
of a client with diminished capacity is
protected by ER 1.6. When taking
protective action pursuant to paragraph
(b), the lawyer is impliedly authorized
under ER 1.6(a) to reveal information
about the client, but only to the extent
reasonably necessary to protect the
client's interests.
6
ER 1.14 (comment 5)
If a lawyer reasonably believes that a client is at risk of
substantial physical, financial or other harm unless action is
taken, and that a normal client-lawyer relationship cannot be
maintained as provided in paragraph (a) because the client
lacks sufficient capacity to communicate or to make adequately
considered decisions in connection with the representation,
then paragraph (b) permits the lawyer to take protective
measures deemed necessary. Such measures could include:
consulting with family members, using a reconsideration period
to permit clarification or improvement of circumstances, using
voluntary surrogate decisionmaking tools such as durable
powers of attorney or consulting with support groups,
professional services, adult-protective agencies or other
individuals or entities that have the ability to protect the
client. In taking any protective action, the lawyer should be
guided by such factors as the wishes and values of the client to
the extent known, the client's best interests and the goals of
intruding into the client's decisionmaking autonomy to the least
extent feasible, maximizing client capacities and respecting 7 the
client's family and social connections.
A.R.S. §46-454(B)
An attorney, accountant, trustee, guardian, conservator
or other person who has responsibility for preparing the
tax records of an incapacitated or vulnerable adult or a
person who has responsibility for any other action
concerning the use or preservation of the incapacitated
or vulnerable adult's property and who, in the course of
fulfilling that responsibility, discovers a reasonable basis
to believe that exploitation of the adult's property has
occurred or that abuse or neglect of the adult has
occurred shall immediately report or cause reports to be
made of such reasonable basis to a peace officer, to a
protective services worker or to the public fiduciary of the
county in which the incapacitated or vulnerable adult
resides.
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Guardianship and Conservatorship
• Guardianship ―of the person‖ —
Conservatorship ―of the estate‖
• Ruvalcaba by Stubblefield v. Ruvalcaba
• ―Best interests‖ vs. ―substituted judgment‖
• Guardians ad litem
• Practical considerations:
– Will it help?
– What will it cost?
– How long will it take? 9
What to look for
• Diagnosis — ―mentally ill‖ does not equate
to ―incapacitated‖
• Requirements: mental condition, effect on
ability, need for appointment
• Caveat: guardianship/conservatorship will
not produce services, improve mental
health or functioning, or give the guardian
or conservator unlimited powers
10
Gov‘t. Benefits and Dissolution
• Social Security retirement benefits
• Social Security dependents‘ and survivors‘
benefits
• Social Security Disability Insurance (SSDI)
• Supplemental Security Income (SSI)
• Medicare
• Medicaid / AHCCCS / ALTCS
11
Social Security
• Dependents (50%) and survivors (75%)
• Divorced spouses (dependents and
survivors) and the maximum family benefit
• Remarriage by divorced spouse
– Before age 60
– After age 60
• Effect of divorce, annulment or death of
new spouse
• Marriage by adult disabled dependent
child 12
Supplemental Security Income
• Marriage of SSI recipient
• Divorce and SSI
• Transfer of assets penalties
• Special case: effect of divorce by parents
on disabled child‘s SSI benefits
13
Medicaid (AHCCCS)
• NB: AHCCCS eligibility usually considers
earned income only, not assets
• No transfer penalty
14
Arizona Long Term Care System
• Availability of marital assets (―deeming‖)
• Community Spouse Resource Deduction
• Pre- and post-nuptial agreements
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Intermission
16
Holdovers from yesterday
• ALTCS (long-term care Medicaid) eligibility
issue: home is exempt resource, but what
about lien? What can community spouse
do to protect the home?
• Guardianship/conservatorship issue:
doesn‘t spouse have priority for
appointment as guardian and/or
conservator? What if he/she is the
problem?
17
WT v. Division of Medical Assistance
and Health Services, 916 A.2d 1066
(NJ Super. Ct. 2007)
• Institutionalized husband and community wife
divorced (―from bed and board‖). Marital assets
of $686,000 were divided $250,000 to husband,
balance to wife. Sixteen months later husband
applied for Medicaid.
• Medicaid agency treated unequal property
division as uncompensated transfer.
• Intermediate appellate court reverses. New
Jersey does not require ―equal‖ division of
property on divorce, but rather ―equitable‖
division.
18
Statutory disinheritance
A.R.S. §14-2804: ―…the divorce or
annulment of a marriage … [r]evokes any
revocable (a) Disposition or appointment
of property… (b) Provision in a governing
instrument… (c) Nomination in a
governing instrument…‖ (see Appendix B)
19
Problems with disinheritance
• How does a divorced spouse manage to
leave property to his/her former spouse if
he/she wants that result?
• What about ERISA plans?
• What about pending divorce proceedings?
• What about separation?
20
Can you disinherit a spouse?
• Elective share statutes (―electing against the
will‖)
• Arizona‘s approach: statutory allowances
– §14-2402 homestead allowance—$18,000
– §14-2403 exempt property—$7,500
– §14-2404 family allowance—?, but $12,000
presumptively OK
– Total: $37,500
• NB: Failure to claim statutory allowances is a
―transfer‖ for ALTCS purposes
21
What about the preliminary
injunction?
―Neither party shall transfer, encumber, use
as collateral on a loan, conceal, sell, or
otherwise dispose of any of the parties‗
joint, common, or community property,
unless related to the usual course of
business, the necessities of life, or court
fees and reasonable attorney fees
associated with an action filed under this
article, without the parties' written consent
or the court's permission.‖
22
Divorce, probate style
• Collecting spousal maintenance (requires
explicit language in the agreement or decree)
• Property division (contract claim surviving death
of decedent)
• Child support:
– Presumably survives death of parent
– ARS §25-327(C) permits support to be ―modified,
revoked or commuted to a lump sum payment to the
extent just and appropriate…‖
23
Trusts and dissolution
• Effect of dissolution on joint revocable
trusts
• Prenuptial agreements and trusts
• ―Special needs‖ trusts
24
Special needs trusts
• Purpose of special needs trust: to permit
beneficiary to remain eligible for public
benefits
• Self-settled special needs trusts, support
obligations and asset protection
– Ohio (Myers v. DeVore) and Pennsylvania
(Mencer v. Ruch) cases on calculating child
support
– Collecting support award
25
Directing child support payment to
SNT
• Spousal maintenance and property
division
• Child support ―permanently and
irrevocably‖ assigned to SNT
• Residual beneficiaries?
• In-kind Support and Maintenance (ISM)
26
More resources
• www.ssa.gov
• www.elder-law.com
• www.specialneedsalliance.com
• Fleming & Davis, The Elder Law Answer
Book, Panel Publishers
• Hegland & Fleming, Alive and Kicking:
Legal Advice for Boomers, Carolina
Academic Press
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