Dementia casts a long shadow in California trust and estate litigation. Contestants claim that an elder with dementia lacked sufficient mental capacity to make an estate planning change, or that dementia left the elder highly vulnerable to undue influence.

The Alzheimer’s Association, in its annual Alzheimer’s Disease Facts and Figures, provides valuable information for lawyers, both planners and litigators. The Association released its 2023 report on March 15. I’ll share pertinent highlights in this post.

California trust and estate disputes often involve allegations that a surviving spouse took advantage of a deceased spouse so as to get more of the latter’s assets.  Often the “spousal financial abuse” charges are leveled by the deceased spouse’s biological children against their step-parent, as discussed in a prior post.  Sometimes care custodians who

California’s probate process aims to expeditiously identify and resolve the claims of creditors against decedents.  Creditors who are unsophisticated, or who simply do not learn of the decedent’s passing, may find themselves with an uncollectable claim against an otherwise solvent estate.  You snooze, you lose.

On the other hand, once a creditor makes a claim in a California probate case, the claim can lie dormant like an oak tree in winter and later come to life to interfere with the distribution of the decedent’s assets.  That’s the lesson of Estate of Holdaway (2019) 40 Cal.App.5th 1059, published by the Court of Appeal this month.

At home caregiver_1In a recent post, we discussed the hazards, from a tax reporting perspective, of erroneously treating California caregivers as independent contractors as opposed to employees.  If a caregiver is an employee (as is often the case), her employer also must comply with the various wage and hour rules that apply to the employment relationship.

Many elders and their families simply pay caregivers a straight hourly rate for 12 or 24 straight hours of work.  This approach, though convenient, may set the stage for employment litigation against the elder.  Below, we’ll discuss the two sets of rules that apply to California caregivers depending on the nature of their work – those who employ caregivers will need to pick the right set of rules and follow them.

At home caregiverHired caregivers (also known as home care aides) permit many California seniors to remain in their homes as they age and need assistance with activities of daily living.  Yet from my window looking out at Sacramento, I can see massive liability associated with the classification and payment of such workers.  Consider that baby boomers are now entering their 70s and a 75-year-old American has a life expectancy of 12.2 years.  A growing number of seniors will need help.

Let’s say Dad has advancing dementia, perhaps caused by Alzheimer’s disease, and needs round-the-clock caregivers to help with cooking, cleaning, toileting, and dressing.  His daughter, perhaps as agent under his power of attorney or as a trustee of his trust, hires a home care agency, at a rate of $25-plus per hour, to provide multiple shifts of caregivers.  Then one of the caregivers offers to work directly for Dad (and to bring in others to do the same) at a straight hourly wage of $15 per hour.  This could save $250 or more per day, which will add up quickly as the weeks pass.

What’s wrong with this approach?  Federal and California law likely treats caregivers as employees of the elders they serve.  If the elder’s family ignores the assorted legal requirements associated with the employer/employee relationship, the elder (or his beneficiaries when he dies) may face hefty liability on two fronts.  As we’ll briefly discuss below, tax authorities may seek taxes, interest and penalties.  In a later post, we’ll explain how caregivers may sue for unpaid overtime and failure to provide meal and rest breaks – indeed, California law encourages such suits by awarding legal expenses to prevailing plaintiffs.