Ethical Considerations When Representing the Elderly Client
A. Keeping in Tune with the Code of Professional Conduct
Because of the nature of the practice, the elder law practitioner may be confronted with a variety of unique and sometimes complex ethical issues.
For instance, the identity of the client, an issue often taken for granted in many practice areas, becomes a critical and sometimes challenging issue. Recognizing potential and actual conflicts of interest among multiple clients (such as family members) is crucial. Special considerations must be made when dealing with a client with diminished capacity.
The Rules of Professional Conduct provide a starting point of reference for practitioners struggling with these difficult issues. A brief description of other helpful authorities follows.
ACTEC Commentaries on the Model Rules of Professional Conduct, American College of Trust and Estate Counsel (3d ed. 1999) (www.actec.org).
These commentaries were propounded by the American College of Trust and Estate Counsel to bridge the gap that they perceive in the Rules of Professional Conduct with respect to the guidance those Rules provide to lawyers who are engaged in the practice of trusts and estates.
The New Jersey Advisory Committee on Professional Ethics, Ethics Telephone Research Hotline (ETRH), (900) 526-5600.
Pursuant to R. 1:19-9, the Advisory Committee on Professional Ethics shall operate a “900” telephone number to provide general information and research assistance on issues of legal ethics within New Jersey. The information provided by the hotline is of no binding legal effect. Legal research assistance, rather than a legal opinion, is furnished, and the inquirer is charged with making his own final judgment on the issue presented. In a subsequent disciplinary or other legal proceeding, neither the fact that inquiry was made, nor the results of the inquiry, is admissible.
Other resources include written opinions of the New Jersey Supreme Court Advisory Committee on Professional Ethics; written disciplinary decisions of the New Jersey Office of Attorney Ethics; and the following treatises: Reports of the Special Study Committee on Professional Responsibility of the Section of Real Property, Probate and Trust Law of the American Bar Association, 28 Real Property, Probate and Trust J. 763 (Winter 1994); and Restatement, The Law Governing Lawyers (Proposed Final Draft No. 2 (April 6, 1998)).
B. COMPETENCY OF THE CLIENT
What is the role of an attorney in representing a client who is elderly with questionable mental capacity? As a threshold matter, the attorney must understand the definition of incapacity. According to the New Jersey statutes, an “incapacitated person”5 is a person who is “impaired by reason of mental illness or mental deficiency to the extent that he lacks sufficient capacity to govern himself and manage his affairs.” N.J.S.A. 3B:1-2.
The standards for determining capacity differ, depending upon the transaction involved. For example, a testator possesses the capacity to make a valid will if he is at least 18 years of age and “of sound mind.” 5 New Jersey Practice, Wills and Administration §33 at 149 (Alfred C. Clapp) (rev. 3d ed. 1982) (quoting N.J.S.A. 3B:3-1). This requires that the testator be “capable of understanding the general nature of the business in which he is engaged and the particular distribution he is effecting; of recollecting the property of which he means to dispose and the persons who naturally are the objects of his bounty; and of comprehending the interrelation of these factors.” Id., §36 at 151-152 (citations omitted). This standard is not considered to be demanding. A “very low degree of intelligence” is sufficient; in fact, even a person with memory lapses or classified as insane or a “senile dement,” or who is sufficiently impaired as to justify the appointment of a guardian, may have the capacity to make a valid will. Id., §36 at 153-154; §38 at 170.6
The capacity to enter into a contract (e.g., a power of attorney) is considered to be a somewhat higher standard. The person entering into such a contract must possess “the ability to understand the nature and effect of the act in which he is engaged, and the business he is transacting.” See Kisselbach v. County of Camden, 271 N.J. Super. 558, 564 (App. Div. 1994); Wolkoff v. Villane, 288 N.J. Super. 282, 287 (App. Div. 1996); In re Zaolino, No. A-5189-69T2, 1998 WL 34001287 (N.J. App. Div.).
Because it is not unusual for an elder law attorney to be confronted with a client whose capacity is in question, an attorney may wish to have a standard procedure in place for addressing the issue, by utilizing and documenting capacity assessment tools to make an initial evaluation of capacity and, if in question, by referring the client for an evaluation by a geriatric physician.
The New Jersey Rules of Professional Conduct require that, to the extent possible, the attorney maintain a normal attorney-client relationship with a client who is impaired:
Client Under Disability
(a) When a client’s ability to make adequately considered decisions in connection with the representation is impaired, whether because of minority, mental disability or for some other reason, the lawyer shall, as far as reasonably possible, maintain a normal client-lawyer relationship with the client.
(b) A lawyer may seek the appointment of a guardian, or take other protective action with respect to a client, only when the lawyer reasonably believes that the client cannot adequately act in the client’s own interest.
As explained by the New Jersey Supreme Court in In re M.R., “[a]s guardians of personal rights, courts have a special responsibility to protect the right of self-determination.” 135 N.J. 155, 166 (1994). Recognizing the fact that competent individuals have the right to make even irrational choices, unless those choices endanger the individual or others, the M.R. Court concluded that a similar right must be available to incapacitated persons:
“Ordinarily, an attorney should ‘abide by [the] client’s decisions concerning the objectives of representation,’ R.P.C. 1.2(a), and ‘act with reasonable diligence…in representing [the] client,’ R.P.C. 1.3. The attorney’s role is not to determine whether the client is competent to make a decision, but to advocate the decision that the client makes. That role, however, does not extend to advocating decisions that are patently absurd or that pose an undue risk of harm to the client.”
Id. at 176.
When proceeding with the representation of an incapacitated client, an attorney is well-advised to remember the words of caution offered by the M.R. Court:
Advocacy that is diluted by excessive concern for the client’s best interests would raise troubling questions for attorneys in an adversarial system. An attorney proceeds without well-defined standards if he or she forsakes a client’s instructions for the attorney’s perception of the client’s best interests.
Id. at 176 (citation omitted).
The American Bar Association has approved revisions to Model Rules of Professional Conduct 1.14 that embody a new approach to the representation of clients with diminished capacity. Maher, K.,Preserve and Protect: Revised Rule Provides Guidance When Clients Have Diminished Capacity, ABA Journal December 2003 at p. 34. The revised commentary to the rule offers several factors that the lawyer may consider in assessing a client’s capacity, including: the client’s ability to articulate the reasoning that led to a decision; variables in the client’s state of mind and ability to appreciate consequences of decisions; the fairness of a decision and its consistency with the client’s long-term goals and values. It is only necessary that the lawyer reach a decision as to whether the client has capacity with respect to a specific task at a specific time. Id.
Interestingly, the commentary states that, although the lawyer must remain aware of potential conflicts of interest, the lawyer may permit family members or third parties to be present to assist during client consultations without affecting the attorney-client privilege.
While the former Model Rule 1.14 states that a lawyer may seek protective action if he or she believes that “the client cannot act in the client’s own interest,” revised Model Rule 1.14 adds that the lawyer must also believe that the client is “at risk of substantial physical, financial or other harm unless action is taken.” If that standard is met, the revised Model Rule suggests protective actions less intrusive than seeking guardianship. These actions include consulting with family members, or allowing a time period to elapse to allow reflection, reconsideration or improveme t of the circumstances contributing to the client’s diminished capacity, and using durable powers of attorney. Id.
1 The following is a discussion of the potential Medicaid consequences of various strategies; the attorney must also consider potential income, gift and estate tax consequences of these strategies, specifics of which may not be included in this discussion.
2 In the author’s experience, this $2,000.00 limit currently is not enforced by Medicaid.
3 The look-back period is 60 months where the transfer involves a portion of a trust. N.J.A.C. 10:71-4.10(b)(9).
4 As set forth herein, this $2,000.00 limit currently is not enforced by Medicaid.
5 New Jersey courts no longer refer to these individuals as “incompetent,” and court rules and statutes have been amended to substitute the phrase “incapacitated person” or “mentally incapacitated person” for “incompetent.” SeePressler, Current New Jersey Court Rules, Comment to R. 4:86-1 at 1931 (Gann).
6 However, because a testator with diminished capacity is more easily imposed upon, a contestant may more easily prove undue influence if the testator was in a weakened state. See, e.g., R. Houghton and M. Wigod, The Will Contest at 10 (ICLE Aug. 28, 1998).
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