Financial Powers of Attorney

Incapacity planning is a major component of an estate plan.  Quite often people name one person to serve as a health care agent and another person to serve as a financial agent.  What role does one agent have as opposed to the other in the context of contracting for medical services?

While the Probate Code does not provide a bright line, a recently-published California case explores the question in the context of the admission of a patient to a residential care facility for the elderly.  The Third District Court of Appeal, in Hutcheson v. Eskaton FountainWood Lodge (2017)  17 Cal.App.5th 937, found that the health care agent was the one authorized to admit the patient and the facility’s failure to obtain consent from that agent nullified an arbitration clause, thus exposing the facility to litigation in Superior Court.

Siblings arguingMost California trust and estate disputes are emotionally intense, and none more so than sibling conflicts over the care of an aging parent. Like a child custody fight in the family law context, siblings battle over whether Mom will remain in the home where she lives, move in with one of them, or move to an assisted living facility. They fight over who will manage Mom’s finances and interact with her doctors.

California courts have the tools to resolve these disputes, but struggle to evaluate competing claims of siblings and have a limited attention span to parse through them. Very often, when siblings cannot find middle ground, Mom’s care and finances will end up in the hands of a third party conservator and trustee, after many thousands of dollars in legal fees.