At some point in your practice you may be confronted by the diminished capacity of a client. With the American population aging, the number of individuals with diminished capacity is increasing. An attorney may be faced with a client in crisis because of diminished capacity and possibly challenged by one of the following scenarios:
You have done the estate planning of a couple a few years ago, and then the wife comes to see you. She is concerned because her husband, who is suffering from dementia, has a new behavior of uncontrollable spending. The husband is continuously giving money or writing checks to whoever comes to their front door. The couple had executed a standard estate plan including last wills and testaments, healthcare powers of attorney, durable financial powers of attorney and revocable trusts. Now these documents may not be sufficient enough to protect the couple. In addition, you are faced with a conflict of interest since only the wife is coming to see you while you began the relationship as joint representation.
The children of your client come to see you for a consultation, because they are concerned that their mom is being financially exploited by her housekeeper. Mom recently revoked the power of attorney designating the children as agents, and has signed a new power of attorney designating the housekeeper. What shall you do?
In both scenarios we are faced with a potential conflict of interest. In both, however, we can see the need to protect the client.
One possible solution in scenario 1 would be to have a meeting with both the wife and the husband to address the issues. This will give you an opportunity to assess whether the husband is capable of and willing to cooperate in taking steps to protect the couples’ assets. If all of the assets were titled in the revocable trust you will be able to recommend that the husband resign as trustee. In addition, you may wish to confirm there are no other assets outside of the trust that could fall under the control of a new agent, should the husband revoke the current power of attorney and create a new one. If these measures are not sufficient, the wife could petition for guardianship and conservatorship of her husband. However, since you also have a client-attorney relationship with the husband, you cannot represent the wife in this matter. This petition will require a doctor’s evaluation and opinion that the husband is not capable of making decisions about his personal and financial affairs. It will certainly be easy for the wife to contact the doctor because the husband should have signed a HIPAA release on her behalf.
For the second scenario (action of the children), it may be necessary to pursue a petition for guardianship and conservatorship of the mother, with an express provision to revoke the existing power of attorney. Again, you have an existing attorney-client relationship with the mother, and representing the children would conflict with that relationship. However, if you determine that the circumstances meet the requirements of Rule 1.14 of the Rules of Professional Responsibility, you can be the petitioner in seeking the appointment of a guardian and conservator to protect your client. Unless the children have a release from mom, collecting a doctor’s evaluation report will be more difficult in this case. It is not certain that the mom has executed a HIPAA release and/or the children may not have access to their mother’s doctor. The best solution would be for the children to become more involved in their mother’s healthcare. They will need to accompany their mother to her doctor’s appointment and to try to have her execute a HIPAA release. The children will have to outline their concerns with their mother’s doctor and ask that the doctor conduct an evaluation. If this is not possible, a petition for guardianship can be filed together with a motion for the court to order a doctor’s evaluation. In addition, the court-appointed guardian ad litem has the authority to require an evaluation as part of the investigation of the allegations of the petitioner’s complaint.
Another option in both scenarios is to contact Adult Protective Services, and present the concerns about safety and financial exploitation. Adult Protective Services will do an inquiry provided that they are permitted in the home when they knock at the front door. Their investigation may take time and you may want immediate action.
As the attorney of a client with diminished capacity you also have a special duty to protect your client. Rule 1.14 (b) provides that an attorney should “take reasonably necessary protective action” when a client “is at risk of substantial physical, financial or other harm.” The American Bar Association suggests that the attorney may take action on behalf of a client under the following circumstances:
•?It is an emergency situation that threats the health, safety or financial interest of the person under disability;
•?Action is required only to the extent necessary to maintain the statusquo or otherwise avoid immediate or irreparable harm; and
•?Only confidential information necessary to achieve the intended action shall be disclosed by the attorney.
Although it seems that the attorney can make decisions in a proceeding on behalf of an impaired client, under no circumstance can an attorney perform any act, or make any decision, which the law requires the client to perform or make, if the client is legally incompetent.
From a legal stand point, incapacity is officially determined by the court. Otherwise there is a presumption of capacity. However, the practitioner will always have to assess whether the client has the capacity to enter into a contract of representation, and whether the client has the capacity to execute a legal document.
Even if the capacity is presumed, the practitioner must determine whether or not a prospective client has sufficient legal capacity to enter into a contract for the lawyer’s services. Then, the lawyer will have to evaluate the client’s legal capacity to carry out the specific legal transactions desired as part of the representation.
The failure to assess a client’s capacity has been asserted as grounds for legal malpractice by would-be beneficiaries of a client. The standards of practice continue to evolve as the prevalence of incapacity rises and as a greater awareness of the need to address capacity issues has emerged. Legal malpractice for failure to address capacity questions in cases is no longer a remote possibility, and with Rule 1.14 (b) attorneys are also required to take steps to protect their clients.
– By Yahne Piorini, who practices elder law with Miorini Law PLLC in McLean.