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How Traditional Estate Planning Fails Seniors ©

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By Rajiv Nagaich

You may have read the headlines recently in Seattle Times discussing the plight of seniors! Here is how the headlines read:

“Seniors for Sale”

“Neglect and death, but home stays open”

“Fragile pushed out and paying the price”

“Gregoire calls for review”[1]

These are shocking headlines and almost unbelievable. The headlines were the lead to stories of old or disabled individuals and/or their family members who turned to the long term care industry because the senior had lost his/her ability to manage his/her activities of daily living without the assistance of others. Not in a very distant past in the history of our nation we had the institutions of joint family systems where such support would have been provided by family members. However, over time, particularly after the passage of the Amendment of the Social Security Act in 1965 creating Medicare and Medicaid, institutional care has become the method of choice to access care for those chronically ill and unable to fend for themselves in institutional settings, primarily because financial considerations are no longer with Medicare, Medicaid and Veterans Administration sponsored programs covering such costs. Well meaning seniors, who desire not to be a burden on their loved ones, and family members of such incapacitated loved ones, who strive to provide adequate care for their incapacitated family members while maintaining their own lives, now routinely turn to institutional care settings for assistance with the care of the incapacitated family member.

However, as the reported stories unravel, family members may be out of their element when dealing with such institutional care centers. They may not know how to pick the appropriate care setting or how to monitor their loved one’s care adequately to be able to make a difference. In the words of Elaine Matsuda “We didn’t know, and I didn’t complain early enough to save her.” Michael J. Berens, Neglect and Death, but home stays open, Seattle Times, February 1, 2010 at A1. Elaine was one of the daughters of Nadra McSherry who (Nadra McSherry) was placed by the family in an adult family home. The story reports that Elaine and her sisters visited their mother on an almost daily basis but were unable to discover bedsores about two inches in size and almost to the bone. By the time Nadra McSherry’s was taken to the hospital it was too late for her. Imagine the guilt of the family and the plight of the mother who suffered.


Michael Berens of Seattle Times researched and reported on the issue at some length. His conclusion was that the Department of Social and Health Services (DSHS) was the primary culprit. Not to be left out, Governor Gregoire promptly ordered a review of the agency after the stories ran in the newspaper. However, I do not believe that the problem is solely a DSHS problem. The root cause of the problem is lack of understanding of the issues incapacity creates and the solutions that exist to solve those problems. Make no mistake about it, there is no reason in the world why Nadra McSherry’s situation could not have been better managed and her outcome avoided. And the solution does not lie in holding DSHS responsible; rather it starts with individuals such as Nadra McSherry planning for this possibility. And estate planning practitioners could have had a significant hand in the shaping the conversation that can facilitate planning geared towards potential future incapacity issues.

Though the Seattle Times story does not make clear whether or not the subjects of the stories had engaged in any estate planning, from experience I would not be wrong in assuming that many of the individuals featured in the stories likely had some estate planning in place. At the very least, there likely existed a Will or Trust, Power of Attorney and Living Will. The tragic irony is that though such planning would have done a lot to address post death issues, and given family members the authority to act on behalf of the incapacitated individuals like Nadra McSherry, it completely failed them and their family members in dealing with the long term care issues caused by their incapacity caused primarily by dementia related issues which robbed them of their ability to manage their own activities of daily living.


Assuming Nadra McSherry engaged in any estate planning at all, it is likely that she had a Will or Trust, Power of Attorney and Living Will in place. The issue that is at the center of the story, as it is in an ever increasing number of families today, is how to deal with the incapacity issues beyond simply creating a power of attorney and calling the task accomplished, which in most instances is little more than President Bush’s famous Mission Accomplished banner – a misnomer.

Lets start with the proposition that no parent wants to be a burden on a child and no child wants to abandon a parent. This was evidenced by the children of Nadra McSherry reportedly visiting her daily in the adult family home they selected with care. The fact that the story reports that the family selected the care facility would indicate that they (the daughters) had the legal authority to act on behalf of Nadra McSherry. The fact that the daughters reportedly visited their mother on a regular basis shows that they did not just place their mother in the adult family home only to forget her there. And make no mistake about it, finding the home, making time to visit mom daily and otherwise dealing with mom’s financial and healthcare affairs was likely a significant burden that the children had to bear, no matter how much Nadra McSherry would have desired not to become a burden on her children. Accepting the realities incapacity gives rise to is difficult enough, but having to start from scratch to find solutions to address those issues in a huge task.


The headline says it all. Neglect and death, but home stays open. Nadra McSherry’s family recognized that their mother could not live alone without being putting her health in jeopardy. They turned to find a place to take their mother to and found what they thought was a good home. It turns out that the home, though shiny and clean on the surface, lacked adequate care. At one time the home had a nurse who was the wife of the owner. At some point in time the nurse separated from her husband and the home no longer had any qualified supervision to address basic medical issues such as bed sores. Nadra McSherry did get bedsores which went untreated. This despite the fact that the children visited the home almost daily. By the time the bedsores were detected they were about two inches wide and had eaten away almost to the bone. Nadra McSherry was then transferred to a nursing home where she succumbed to the infections her body was too frail to fight. With their mother gone, the children recognize that they were in over their heads and did not know how they could have prevented the outcome. And, assuming, they had a power of attorney, it did nothing to prepare them for the issues they were dealing with, though it could have. Here’s why:

ASSUMPTION MADE THAT NAMED FIDUCIARIES WOULD KNOW WHAT TO DO. Assuming that a power of attorney was in place, it would have named a child or children as the attorney in fact (agent.) If so, the agent would have the authority to act on behalf of Nadra McSherry but there would be no direction on how the agent should proceed with executing her role. The power of attorney would have assumed that the daughter named as the agent would be able to figure out the roadmap on her own. This proved not to be the case with Nadra McSherry’s family, as is the case with most families dealing with similar issues: Most named fiduciaries are simply not familiar with the medical or the long term care industry and will fail to effectively deal with issues addressed by the long term care institutions. As the stories point out, this industry is not nearly as well regulated as the acute care industry and therefore a lot of issues exist because of lack of effective oversight. In short, any assumption made by a family that the care provider can be trusted to provide the appropriate level of care without competent oversight in most cases simply is a poor assumption.

WHAT COULD HAVE BEEN DONE DIFFERENTLY? Nadra McSherry could have been educated about issues of incapacity and counseled not to assume that her chosen fiduciaries would be able to navigate the long term care maze effectively without assistance. Sure, with the benefit of 20-20 vision this proposition is quite clear. However, the estate planning practioner has always been called upon to anticipate issues his/her clients will face and appropriately educate the clients so the client can make an informed decision. In my experience, the practitioner has a bully pulpit that clients pay attention to which could be effectively used to bring about a change in the way a client approaches estate planning. This proposition starts with taking into account that in America we have the resources necessary for people to age in place at home when there is a desire on part of the incapacitated and resources are made available. That system is called hospice. If a person is diagnosed to be terminally ill our medical community will offer the terminally ill patient hospice services. What is hospice? Generally it is a concept that involves a team effort. It will usually start with a social worker who will work with the medical team to determine what services would be needed to allow the patient to age at home. Once that is determined then an effort will be made to make those services available to the patient and can include very elaborate plans including sophisticated equipment such as respirators, automatic pain medication dispensing machines, feeding tubes, hospital beds and other home medical equipment etc. Additionally, human services such as bath aids, visiting nurses, spiritual advisors etc. will also be co-opted in the plan to allow people to remain at home. But, no one seems to discuss these services if hospice is not part of the equation. Why? The only explanation I can come up with is that the assumption is made the most people would not value such services if there was no insurance or government benefit that would cover the costs. In my experience this is a false assumption and one that places the family members of individuals such as Nadra McSherry at a total disadvantage. Who we are talking about outside of the hospice context is a Geriatric Care Manager. These are usually nurses or social workers that have experience working in hospitals or nursing homes and have inside knowledge of how these institutions work. They are also able to understand and identify the services that can allow one to remain at home and if that is not a viable or acceptable solution then they can help identify and locate the least restrictive housing alternative that would be available to the patient. Once the services are identified or placement secured the Geriatric Care Manager can help monitor the care the patient is receiving. This need not happen on a daily basis and can happen on a as needed basis. Had Nadra McSherry made provisions in her power of attorney that would have required the agent to work with a qualified Geriatric Care Manager her outcome likely would have been a lot different.

From strictly a legal viewpoint one can ask whether or not an estate planning attorney should have any role in counseling a client as regards Geriatric Care Managers and the like. Where legal counsel is charged with assisting a client plan for various eventualities it is only appropriate that the estate planners understand the emerging risks and offer advice to client on how they can mitigate some of the risks. The client will be in the final position to determine whether or not such provisions are appropriate. However, an attorney can use the bully pulpit to make the client aware of such issues.

DISCUSS ROLES AND RESPONSIBILITIES AHEAD OF TIME. Next, generally making provisions in legal documents is not sufficient for the families to understand what the provisions might mean. Take the provisions for the agent to hire the services of a Geriatric Care Manager for example. When the time comes it is quite likely that the agent will read the provisions for the first time and may not know where to turn, especially if the situation is a crisis situation. Or, the agent might simply ignore the dictate deeming his/her ability to manage quite adequate. Knowing such eventualities it becomes necessary for an estate planning attorney not only to help the client execute the appropriate documents with provisions for their chosen fiduciaries to follow but then also to hold a family meeting with the client and the fiduciaries where the attorney can review the provisions with the family members so they will know instantly what to do when the time comes. In my experience, this step is often the difference in the fiduciaries actually carrying out the principal’s intent or bypassing the steps. In the case of Nadra McSherry, it would have been immensely beneficial for the family to know what to do when they needed to get involved on account of the principal’s incapacity.

EVALUATE AND PLAN FOR ASSET PRESERVATION FROM UNCOVERED MEDICAL COSTS. Not only does incapacity bring about care issues, it also implicates asset preservation, a concept estate planning attorneys are quite familiar with. That said, the aspect of asset preservation that most attorneys will offer is asset preservation from estate taxes and from probate costs. Few attorneys will offer preplanning in the area of asset preservation from uncovered long term care costs. Though outside the scope of this article, the time has come to recognize that where one out of six individuals over the age of sixty five (65) and one out of two individuals over the age of eighty five (85) will deal with incapacity related issues where they will need outside intervention for assistance with activities of daily living; and Medicare does not necessarily cover these costs, most middle size estates are vulnerable to uncovered long term care costs which could be covered by certain Veterans Administration programs and by Medicaid. Both these programs are means tested and so designing an estate plan leaving all assets to the spouse makes as much sense as it does for estates that are likely to exceed the estate tax threshold. No longer can or should an estate planning attorney ignore the possibility of uncovered long term care costs depleting the estate.


Last Will & Testament for small to mid size estates. To begin with, a proper estate plan should recognize that a primary estate planning issue to be considered is the viability and appropriateness of Medicaid benefits. Knowing that qualification for Medicaid benefits requires the applicant to have no more than a small amount of assets to his/her name, a proper estate plan should direct a married client’s suare of the community estate NOT to the surviving spouse but instead to a “Special Needs Trust,” created for the exclusive benefit of your surviving spouse. Assets that are directed to this trust will not be counted as owned by your surviving spouse and therefore will not need to be spent down to qualify for any means tested program to cover the necessary long term care services.

Powers of Attorney or Trustee Provisions. Understanding that the agent or trustees named may not necessarily have the knowledge or skills to make an informed decision about the types of services available to allow a principal to age at home, or be able to discern the least restrictive environment than the nursing home the principal can thrive in, provisions should be made in both the power of attorney and the trust to require the agent and trustee engage the services of a Geriatric Care Manager who will be able to assist the fiduciary in ascertaining the principal’s needs and how to best address those needs without resorting to drastic measures such as nursing home placement. The Geriatric Care Manager is compensated with the assets that have been protected by the Special Needs Trust and so is not a burden to the principal’s family members. The named fiduciaries reap additional benefits as they do not have to spend the extraordinary amount of time and effort that is needed to understand these issues.

In keeping with protecting a client’s estate from long term care issues, the Powers of Attorney should also prohibit agents from being able to agree to sign a voluntary arbitration agreement. These agreement are generally presented as required documents placed in front of the fiduciaries by long term care facilities when the fiduciaries are to find placement in an institutional setting for an incapacitated principal. The arbitration agreements are meant to have the resident give up his/her right to sue the institution in case of negligence on the part of the institution on account of negligence on part of the institution. Usually, it is not in the client’s best interest to enter into such agreements. In the majority of the cases it is the client’s agent who will sign the papers to admit the principal to the facility. Taking away the authority of the client’s agent to enter into such agreements makes such arbitration agreements, if signed by the named agent, null and void.


Estate planning continues to be practiced in a time honored and traditional manner often times ignoring the emerging realities that estate planning can, if the practitioner chooses for it to, address. Estate tax based estate planning has been the largest driver of clients to seek the assistance of estate planners, though the number of estates implicated in such planning has been dwindling. However, today the reality is that one out of two individuals over the age of sixty five (65) and one out of two people over the age of eight five (85) will deal with dementia related incapacities for which there will be no coverage under Medicare or other health policies[2]. Under such circumstances the more urgent asset preservation issue most clients face is asset protection from uncovered long term care costs and yet majority of practitioners do not provide planning choices to clients. More importantly, incapacity issues create stresses that sometimes prove to be fatal. These issues stem from the failure of the estate planning profession to assist the family in dealing with long term care issues with which the family might not be familiar with. Where estate planning can offer creative solutions to problems such as protecting assets for irresponsible or incompetent heirs, from potential divorces, creditors and the like, the failure of estate planning attorneys to develop reasonable solutions, such as directions for agents to have to work with qualified health care professionals to assist the principal in having better life outcomes in the face of physical or mental incapacity is quite inexplicable. The solutions generally do not have to be a significant departure from traditional estate planning solutions offered by practitioners. And though the solutions may seemingly be small steps that a practitioner can take to address the emerging issues our clients are facing on a day to day basis, these changes can lead to important and fundamental positive results in the client’s life.

No one can say that the estate planners who may have assisted Nadra McSherry were the ones who failed her, but undoubtedly they were a part of a total system that everyday fails the clients such as Nadra McSherry by limiting the issues and solutions to the traditional time honored issues of asset preservation from estate tax and probate costs and creating authority for others to act on behalf of the principal. And the fix is so simple that it is almost criminal not to have every practitioner offer it.

[1] Seattle Times, January 31, 2010; February 1, 2010; February 2, 2010 and February 3, 2010.

[2] Source: Alzheimer’s Disease Facts and Figures, 2007, Alzheimer’s Association

Copywright 2010: Law Firm of Johnson and Nagaich PS.

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