Today’s class

Planning for incapacity Revocable trusts (pp. 439-440) Durable powers of attorney Advance directives for medical care Disposition of the body

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Durable powers of attorneypp. 448-449

Powers of attorney terminate upon principal’s incapacity; durable powers of attorney survive the principal’s incapacity (though not the principal’s death)

Trustees versus agents under durable powers Trustees can retain powers after settlor’s death Courts will appoint successor trustees if trustee dies;

only principal can provide for successor agents Trustees enjoy broad powers to conduct transactions

with the trust property; agents tend to be much more limited (though principal can grant broad powers)

Third parties more comfortable dealing with trustees 2

What were the facts in Kurrelmeyer?, p. 449

Once again, we have children from a first marriage pitted against the wife from a second marriage

Kurrelmeyer appointed one of his children and his wife as agents under durable powers of attorney

After Kurrelmeyer lost capacity, his wife created a trust for him, with herself and child as co-trustees, and transferred the Clearwater property into the trust Under the trust, the wife had greater rights to the

Clearwater property than she would have received per Kurrelmeyer’s will, and the children had lesser rights

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In re Estate of Kurrelmeyer

LouisFirst Wife

NancyLouis,

Jr. Ellen

In re Estate of KurrelmeyerSupreme Court of Vermont

Remainder inClearwater

Life Estate inClearwater

Clearwaterin Trust

Martina

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Did the wife have authority to create a trust?

Under traditional agency law, any powers of an agent have to be expressly stated, with terms of appointment construed strictly

This court took a more flexible approach, based on the intent of the principal

Note the trade-off between ability to benefit the principal and the potential for abuse Courts can err on the side of protecting against abuse

by construing the powers very strictly, or they can err on the side of benefiting the principal by construing powers more flexibly, and rely on agent liability to protect against abuse

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Did the wife have authority to create a trust?

Which provisions of the power of attorney suggested the wife could create a trust? “In addition, I authorize my said attorney to: (1) execute

and deliver any . . . trust instruments” (p.451) The agent also was authorized “to add all of my assets

deemed appropriate by my said attorney. . . to any trust of which I am the Donor” (p.451)

What suggests the wife could not create this particular trust? The power of attorney authorized the making of gifts

“to members of my family (other than himself or herself)” (p.452)

Did Kurrelmeyer really contemplate his wife revising his will?

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Could Kurrelmeyer delegate the power to create a trust?

Trusts serve important purposes in estate planning and asset management, and there are not countervailing considerations that would justify a prohibition on delegation of the trust-creation power, as with the power to execute a will (p. 453)

But if agents can’t execute wills, how can they use trusts to rewrite wills? The court observed that Kurrelmeyer could and did

delegate the power to “convey any real estate . . . which I may own”

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Could Kurrelmeyer delegate the power to create a trust?

A better way to explain why agents can rewrite wills through their trust-creating power: The prohibition on agents writing or amending a

will is rooted in longstanding statutory interpretation that would need legislative revision.

But it is not rooted in a powerful public policy against surrogate decisions. Indeed, there will be many cases in which changes in circumstance make a change in estate planning desirable after the principal loses decision-making capacity.

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Did the wife breach her fiduciary duties as agent?

By conveying the Clearwater property to the trust, she gained greater property rights The power of attorney prohibited her from making gifts to

herself Fiduciary principles prohibit agents from using their

authority for their own benefit except as authorized On the other hand, the wife argued that the

conveyance was justified by prudent tax and estate planning objectives In addition, the approval of the co-trustee provided a

safeguard against abuse Case remanded for further proceedings on this

question9

What happened on remand? As note 1 indicates, p. 454, the trial court found

that the trust carried out Kurrelmeyer’s intentions, which he had discussed with an estate planning attorney He hadn’t executed his intentions because he wasn’t

sure whom to name as his wife’s co-trustee, and he lost his decision-making capacity before resolving the question (too much deliberation can defeat an estate plan)

In the trial court’s view, the wife was simply carrying out Kurrelmeyer’s intent (which was to give her the freedom to move out of the Clearwater property)

The Vermont Supreme Court upheld the trial court’s holding (992 A.2d 316 (Vt. 2010))

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Advance directives for health care

Treatment directives (i.e., living wills) Specifies treatment in the event of incompetence,

usually for life-sustaining treatment decisions. Proxy appointments

Designates an agent to make health care decisions for the patient.

Hybrid or combined documents Incorporates both of the first two approaches, that

is, directs treatment preferences and designates an agent to make substituted decisions.

Important to make sure that people share preferences about organ donation with family11

End-of-life decisions

Patient has the right to accept or refuse medical treatment (federal constitutional right, plus state constitutional right and/or state common law right)

Even if the treatment is life-sustaining Includes all treatments, whether

ventilator, dialysis, antibiotics, or artificial nutrition and hydration

Regardless of patient’s diagnosis and prognosis

Survives a patient’s loss of mental capacity 12

Substitute decisionmaking Look to prior instructions from

patient (e.g., advance directive, oral statements, pattern of practice, religious or other moral views)

Follow prior instructions if they give “clear and convincing” evidence of the patient’s preferences Either preferences with regard to

treatment or with regard to surrogate decision maker

Note the absence of formalities that we’ve seen with preferences about the distribution of one’s estate

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Substitute decisionmaking

Evidence of the patient’s wishes is clear and convincing when it is “sufficient to persuade the trier of fact that the patient had a firm and settled commitment” to decline treatment. O’Connor, 531 N.E.2d 607, 613 (N.Y. 1988).

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Clear and convincing evidence

Some states look only at specific evidence

Other states (including IN) look at full range of evidence.

Some states find that patient’s prior statements amount to clear and convincing evidence while other states would find the same evidence to be insufficient.

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Clear and convincing evidence absent

Provide treatment (NY before 2010)

Defer to the family’s wishes (IN, MA, VA)

Decide on basis of patient’s best interests (AZ, MN)

Vary the standard depending on the patient’s prognosis (CA, MI, NJ, NY, PA, WI) These “default” rules are the medical

treatment analogues for intestacy rules

Implemented by court decision or statute

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Indiana’s living will statute

The attending physician shall . . . certify . . . that a person is a qualified patient if . . . The attending physician has

diagnosed the patient as having a terminal condition. . . .

Ind. Stat. Ann. § 16-36-4-13

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Indiana’s living will statute

“Terminal condition” means a condition . . . from which . . . there can be no recovery; and death will occur from the terminal

condition within a short period of time without the provision of life prolonging procedures.

Ind. Stat. Ann. § 16-36-4-5

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Indiana’s living will statute

The living will declaration of a person diagnosed as pregnant by the attending physician has no effect during the person’s pregnancy. Ind. Stat. Ann. § 16-36-4-8(d)

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Indiana’s living will declaration

If at any time my attending physician certifies . . . that (1) I have an incurable . . . illness, (2) my death will occur within a short

time; and (3) the use of life prolonging

procedures would serve only to prolong the dying process,

I direct that such procedures be withheld or withdrawn . . . . Ind. Stat. Ann. § 16-36-4-10

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Indiana’s living will declaration

____I wish to receive artificially supplied nutrition and hydration, even if the effort to sustain life is futile and excessively burdensome to me.

____I do not wish to receive artificially supplied nutrition and hydration, if the effort to sustain life is futile or excessively burdensome to me.

____I [leave] the decision [about artificially supplied nutrition and hydration to my health care proxy]. Ind. Stat. Ann. § 16-36-4-10

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Indiana’s living will statute

A declaration must be substantially in the form set forth in either [the living will declaration or the life prolonging procedures declaration], but the declaration may include additional, specific directions.

The invalidity of any additional, specific directions does not affect the validity of the declaration. Ind. Stat. Ann. § 16-36-4-9

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Indiana’s living will statute

This chapter does not impair or supersede any legal right or legal responsibility that any person may have to effect the withholding or withdrawal of life prolonging procedures in any lawful manner. Ind. Stat. Ann. § 16-36-4-17(e).

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Indiana’s life prolonging procedures declaration

[I]f at any time I have an incurable . . . illness determined to be a terminal condition I request the use of life prolonging procedures that would extend my life.

This includes appropriate nutrition and hydration. . . . Ind. Stat. Ann. § 16-36-4-11

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Indiana’s living will statute

A living will declaration . . . shall be given great weight by the physician in determining the intent of the patient. . . . Ind. Stat. Ann. § 16-36-4-8(f)

A life prolonging procedures will declaration . . . does require the physician to use life prolonging procedures as requested. Ind. Stat. Ann. § 16-36-4-8(g)

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Indiana’s living will statute

An attending physician who refuses to use, withhold, or withdraw life prolonging procedures from a qualified patient shall transfer the qualified patient to another physician who will honor the patient’s living will declaration . . . Ind. Stat. Ann. §16-36-4-13(e)

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Indiana’s living will statute

If the attending physician, after reasonable investigation, finds no other physician willing to honor the patient’s declaration, the attending physician may refuse to withhold or withdraw life prolonging procedures. Ind. Stat. Ann. § 16-36-4-13(f)

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Indiana’s power-of-attorney statute

[An attorney in fact who] has the authority to consent to or refuse health care . . . [may have health care] withdrawn or withheld when it is not beneficial or when any benefit is outweighed by the demands of the treatment . . . . Ind. Stat. Ann. § 30-5-5-17(a)

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Indiana’s power-of-attorney statute

To empower the attorney in fact to act, the following language must be included in an appointment under IC 16-36-1 in substantially the same form set forth below: I authorize my health care representative to

make decisions in my best interest concerning withdrawal or withholding of health care. If at any time based on my previously expressed preferences and the diagnosis and prognosis my health care representative is satisfied that certain health care is not or would not be beneficial or that such health care is or would be excessively burdensome, then my health care representative may express my will that such health care be withheld or withdrawn . . . even if death may result.

Ind. Stat. Ann. § 30-5-5-17(a)        

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Indiana’s power-of-attorney statute

My health care representative must try to discuss this decision with me. However, if I am unable to communicate, my health care representative may make such a decision for me, after consultation with my physician or physicians and other relevant health care givers.

To the extent appropriate, my health care representative may also discuss this decision with my family and others to the extent they are available. Ind. Stat. Ann. § 30-5-5-17(a)

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Indiana’s Health Care Consent Act

An individual . . . may appoint another individual as a representative to act for the appointor in matters affecting the appointor's health care.

An appointment and any amendment must meet the following conditions: Be in writing. Be signed by the appointor or by a designee

in the appointor's presence. Be witnessed by an adult other than the

representative. [Note that living will statute and out-of hospital

DNR statute restrict who may serve as a witness.] Ind. Stat. Ann. §16-36-1-7 31

Indiana’s Health Care Consent Act

The appointor may specify in the appointment appropriate terms and conditions, including an authorization to the representative to delegate the authority to consent to another.

The authority granted becomes effective according to the terms of the appointment.

The appointment does not commence until the appointor becomes incapable of consenting. The authority granted in the appointment is not effective if the appointor regains the capacity to consent.

Ind. Stat. Ann. §16-36-1-7 32

Indiana’s Health Care Consent Act

When a surrogate decision-maker has not been appointed, health care consent may be given by: a judicially appointed guardian of the

person, or if no guardian a spouse, a parent, an adult child, or an

adult sibling, or the individual's religious superior, if the

individual is a member of a religious order

Ind. Stat. Ann. §16-36-1-5

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Indiana’s POST Act

Allows conversion of patient preferences into physician orders

May be completed by the patient, a guardian appointed for the patient. or a surrogate decision maker

appointed by the patient (but not an unappointed family member)

Ind. Stat. Ann. §16-36-6-7

Indiana’s POST Act Applies to patients who have:

an advanced chronic progressive illness,

an advanced chronic progressive frailty, a terminal condition (per the living will

statute definition), or a medical condition that, if the person

were to suffer cardiac or pulmonary failure, CPR would be unsuccessful or within a short period the person would experience repeated cardiac or pulmonary failure resulting in death (per out-of-hospital DNR statute)

Ind. Stat. Ann. §16-36-6-5

Out-of-hospital DNR statute

Applies when the patient has either: a terminal condition (as defined in the

living will statute) or a medical condition such that, if the

person were to suffer cardiac or pulmonary failure, resuscitation would be unsuccessful or within a short period the person would experience repeated cardiac or pulmonary failure resulting in death.

Ind. Code § 16-36-5-10 36

Out-of-hospital DNR Statute

Applies to locations other than acute care hospitals or other health facilities

May be executed by the patient or the patient’s representative

May be issued only by the patient’s attending physician

Emergency medical services commission instructed to develop a DNR bracelet or necklace Ind. Code 16-36-5

Alternatives to statutory forms

Medical Directive ABA health care planning guide Description of goals of treatment

E.g., I want treatment only if it will allow me to:

Maintain or regain the ability to recognize and communicate with family and friends

Maintain or regain consciousness Leave the hospital

Important to ensure that the alternative form satisfies the state statutory form’s procedural formalities

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In re Martin

“Only when the patient’s prior statements clearly illustrate a serious, well thought out, consistent decision to refuse treatment under these exact circumstances, or circumstances highly similar to the current situation, should treatment be refused or withdrawn.” 538 N.W.2d 399 (Mich. 1995)

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