LEGAL ISSUES REGARDING AN AGING CLIENT BASE Todd Prendergast Vice-President, Legal, Assante Wealth Management.

LEGAL ISSUES REGARDING AN AGING CLIENT BASE

TODAY’S AGENDA

• Power of Attorney documents

• Capacity

• Dealing with difficult circumstances

• Scenarios

POWER OF ATTORNEY DOCUMENTS

• Form:

• Anything client can legally do him/herself

• One or more

• Alternates

• Presently exercisable vs. conditional

• Enduring vs. not

POWER OF ATTORNEY DOCUMENTS

Substance:

• In addition to the client

– NOT at the exclusion of the client

• Use common sense

• Watch for red flags

• Guidance from Compliance/Legal

CAPACITY

• Living longer

• 2011 was “crossover year”

• More diseases of old age

• High divorce rate

• Unfortunate equation:

Increased life span + economic turbulence + remarriage

= late life litigation, particularly regarding finances

CAPACITY

Capacity to manage property

Incapacitated if:

• Unable to understand information relevant to a decision about property;

OR

• Unable to appreciate reasonably foreseeable consequences of a decision about property.

CAPACITY

Capacity to grant Power of Attorney

• Knows nature and approximate value of assets;

• Aware of obligations owed to his/her dependants;

• Understands attorney’s broad authority;

• Knows attorney must account for decisions;

• Understands revocation rights;

• Appreciates impact of imprudence; and

• Understands exposure to misuse.

DEALING WITH DIFFICULT CIRCUMSTANCES

• Assessment – who is qualified

• You must have a client

• Privacy issues

• Business realities

DEALING WITH DIFFICULT CIRCUMSTANCES

Practical rules to keep in mind

1. People who are mad at each other will eventually end up mad at you.

2. If you assist one of these people, the other one will threaten to sue you.

3. The person you assist will ultimately blame his/her misbehavior on you (see Rule #1).

DEALING WITH DIFFICULT CIRCUMSTANCES

Options to consider – Being proactive

• Suggest POA to client at earliest opportunity.

• Involve the named attorney, to some extent, in discussions.

• Involve family members, to some extent, in discussions.

DEALING WITH DIFFICULT CIRCUMSTANCES

Options to consider – Managing a dispute

• Stay out of other people’s battles (see Practical Rules).

• Do not ignore the issue or dither.

• Gather information.

• Communicate, no secrets with authorized individuals.

• Differentiate between authorized individuals and concerned individuals, but respect both.

DEALING WITH DIFFICULT CIRCUMSTANCES

Options to consider – Resolving a stalemate

• Letter

• Deadline

• May have to pay into court

• Careful documentation of everything

SCENARIOS AND QUESTIONS

• Child says parent is incapacitated

• Stranger shows up with a POA document for your client

• Competing POAs or conflicting directions from attorneys

• One child says the POA is invalid

• POA asks for a copy of all of the client’s statements/records

• POA transferring account in from another financial institution

• Client has died

Thank you

For advisor use only

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