For many attorneys who practice estate planning and elder law, the process of assigning a person power of attorney when his or her elder relative has become incapable of making decisions is the cheapest and most practical course of conduct.
Unfortunately, the lawyers acknowledged, it’s also the one most prone to abuse.
According to Raymond J. Falzone Jr., a Delaware County attorney who regularly practices in elder law planning, the only time a person who is granted power of attorney provides an accounting of his or her actions under Pennsylvania rules is if another party intervenes. And, at that point, Falzone said the "horses are already out of the barn."
With that in mind, several lawyers agreed that power of attorney should be a key focus of the Pennsylvania Supreme Court’s recently formed elder law task force — chaired by Justice Debra Todd — which comes as the American population, and particularly that of Pennsylvania, is aging at an increasing pace.
While attorneys diverged on the point of whether there should be more accountability placed on those with powers of attorney, all were in agreement that educating Pennsylvania’s aging population about the process was a good thing.
The task force, made up of 38 judges, lawyers and social workers, has been charged with recommending solutions that include court rules, legislation, educational imperatives and other practices, according to a press release earlier this month from the Administrative Office of Pennsylvania Courts.
The task force has three subcommittees — one examining the qualifications of guardians and attorneys working with the elderly; a second devoted to looking at the monitoring and data collection for guardianship; and a third on elder abuse and power of attorney.
According to the release, there are 2 million Pennsylvanians over the age of 65, representing more than 15 percent of the state’s population and making Pennsylvania the fourth-oldest state in the country by that standard. Baby boomers, who make up 76 million of the country’s population, will surely provide a surge to that population on a state level.
"As a society, we have increased concentration on child abuse, but the issue of elder abuse has not kept pace," Todd said in the release. "This task force is the judiciary’s attempt to study the issues under its purview and make adjustments now, before the numbers of older Pennsylvanians and the commensurate jump in abuse occurs."
According to the release, research funded by the National Institute of Justice found that about 11 percent of people over 60 suffered from some sort of abuse in 2009.
The National Center on Elder Abuse at the U.S. Administration on Aging, meanwhile, estimates that, for every one case of elder abuse reported, there are five more that go unreported, Todd noted in the press release.
Changes to Power of Attorney Process?
Reached for comment, Todd said there was a lot of discussion at initial task force meetings regarding both the guardian and power of attorney process, a possible signal of what the task force will examine as it completes its work over the next year.
The high court formed the task force as it became clear there was a need for more structure and monitoring of guardian programs, along with more reporting and judicial review of guardians’ reports when they come in, she added.
A legal guardian, as opposed to a power of attorney, is appointed only after a "ward" is deemed incapacitated and only after a hearing in court. The alleged ward has due process rights and has the right to an attorney after being alleged to be incapacitated — a standard that emerged about 20 years ago, the last time guardian rules were examined, when the standard for guardianship was mental incompetence.
Power of attorney, on the other hand, can only be signed over when an individual has not yet been determined to be incapacitated and, accordingly, can assign power of attorney himself or herself.
Under Pennsylvania guardianship rules, guardians have to provide more accountability of their actions. They have to file annual reports outlining the current residence of the ward, the ward’s health and mental condition, his or her living arrangements and whatever support program he or she has. Guardians also must list the number of visits they make, for how long they visit, and render a yearly opinion as to whether the guardianship should continue.
For Falzone, who is not part of the task force, these annual reports serve as a good check and balance to the guardianship program and would do the same for cases in which a relative or friend is assigned power of attorney. The power of attorney process is one that, as long as it’s going smoothly, does not traditionally involve court dates.
"Why shouldn’t the same rules apply to the power of attorney as to the guardianship [program]?" Falzone said. "There’s no real court rule."
Others viewed the power of attorney process as one in which the primary benefits are the lack of court dates and the lack of reports to fill out.
"The beauty of it is court oversight is not mandatory," said Laura E. Stegossi, chair of the trusts, estates and wealth planning group at Weber Gallagher Simpson Stapleton Fires & Newby. "We don’t want to turn it into a type of document or instrument where it’s coming closer to a guardianship proceeding where annual reports are being filed."
The party turning over control can delineate just what powers the person has, she added.
Also, it’s cheaper.
Stegossi said she’s heard of power of attorney papers being prepared for as little as $200 at some law practices.
Guardianship legal work, on the contrary, often runs in the $4,000 to $5,000 range, she said.
Carol Sikov Gross, an attorney at Pittsburgh elder law firm Sikov and Love and a task force member, said the thousands of power of attorney cases she has handled have demonstrated to her that most people do not abuse their powers.
For Gross, who is on the elder abuse and powers of attorney subcommittee, the relatives who have been appointed power of attorney are trustworthy.
Gross did acknowledge that when somebody games the system, the elder victim is often left with nothing. "When you have abuse, it’s always really bad," she said. "Nobody’s going to steal a little bit." But the longtime elder-law practitioner said the guardianship route was the more expensive and burdensome process for managing an incapacitated elder party’s finances and favored power of attorney when that course of action is feasible.
She added that most guardians in Pennsylvania are also doing their jobs properly, yet still often find themselves in court asking for permission to spend their ward’s principal, or arguing over a nominal raise in monthly expenditures like a nursing home bill.
She hoped to offer a different perspective for an arm of the task force that is mostly made up of people who Gross said only see the bad side of guardian and power of attorney cases — when they end up in court.
"Most of the people on that subcommittee are DAs and judges," she said.
District attorneys often see the negative side of guardian and power of attorney cases in the prosecutions of those who abuse the elderly, Gross said, and judges often decide conflicted cases. But that’s not the norm, according to the attorney.
Regardless of whether the task force elects to impose court rules or seek legislation for power of attorney assignments, attorneys converged on the notion that educating elderly Pennsylvanians about handing over decision-making should be a goal of the task force.
Namely, aging citizens should be aware that, in signing power of attorney papers, they can adjust what powers they are handing over and to what extent they are doing so.
"The power of attorney document, it grants broad-ranging powers," Stegossi said. "Essentially, the person you name in the power of attorney [document] can step into your shoes. We really need to educate individuals who are assigning power of attorney."
Added Falzone: "This is going to be more and more an issue as the boomers come through the system."
Allegheny County District Attorney Stephen A. Zappala Jr., who chairs the elder abuse and powers of attorney subcommittee, did not return a call requesting comment.
Pennsylvania Superior Court Judge Paula Francisco Ott, who chairs the guardianship monitoring committee, said her group will examine what has worked in certain regions of the state regarding monitoring guardians and will look to recommend implementing certain practices at a statewide level.
In her home county, Chester County, Ott said volunteers have been reviewing guardian reports and red-flagging potential misconduct, usually related to finances.
As for power of attorney cases, Ott said they are "just that much harder to monitor because they’re created by the person themselves."
Philadelphia Court of Common Pleas Judge Joseph D. O’Keefe is heading up the guardianship appointment and qualifications committee.
O’Keefe said his subcommittee will look at not only the guardians themselves, but also the attorneys who are representing the alleged wards in court.
He said Philadelphia, his home county, has the benefit of organizations like the Philadelphia Corporation for Aging — he said "those people are angels, as far as I’m concerned" — but other counties don’t have those resources.
It is those counties that his subcommittee will pay particularly close attention to.
"It’s really important because none of us are getting younger," O’Keefe said.