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Bar Journal - Spring 2005

Ethical Challenges in Representing Elderly Clients

By:

I. Introduction

Representing elderly clients is both rewarding and challenging. Unlike many practice areas, however, the elder law practice presents a number of difficult ethical issues on a regular basis. Questions about client identification, diminished capacity, confidentiality and conflicts of interest often arise. Although these issues may not be complicated from an academic standpoint, they are difficult to apply in representing real clients. As the baby boomers age, most lawyers will face these issues regardless of their particular specialty. The purpose of this article is to review these issues, particularly focusing on the proposed New Hampshire Rules of Professional Conduct.

II. Client Identification: Who is the Client?

In representing elderly clients, it is not unusual for family members (generally the adult children) to make the initial contact with the lawyer. It is also not unusual for the adult children to attend and participate in the client meetings. Although the reasons vary from client-to-client, it is common for elderly clients to have little experience with lawyers, to be concerned that they will not understand the legal advice, to be concerned that their weakened physical or mental health may compromise their decision-making ability, and to want trusted family members to assist them with making difficult decisions. The lawyer, however, must be concerned with the possibility that the family members may by exerting undue influence over their elderly parent. Accordingly, it is important for the lawyer to identify who the client is at the outset of the representation, to determine who may participate in the representation, to communicate this clearly to the participants, and to ensure that the entire representation is consistent with these decisions.

Generally, the elderly individual will be the client. However, when meeting with a prospective client, the lawyer must first determine whether the elderly individual has the requisite mental capacity to establish an attorney-client relationship. Similarly, when meeting with an existing client, the lawyer must determine whether he or she still has the requisite mental capacity to continue with the attorney-client relationship. As stated in a treatise dealing with tax, estate and financial planning for the elderly, "[t]he client-attorney relationship is based on the premise that the client has the capacity to enter into and continue the relationship, and that the client can make informed decisions after consulting with her lawyer."1 The American Bar Association Commission on Ethics and Professional Responsibility in a formal opinion stated, "[b]ecause the relationship of client and lawyer is one of principal and agent, principles of agency law might operate to suspend or terminate the lawyer’s authority to act when a client becomes incompetent, and the client’s disability may prevent the lawyer from fulfilling the lawyer’s obligations to the client unless a guardian is appointed or some other protective action is taken to aid the lawyer in the effective representation of the client."2 ABA Comm. on Ethics and Prof’l Responsibility, Formal Op. 96-404, cited in ABA/BNA Lawyers’ Manual on Professional Conduct at 46 (1996) (footnotes and citations omitted).

The determination of whether a prospective or existing client is mentally competent to establish or continue with an attorney-client relationship can be complicated for a lawyer to make. Comment 6 to Rule 1.14 of the Model Rules of Professional Conduct3 (hereinafter referenced as "the Model Rules") provides limited guidance; specifically, it states, "[i]n determining the extent of the client’s diminished capacity, the lawyer should consider and balance such factors as: the client’s ability to articulate reasoning leading to a decision, variability of state of mind and ability to appreciate consequences of a decision; the substantive fairness of a decision; and the consistency of a decision with the known long-term commitments and values of the client."

The recently proposed revisions to the New Hampshire Rules of Professional Conduct (hereinafter referenced as "the proposed New Hampshire Rules") do not provide guidance on how to make the determination of whether a prospective or existing client is mentally competent to establish or continue with an attorney-client relationship.4 It would seem reasonable to consider the guardianship standard, i.e., inquiring into the nature and extent of the individual’s functional limitations and ascertaining his or her capacity to care for himself or herself, or his or her estate.5 Alternatively, it might be reasonable to consider the testamentary capacity standard; specifically, does the client, "(1) understand the nature of the act of execution, (2) recollect what property he wishes to dispose of and understand its general nature, (3) bear in mind his relatives, and (4) elect and choose the disposition to be made of his property."6

Regardless of the appropriate standard, it is often difficult for a lawyer who may only meet with a client several times to determine competency. Comment 6 to Model Rule 1.14 provides that the lawyer may seek guidance from an appropriate diagnostician. According to the American Bar Association Commission on Ethics and Professional Responsibility’s Formal Opinion 96-404, such a discussion of a client’s condition with a diagnostician should not violate proposed New Hampshire Rule 1.6 (Confidentiality of Information), insofar as it is necessary to carry out the representation.7 Because of the complicated nature of determining competency, it is often good practice to obtain a medical opinion on this issue when the lawyer is unable to make a reasonable determination on his or her own. If the prospective or existing client has the requisite mental capacity to establish or continue with an attorney-client relationship, he or she will generally be the client. If he or she does not, the client would be the legal guardian or the attorney-in-fact under the Durable General Power of Attorney.

Once the lawyer has determined who the client is, the lawyer and the client must determine whether other family members may participate in the representation. Although lawyers may be suspicious of family members who wish to actively participate in an elderly client’s affairs, the elderly client may simply be more comfortable meeting with a lawyer if trusted family members are present. The client may believe that the other family members can help him or her understand the legal issues and options presented by the lawyer. The client may also believe that the family members can provide insight and perspective to the situation. Some clients want trusted family members to understand their wishes and have them explained by the lawyer so that they will know what to do if the client becomes incompetent or dies.

The potential problems with having family members participate, however, should be explained to the client; specifically, the possibility that the communications will not be protected by the attorney-client privilege, the possibility that conflicts of interest may arise in the future, and the possibility that the client’s interests may be compromised by a claim made by non-participating family members that he or she was unduly influenced by the participating family members. It is generally good practice to explain these potential problems to the client prior to the initial meeting, without the other family members present.

With respect to privileged communications, Comment 3 to Model Rule 1.14 states that when necessary to assist with the representation, the presence of other persons does not affect the attorney-client evidentiary privilege. However, Comment 1 to the proposed New Hampshire Rule 1.148 states:

"… ABA Comment 3 says that the presence of family members or other persons during discussions with the lawyer, at the clients’ request, ‘generally does not affect the applicability of the attorney-client evidentiary privilege.’ This comment raises concerns. Unless the family member or other person is the client’s legally appointed representative (that is guardian), the privilege would be waived."

Neither the ABA Comment nor the New Hampshire Comment cites legal authority, nor does the New Hampshire Comment state whether an attorney-in-fact under a Durable General Power of Attorney would constitute a "legally appointed representative."

With respect to conflicts of interest, an elder law attorney often is asked to represent family members of existing clients or multiple family members (e.g. in the context of estate planning, Medicaid planning or guardianships). The lawyer must be careful to avoid current and potential conflicts of interest. Proposed New Hampshire Rule 1.7 sets forth the test for determining whether such representation constitutes a conflict of interest:

(a) Except as provided in paragraph (b), a lawyer shall not represent a client if the representation involves a concurrent conflict of interest. A concurrent conflict of interest exists if:

(1) the representation of one client will be directly adverse to another client; or

(2) there is a significant risk that the representation of one or more clients will be materially limited by the lawyer’s responsibilities to another client, a former client or a third person or by a personal interest of the lawyer.

(b) Notwithstanding the existence of a concurrent conflict of interest under paragraph (a), a lawyer may represent a client if:

(1) the lawyer reasonably believes that the lawyer will be able to provide competent and diligent representationto each affected client;

(2) the representation is not prohibited by law;

(3) the representation does not involve the assertion of a claim by one client against another client represented by the lawyer in the same litigation or other proceeding before a tribunal; and

(4) each affected client gives informed consent, confirmed in writing.

With respect to the possibility that the client’s interests may be compromised by a claim made by non-participating family members of undue influence, it is important for the lawyer to determine whether this is a realistic possibility. In addition to questioning the client, the lawyer should review the existing estate planning documents (Wills, Trusts, Durable General Power of Attorney and Durable Power of Attorney for Health Care) to determine who the client, in the past, named as his or her fiduciaries and beneficiaries. If the current participants are the same individuals, the client does not intend to make any significant changes, and the client does not believe that non-participating family members will object, there is likely little risk of an undue influence claim. If the client’s mental condition has diminished significantly since executing the existing estate planning documents, the documents are likely even more important because they are likely the best evidence of who the client would trust as his or her fiduciary and would benefit if his or her mental capacity was still intact.9

Once the lawyer determines who the client is, he or she should clearly communicate this to the client and any family members who participate in the representation. In order to avoid miscommunication, it is generally a good practice to include a section in the attorney-client engagement letter stating who the client is. The engagement letter should be signed by the client. It is also generally a good practice to identify the client in correspondence sent to the client and to state the fact that the client has given the lawyer permission to send copies to the family members.

However, even with signed documents identifying who the client is, the lawyer must still follow the traditional practice associated with an attorney-client relationship in order for the relationship to be respected in case of a future challenge. The lawyer must look to the elderly client, and not family members, when decisions need to be made. By identifying who the client is, the lawyer makes clear who will be making the decisions. Proposed New Hampshire Rule 1.2 (a) states, in pertinent part, "… [a] lawyer shall abide by a client’s decisions concerning the objectives of representation, and, as required by Rule 1.4, shall consult with the client as to the means by which they are to be pursued." Accordingly, the substance of the representation must be consistent with written and verbal statements identifying who the client is.

III. Client with Diminished Capacity

When working with elderly individuals, it is common to have clients with varying degrees of diminished mental capacity. As a result, the first question is when, from a legal standpoint, is a client’s capacity considered diminished? The starting point is proposed New Hampshire Rule 1.14 (a), which provides:

When a client’s ability to make adequately considered decisions in connection with a representation is diminished, whether because of minority, mental impairment or for some other reason, the lawyer shall, as far as reasonably possible, maintain a normal client-lawyer relationship with the client.

Accordingly, the proposed New Hampshire Rule suggests that the primary focus should be on the client’s decision-making ability, as opposed to other functional limitations. As long as the client can make "adequately considered decisions," the client is not considered to have diminished capacity. If, however, his or her decision-making ability is diminished, the rule states that the lawyer should still, as far as reasonably possible, maintain a normal client-lawyer relationship with the client. The proposed New Hampshire Comments do not provide any guidance on how a lawyer should evaluate a client’s decision-making ability. However, Comment 6 to Model Rule 1.14 states, "[i]n determining the extent of the client’s diminished capacity, the lawyer should consider and balance such factors as: the client’s ability to articulate reasoning leading to a decision, variability of state of mind and ability to appreciate consequences of a decision; the substantive fairness of a decision; and the consistency of a decision with the known long-term commitments and values of the client."

In many cases, however, it is very difficult for a lawyer to apply this rule. Often, a lawyer only meets with the client several times. One noted author suggests three possible tests for determining whether an individual’s mental capacity is diminished, the functional approach, the decisional capacity approach, and the basic orientation test.10 When a lawyer is not clear on whether a client has sufficient mental capacity to participate in a legal matter, such as estate planning, it is often a good practice to obtain a medical opinion letter from the client’s treating physician.

If the lawyer concludes that the client has diminished capacity, proposed New Hampshire Rule 1.14 still requires the lawyer to maintain, as far as reasonably possible, a normal client-lawyer relationship with the client. Proposed New Hampshire Rule 1.2(a) defines a normal client-lawyer relationship as one in which, "[a] lawyer shall abide by a client’s decisions concerning the objectives of representation, and, as required by Rule 1.4, shall consult with the client as to the means by which they are to be pursued."11 In a formal opinion issued by the American Bar Association Commission on Ethics and Professional Responsibility, the Commission stated, "[a] normal client-lawyer relationship presumes that there can be effective communication between client and lawyer, and that the client, after consultation with the lawyer, can make considered decisions about the objectives of the representation and the means of achieving those objectives."12 This has been described as the advocacy model.13 The Commission further stated, "[t]his obligation implies that the lawyer should continue to treat the client with attention and respect, attempt to communicate and discuss relevant matters, and continue as far as reasonably possible to take action consistent with the client’s directions and decisions."14

In In re Guardianship of Jason Henderson, the New Hampshire Supreme Court essentially adopted the advocacy model in the context of a guardianship proceeding.15 The Court held, even when an attorney is appointed to represent an allegedly incapacitated person, "the lawyer shall, as far as reasonably possible, maintain a normal client-lawyer relationship with the client."16 The Court held that, "… at a minimum, the lawyer must ‘develop a strategy, in collaboration with the client, for solving the legal problems of the client.’"17 The Court, in making the distinction between the legal counsel and guardian ad litem, ruled that, "[e]ven when representing a client with a disability, legal counsel must, as far as reasonably possible, carry out the client’s decisions."18 In contrast, the Court held that a guardian ad litem, "… should ‘reach an independent conclusion on what is in the best interest of [the proposed ward] ….’"19

From a practical standpoint, a lawyer representing a client with diminished capacity faces unique challenges. The client may have a difficult time understanding a detailed recommendation letter, or any complicated legal terminology. The client may not be using e-mail communications and communicating by telephone may be difficult. When communicating by telephone, it is often difficult for the lawyer to know whether the client understands the information being conveyed, or the questions being asked. Generally, the best (and maybe only way) to communicate with a client with diminished capacity is through face-to-face meetings. Meetings give the lawyer an opportunity to re-assess the client’s competency and to see whether the client understands the lawyer’s advice and, if not, for the lawyer to explain the information until the client adequately understands it.

Comment 2 to Model Rule 1.14 makes clear that, "[t]he fact that a client suffers a disability does not diminish the lawyer’s obligation to treat the client with attention and respect. Even if the person has a legal representative, the lawyer should as far as possible accord the represented person the status of client, particularly in maintaining communication." Comment 3 makes clear that other family members or other persons may participate in discussions with the lawyer. It provides, however, that "… the lawyer must keep the client’s interests foremost and … must look to the client, and not the family members, to make decisions on the client’s behalf."

The lawyer, therefore, must resist the temptation to look to younger or more competent family members for decisions during meetings. The lawyer must focus his or her attention on the client in order to accord him or her the respect that the rule requires. The lawyer must also resist the temptation not to copy the client on complicated correspondence, even though the client may have a difficult time understanding all of the details.

IV. Confidentiality of Client Communications

Proposed New Hampshire Rule 1.6 provides, "(a) A lawyer shall not reveal information relating to representation of a client unless the client consents after consultation, except for disclosures that are impliedly authorized in order to carry out the representation, and except as stated in paragraph (b)." Accordingly, the lawyer cannot reveal information to family members without the client’s consent. When the client requests that family members be permitted to attend and participate in client meetings, it is generally a good practice to ask the client whether his or her family members should be copied on any correspondence and whether the lawyer should be contacting the children directly regarding the representation. Additionally, the client should be aware that he or she may be waiving any attorney-client privilege by involving his or her children in the meetings and permitting the attorney to otherwise communicate with the children. Furthermore, the lawyer should make clear to family members that even though the client may have authorized him or her to contact the family member directly, he or she is representing the client, not the family member. In fact, proposed New Hampshire Rule 4.3 provides, "[i]n dealing on behalf of a client with a person who is not represented by counsel, a lawyer shall not state or imply that the lawyer is disinterested. When the lawyer knows or reasonably should know that the unrepresented person misunderstands the lawyer’s role in the matter, the lawyer shall make reasonable efforts to correct the misunderstanding."

V. Who Pays the Attorneys’ Fees?

Sometimes family members want to pay for the elderly client’s legal fees. In these circumstances, the lawyer has additional ethical obligations to the elderly client.20 Proposed New Hampshire Rule 1.8 (f) provides:

A lawyer shall not accept compensation for representing a client from one other than the client unless:

(1) the client gives informed consent;

(2) there is no interference with the lawyer’s independence of professional judgment or with the client-lawyer relationship; and

(3) information relating to representation of a clientis protected as required by Rule 1.6.

The lawyer must explain to the family members that he or she does not represent them, that he or she will not disclose privileged information to them, and that it is possible that the client will have goals that are different than the family members’ goals.21 The lawyer must take direction from the elderly client, not the family members who are paying the bill. It is generally a good practice to include this information in a letter to the family member who is paying the bill so that there is no confusion in the future. It is also a good practice to include this in the initial engagement letter, and to have the engagement letter signed by the client.

VI. Conclusion

The additional ethical considerations and challenges facing lawyers representing elderly clients must often be dealt with at the beginning of the representation. Prior to and during the initial meeting, a lawyer must determine who the client is, whether the client has diminished capacity, whether there are potential conflicts of interest, and how client communications should be handled in order to maintain confidentiality. Once these determinations are made, a lawyer must ensure that the entire representation is consistent with these determinations. Although at times these determinations may be difficult to make and follow, the lawyer, by establishing a systemized procedure for compliance, should be able to minimize these difficulties.

Endnotes

  1. J. Regan, R. Morgan & D. English, Tax, Estate & Financial Planning for the Elderly § 1.06[4] (2004) (citing ABA Comm. on Ethics & Professional Responsibility, Formal Op. 96-404 (1996); See also, Model Rules of Professional Conduct Rules 1.4, 1.2(a), 1.14 cmts. (2002).
  2. ABA Comm. on Ethics and Prof'l Responsibility, Formal Op. 96-404, cited in ABA/BNA Lawyers' Manual on Professional Conduct at 46 (1996) (footnotes and citations omitted).
  3. According to the Ethics Committee of the New Hampshire Bar Association, "[C]onsonant with prior practice, the present plan is that the ABA Comments will not be adopted in New Hampshire, and will not be amended to reflect the differences between the New Hampshire Rules and the Model Rules."
  4. The Ethics Committee of the New Hampshire Bar Association is engaged in a review of the New Hampshire Rules pursuant to the revisions to the American Bar Association Model Rules of Professional Conduct (the "Revised Model Rules"). Upon completion of its review, the Ethics Committee will submit proposed revisions for review by the Advisory Committee on Rules of the New Hampshire Supreme Court (the "Rules Committee"). The Rules Committee is in turn expected to make recommendations for revisions to the New Hampshire Supreme Court.
  5. J. Regan, R. Morgan & D. English, supra, at f.n. 1; RSA 464-A: 9, I.
  6. 7 DeGrandpre Wills, Trusts and Gifts, New Hampshire Practice § 8.04 (4th ed. 2003). See also, RSA 551:1; Boardman v. Woodman, 47 N.H. 120, 122 (1866).
  7. ABA Comm. on Ethics and Prof’l Responsibility, Formal Op. 96-404, cited in ABA/BNA Lawyers’ Manual on Professional Conduct at 47 (1996) (citing Informal Opinion 89-1530).
  8. According to the Ethics Committee of the New Hampshire Bar Association, "[t]he present plan is that, consonant with prior practice, the ‘New Hampshire Comments’ applicable to some of the New Hampshire Rules will not be adopted by the New Hampshire Supreme Court, but will be maintained by the Ethics Committee on the Bar Association Web site."
  9. Comment 2 of the proposed New Hampshire Comments to proposed New Hampshire Rule 1.14 of the New Hampshire Rules of Professional Conduct, states, in pertinent part, "[e]vidence of the importance of a particular relationship to the client would include express client directions set out in planning documents such as letters of intent, health care or general power of attorney, or nomination of guardian."
  10. See, e.g., Elizabeth Laffitte, NOTE: Model Rule 1.14: The Well-Intended Rule Still Leaves Some Questions Unanswered, 17 Geo. J. Legal Ethics 313, 325-26 (Winter 2004). The author describes the functional approach as one that places an emphasis on the "continuum of incapacity". She describes the decisional capacity approach as one borrowed from the medical field and consisting of three elements: "(1) possession of a set of values and goals; (2) the ability to communicate and to understand information; and (3) the ability to reason and to deliberate about one’s choices." (footnote omitted). She describes the basic orientation test as "determining if the client is capable of understanding time, date, and place." (footnote omitted).
  11. Id. at 326-27.
  12. ABA Comm. on Ethics and Prof’l Responsibility, Formal Op. 96-404, cited in ABA/BNA Lawyers’ Manual on Professional Conduct at 46 (1996) (footnotes omitted), cited in Elizabeth Laffitte, NOTE: Model Rule 1.14: The Well-Intended Rule Still Leaves Some Questions Unanswered, 17 Geo. J. Legal Ethics 313, 326 (Winter 2004).
  13. Id. at 326-27.
  14. Id.
  15. In re Guardianship of Jason Henderson, 150 N.H. 349 (2003).
  16. Id. at 350 (citing N.H. R. Prof. Conduct 1.14 (a)).
  17. Id. (citing N.H. R. Prof. Conduct 1.1 (c)(3)).
  18. Id. (citing N.H. R. Prof. Conduct 1.14 (a)).
  19. Id. (citing SYSTEM-WIDE GUARDIAN AD LITEM APPLICATION, CERTIFICATION AND PRACTICE RULE 2.4.2 (b)).
  20. J. Regan, R. Morgan & D. English, Tax, Estate & Financial Planning for the Elderly § 1.06[2] (2004)
  21. Id.

Author

Attorney Nelson A. Raust is a member of the Trust and Estate Department at McLane, Graf, Raulerson & Middleton, P.A. in Manchester. He is the vice chair of the Elder Law, Estate Planning and Probate Section of the New Hampshire Bar Association and a member of the National Academy of Elder Law Attorneys.

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