11/06/07: Grandma's Secret Advisor
By Benny L. Kass
Q: Our grandmother is 90 years old, and lives alone in her house. The property is free and clear of any mortgage, and is worth approximately $300,000. We believe grandma is financially well off.
However, a recent credit report indicates that she has a partner in a mortgage that to our knowledge she never took. This secret partner has been an "advisor" to her for some years. When we asked about this, our grandmother adamantly refused to discuss this, but reaffirmed her trust in the advisor.
Our family is concerned about this situation. When she dies, we suspect that there will be financial consequences and that the house - and perhaps her entire estate - will be tied up in lengthy and expensive litigation.
What should we do?
A: The house belongs to your grandmother, and how she decides to dispose of it during her lifetime or upon her death is her absolute right. It is not uncommon for elderly people to seek companions for comfort and safety, and want to gift a portion of their estate to them.
It is also not uncommon for relatives to be concerned about their elders. Sometimes the motives are valid, and sometimes they are not. Why did you obtain a credit report? Did you have permission to do so?
I recognize that you have a dilemma. On the one hand, you respect grandma's right to have a secret advisor and understand that if she wants to give him her house, that's her decision to make. But on the other hand, you are concerned that this "secret" person may be taking advantage of a 90 year old woman.
Did your grandmother prepare a power of attorney? That would be the first place to start your investigation. It is important for everyone - especially elderly people - to have such a legal document. One never knows when disaster may arise. There are two ways in which these powers are drafted: some take effect immediately upon the signing of the document, while others only after a doctor certifies that the person no longer has the legal capacity to make valid decisions. This latter document is often referred to as a "springing" power, because it "springs" into effect upon the happening of certain events.
If you cannot locate any such document, find out if your grandmother has an attorney? If so, discuss the situation with him/her. While the attorney cannot ethically provide you with any personal or financial information, the lawyer may want to investigate to make sure that the client is not being swindled in any way.
If there is no attorney, do you think you can convince grandma to retain legal counsel to review her entire situation? She needs at least four legal documents: a Last Will and Testament, a Durable Power of Attorney, a Durable Power of Attorney for Health, and a Living Will (also known as Advanced Health Care Directive). You certainly have the right to contact an attorney, and to transport her to the attorney's office; but if the lawyer is to represent your grandmother, you should not be present while the attorney is discussing these matters with her.
You should also obtain a title report on the property. That would tell you who is on title and whether there is a mortgage. You should not rely on credit reports, because sometimes they contain erroneous information.
Is your grandmother able to handle her own affairs? If not, you could try to have a guardian and a conservator appointed. This requires filing a petition with the appropriate Court in the county where your grandmother resides. But Judges and legislators understand that in many of these cases, the person petitioning the Court is not interested in the welfare of the proposed ward, but rather is trying to take advantage of an elderly - but wealthy - citizen. Over the years, there have been many such scandals. Accordingly, most Guardianship and Conservatorship laws throughout the country require that the Court carefully investigate each case, so as to be absolutely sure that the ward really needs assistance and that the Petitioner is properly motivated and capable of providing the necessary assistance.
The Court will first appoint an attorney to represent your grandmother and will also appoint a medical professional to determine her mental capacity. These court appointed parties investigate the situation, talk directly to the grandmother (the proposed ward) and also have the authority to discuss and obtain medical and money issues and information with doctors and financial institutions. After the Court receives the reports of these investigations, the Judge will hold a hearing to determine whether to grant the petition.
Unless your grandmother is physically unable to attend the Court hearing, she will be required to attend the hearing. Indeed, I have been involved in situations where the Judge held the hearing at the hospital, so as to be able to talk directly with the proposed ward.
If the Judge is satisfied that your grandmother does not have the capacity to make rational decisions, an order will be issued making the appointments.
Incapacity is defined in the District of Columbia as follows: "an adult whose ability to receive and evaluate information effectively or to communicate decisions is impaired to such an extent that he or she lacks the capacity to manage all or some of his or her financial resources or to meet all or some essential requirements of his or her physical health".(DC Code 21-2011).
The fact that one may be suffering from a mental illness - such as paranoia - does not automatically mean that the Court will appoint a conservator or a guardian. Unless the Judge determines that the proposed ward is unable to provide for his personal and financial needs, the Petition will be denied.
A guardian is charged with handling all of the personal needs of the ward, while a conservator deals with all of the financial issues. If you are appointed conservator, you will stand in the shoes of your grandmother, and will have the authority to seek court approval to nullify any arrangements which you believe are not in the best interests of your ward.
If the conservator finds - after an exhaustive investigation - that the secret advisor has been stealing money from your grandmother, or has somehow convinced her to sign (or has forged) a mortgage in favor of the advisor, this matter will be presented to the Court. If the Judge agrees, the mortgage can be expunged from the land records.
But the Court may not appoint a family member to be the conservator. Often, Judges will appoint independent attorneys to serve in this capacity, so as to assure that the best interests of the ward are being protected. Legal fees can become expensive, which can reduce the value of your grandmother's overall estate.
And if Grandma is competent, and clearly demonstrates to the Judge that she does not want or need the protection of a guardian or a conservator, the Judge will deny the petition.
If you pursue all of the avenues suggested above, you should satisfy your curiosity and your concerns. Clearly, if there was fraud or mismanagement of funds or property, there are legal avenues available to you. But if at the end you learn that grandma really likes that secret friend of hers, and understands that she may have given him money (or even her house),there is nothing more that you can do, other than to say "that's grandma".