Practical Ethics in Elder Law (HYPOTHETICAL #4)

CHILDREN WANT CONTROL

Dave: Client met with me years ago and did an estate plan. Now the client's children come to me, representing that client is becoming frail and needs to enter a nursing home. They say they want to take over the management of client's legal and financial affairs in order to preserve assets, provide for their parents’ care, and save on nursing home costs. What can/should I do?


Paul: Always meet with the client-parent. Make sure to meet with parent alone without the children present. The rule forbidding representing new clients when, in doing so, you take a position adverse to a current client may forbid you from doing so without first getting informed consent, confirmed in writing.

Perhaps the estate plan was constructed some years ago and you have not had any contact with the parent in some number of years. You may take the position that the parent was a “former” client and not a current client. Even, in that case, informed consent, in writing, is necessary.

Another element comes into play when being paid by the children for their parent’s “plan”. At the very least, you’ll need informed consent. It is likely, that you’ll need informed consent in writing from both the parent and the child.

What if we take the position that the parent has “diminished capacity”? If the lawyer reasonably believes the client has diminished capacity, it seems the lawyer can work with the children to take protective action. While I believe it to be inappropriate in many cases to counsel a child in seeking guardianship of your client (their parent), that may be the action necessary to protect your client. This obviously requires a lot on the part of the attorney who must: (1) determine whether the plan sought by children is in the best interest of their parent; (2) obtain both parent and child’s consent in writing to move forward with the plan; (3) determine whether the parent has the ability to consent (or diminished capacity); and if the parent’s capacity is diminished, (4) determine what are appropriate protective actions for the lawyer to take at this time?

Dave: Have you considered that the adult children may have a durable power for the parent that on its face authorizes the change? Or that all the children/ beneficiaries seem to be in accord about the need for the change? Or that the client is apparently unable to come to your office for the interview or otherwise unable to participate?

Paul: I think we must take the position that the children are now our client. Anytime an attorney represents a client who is a fiduciary, the attorney must make clear that the client understands that the duties of both the fiduciary and the attorney are ultimately governed by the known wishes and best interest of the principal.

Remember, in this fact pattern, the parent is our only client when the children come to our office. Our first duty of loyalty, power of attorney or not, is to our current client, the parent. Note, however, even if the principal is not a client, in some situations the attorney owes a duty of loyalty to the principal.

It may happen on occasion that the attorney will follow instructions of the fiduciary without consulting the principal, especially when the principal is a non-client. In either case, the attorney needs to make a determination as to whether the fiduciary is acting in the principal’s best interest or not. I would pay particular attention to any transactions that would appear to benefit the fiduciary to the detriment of the principal.

If the fiduciary client is acting to the detriment of the principal, the attorney should counsel the fiduciary to rectify that conduct. If the fiduciary refuses, the attorney should take necessary actions to protect the principal even if it includes disobeying the adult children.

I would always make every effort possible to meet directly with the parent in this case. The attorney needs to make some determination as to the capacity of the parent and the parent’s status as our client, to determine whether attorney can continue the course of action with the children without informed consent. Then, if the parent is unable to give informed consent, I would use all information known to me to determine the known wishes and best interests of the parent and counsel the children to act accordingly.