Fleming & Curti, P.L.C. - Helpful Family Members End Up Helping Themselves

SEPTEMBER 28, 2009 VOLUME 16, NUMBER 55

Helpful Family Members End Up Helping Themselves

The story is distressingly familiar to elder law attorneys. An aging relative, often alone and perhaps physically or mentally impaired, begins to rely on family members or friends to look out for them. Perhaps the family members begin to help with bill-paying or caretaking. Too often, however, those helpful family members begin to view the senior’s money and property as rightfully their own.

That is what happened to Constance Jarvis, a Connecticut woman. When her husband (of fifty-eight years) died in 1999, Ms. Jarvis, then 84, was left living alone, legally blind and hard of hearing. She and her husband had no children, but she did have a large family of nieces and nephews, some of whom stepped up to help out.

A group of nieces, nephews and their children arranged for Ms. Jarvis to visit a local lawyer, Thomas Condon, to discuss what Ms. Jarvis should do. Two of her nieces were in the meeting from start to finish. Mr. Condon never met with his putative client alone to discuss what she wanted; at the end of that meeting, he gave her a quitclaim deed to sign, conveying her home to the two nieces and a nephew.

Over the next few weeks Ms. Jarvis’ bank accounts were also retitled. By early the next year, about $150,000 of her money was in accounts naming the nieces and nephews, and she had about $6,000 remaining in her own name. For the next five years her niece met with her twice a month, paid her bills from her small checking account and transferred any accumulated income from her Social Security and pension to one of the accounts naming the nieces and nephews. During that time another $130,000 was transferred; Ms. Jarvis, meanwhile, received $850 as a monthly stipend from her own checking account.

When Ms. Jarvis asked, five years later, for an increase in her monthly allowance, her niece refused. By that time, Ms. Jarvis had begun paying college tuition for a great-niece; a note at the time indicated that it would be considered an “advance” on any inheritance the great-niece might receive.

When Ms. Jarvis demanded that her property be returned, the nieces and nephew hired a lawyer to resist her efforts. They used $20,000 of her money to pay their lawyer.

The trial court ordered the nieces and nephews to convey a life estate in Ms. Jarvis’ house back to her, and to repay her $20,000. The Connecticut Court of Appeals upheld that ruling, rejecting a suggestion that they deny relief because one of Ms. Jarvis’ alleged purposes had been to illegally transfer assets so that she could later qualify for Medicaid assistance with long-term care costs. It might be that her intentions were suspect, ruled the appellate court, but the nieces and nephews had not made that argument before the trial court, and could not raise it for the first time on appeal. Jarvis v. Lieder, September 15, 2009.

So what might a competent and responsible elder law attorney have done to make Ms. Jarvis' situation more tenable from the start? A number of things might have made a difference:

It was wrong and unconscionable of the lawyer not to meet with Ms. Jarvis separately. In fact, better practice would have been to meet with her alone first, before hearing from any of the nieces or other family members. Her goals might have been quite different from theirs, even at that early stage. If the lawyer thought he was her lawyer, he owed it to her to find out what she wanted and to help her attain her goals.
A follow-up meeting should have been held, and perhaps more than one. Having the quitclaim deed ready to sign at the initial conference, or preparing it while Ms. Jarvis and her nieces waited together in the conference room or lobby, did not afford her an opportunity to consider what she was doing, and to review in her own mind what questions she might have.
If in fact eligibility for Medicaid long-term care assistance was one of Ms. Jarvis' concerns, a good elder law attorney could have counseled her about that process at length. Transferring some of her property to family members and waiting out a period of ineligibility for Medicaid might have worked in 1999, when she first met with an attorney, but it would not work the same way today. More importantly, it is apparent that Ms. Jarvis' resources (particularly a good, reliable retirement income) might well have provided sufficient care for her for the rest of her life. Perhaps she needed reassurance about the sufficiency of her assets and income, rather than an abrupt move toward giving it all away to her nieces and nephews.
Someone needed to explain the limits of their authority to her nieces and nephews. If they are good-hearted enough to step in and help her manage her affairs, it does not follow that they have any right to Ms. Jarvis' assets for their own uses. Asking, and expecting, her to fund a grand-niece's college education is a good illustration of that issue -- perhaps she genuinely wanted to help out, but it looks rather more like taking advantage when viewed through the lens of several years later.
If Ms. Jarvis wanted to have someone -- family members or professionals -- able to help her pay bills and take care of financial and personal affairs, she could have signed a living trust, or a power of attorney, with appropriate limitations and cautions. As things happened, she ceded control over nearly all of her assets to her nieces and nephews, who after almost a decade of helping out apparently came to think of her money as their entitlement.

It is worth noting that, though Ms. Jarvis got the right to live in her own home and recovery of the money spent by her nieces and nephews on legal fees, she did not prevail on the larger issues. She still does not own her own home (the nieces and nephews have a "remainder" interest, and will receive it automatically on her death), and they still have control of the bulk of her assets.