General Practice, Solo & Small Firm DivisionMagazine
American Bar Association
General Practice, Solo, and Small Firm Division The Compleat Lawyer
Spring 1998 © American Bar Association. All rights reserved.
Domestic Issues for the Mature Client
BY ELLEN WIDEN KESSLER
Ellen Widen Kessler is a partner in the firm of Lowe, Stein, Hoffman, Allweiss & Hauver in New Orleans. She is a Louisiana Board Certified Family Law Attorney and a Fellow in the American College of Matrimonial Lawyers. She has been an adjunct professor of law at Tulane University Law School and Loyola University Law School, New Orleans, and is an instructor in CLE programs in the area of family law.
The story goes: One day in family court, the bailiff called the last case. The judge was surprised to see two very elderly people slowly approach the bar. The man wore a large hearing aid and walked with a shaky gait, clutching tightly to his cane. Behind him came a woman, using an aluminum walker, shuffling along as slowly as the man. Both were bent over and had deep wrinkles on their faces.
The judge asked them if they were husband and wife in the case called, and both shook their head in agreement. "You people want a divorce?" the judge asked incredulously. "Yes," said both parties, nodding in unison. "How long have you been married?" the judge asked. "Sixty-three years," said the man. "No," snapped the woman. "Sixty-four last June!" The parties glared at each other.
"And you want a divorce after all of this time?" The judge was angry. "You are in the twilight of your lives, and you can't have that much longer to live. After all of these years together, explain to me why do you want a divorce now?" "Well, Your Honor," they answered together, "we wanted to wait until the children were dead!"
While this story is intended to be humorous, the facts are not that incredible. Greater acceptance of divorce has led more people than ever to consider this as an option for themselves. Increasing numbers of older people, whose children and grandchildren have been divorcing for years, are discovering that their own marriages may not be sacrosanct or secure. It is not unusual for couples married more than 30 years to divorce, and divorces after 40 and even 50 years of marriage are no longer uncommon.
As physical fitness becomes more fashionable and widespread, and as medical advances keep people healthier longer, late-in-life marriages are becoming more common. Divorced spouses over 50 and 60 years of age—and widows and widowers, too—are remarrying with increasing frequency.
Most domestic law courts and cases use broad, basic legal concepts, like "best interest of child" in custody cases and "equal" or "equitable division" in property division on divorce, and then apply the concepts to the unique facts of each case. Domestic relations cases are like snowflakes; no two are exactly alike, and each requires special tailoring based on the facts of the case. With older clients, the property issues can be more complicated, the future earnings potential is limited, and the needs of the parties can be more acute.
The first hurdle with the older client is to determine whether she is competent to make the decisions ahead. Like most determinations, this is an easy one if the client is obviously competent; an initial interview with the client alone can reveal this. (Keep all children, fiancees, and others brought along to assist the client out of the interview for this determination; their presence and "help" can mask the deficiencies of the client.)
Determining Client Competence
For everyone's protection, attorney notes should expressly indicate the client's competence, the duration of the meeting, and the matters discussed to avoid any later questions. While competence of a client is generally presumed, in the case of the older client, it should be expressly noted and filed. The older the client, the more important this is for everyone, even though age or physical infirmity alone should never be indicia of competence or the lack of it.
It is easy to spot the obviously incompetent client. This should also be noted. Once the determination is made, there should be no more work for the client unless she has a judicially appointed guardian who requests representation that is appropriate. For example, a divorce can be appropriate relief in some cases, such as when spouses have lived apart for many years, or the onset of a disability in one of them may have caused the separation.
A duly appointed guardian or a person acting under a durable power of attorney or similar authority may request the representation to clarify the marital status. The lawyer who is consulted by a guardian or attorney-in-fact for a disabled person has an ethical responsibility to consider the propriety of any requested services and refuse those that the lawyer considers improper.
Determining competency is most difficult (and most important) when the client is in that gray area between obvious competence and obvious incompetence. An older client may be physically frail or hard of hearing and still be competent to make his own decisions. Yet age and/or physical problems often do raise serious questions about mental competence. Forgetfulness, mild disorientation, or silence are suggestions that problems exist.
When any question of competence arises, the lawyer should be provided with some objective guidance—a letter and a discussion with a treating physician, for example, duly noted. A family member may not be nearly as reliable and should not be the sole determiner of competence or lack of it. Adult children are not always objective and can cause or exacerbate problems; unless an adult child is the legal guardian or has authority under a valid private act, she is not the client and cannot bind or dictate the parent's action.
It is worth the time to secure the independent opinion, especially if marriage or divorce is to follow. As in all other areas of the law, a person without capacity may not enter into a contract (a prenuptial agreement or a marriage) or take legal actions (to dissolve a marriage). Such legal actions may be set aside if the party was incompetent.
Planning for Remarriage
The mature client can encounter complicated problems when she marries, or, more commonly, remarries. The client who is marrying after the first spouse dies can be more naive than the one remarrying after one or two earlier divorces; if two such people marry each other, there can be misunderstandings that lawyers should help clarify before the wedding.
Adult children can and often do exert a strong influence over their remarrying parent, sometimes as much out of self-interest as filial concern. These children can destroy a parent's new relationship. If one or both remarrying spouses have substantial personal resources, their children may feel especially anxious. It is the lawyer's responsibility to assist and protect the client, of course, even if the children's concerns are understandable.
While a prenuptial agreement can generally address and resolve many of the financial concerns for the parties involved and can often comfort the clients' children, the agreement must be tailored to the facts and the goals of the clients. As in other aspects of family law, legal knowledge and experience must be tempered with patience. The client must be comfortable enough to be completely honest (or as close to that as can be reasonably expected) with her lawyer, another reason to make most of the meetings with the client, especially the early ones, private affairs that exclude the children and/or spouse-to-be.
At least the following should be done before any agreement is presented:
1. Complete asset and liability disclosure to the lawyer. Later, that complete disclosure must be made to the future spouse.
2. Discussions of the client's attitudes and goals to be accomplished (whether to spend or hold onto the assets, for example), how they accord with the new spouse's goals, and whether these decisions will affect the children. The lawyer should determine the client's intentions regarding lifestyle, cost, and contribution in the new marriage.
3. Disclosure of medical information about the client and the spouse-to-be. (Any significant medical problem, like the issue of competency, should be verified with the medical provider. If special medical treatment or care seems likely, find this out from the health care provider, and consider the cost and the effect of the medical condition as part of the agreement.)
4. Constructive involvement of other professionals—financial and otherwise—who have been actively involved in the client's or new spouse's financial affairs.
5. Determination of the intentions of the client in case he dies before the new spouse or if she dies first. Where will the survivor live? Are any inheritance or inter vivos gifts intended? When? Is the children's inheritance adversely affected, and if so, can that be avoided?
6. Consideration of financial, estate, and income tax consequences of intended plans.
After this information is gathered, a tailored agreement can be fashioned for this couple. The more specific the agreement, the better. For example, the parties can provide that if they live together for ten years or more, one spouse will provide additional testamentary protection if he predeceases the other. Day-to-day financial responsibility can be apportioned. And provisions that reserve each party's property and provide for or eliminate alimony and other support in case of divorce can be fashioned.
In preparing a complex prenuptial agreement, or even a simple one involving substantial assets, make sure it is reviewed by your client's financial advisor/accountant. Where the assets are substantial, there may also be business or family lawyers involved with the client, and each lawyer's review is advisable. When the client and her financial people have reviewed the agreement, it should be submitted to the opposing party, who hopefully is represented. The other party must receive full disclosure of assets in or related to the prenuptial agreement and must understand and freely agree to all the terms.
While almost all jurisdictions uphold prenuptial agreements with these elements even when the complaining party was not represented, care should be taken to avoid this situation before the agreement is executed, especially when there is disparity between the parties' financial resources. Often, the wealthy fiance may pay for independent counsel for his or her intended, but this counsel must truly be independent. One lawyer cannot ethically represent both parties in a prenuptial agreement, and even the appearance of such a conflict must be vigorously avoided.
Execution of the prenuptial agreement should be a formal occasion. While it is advisable that the agreement recite specifically that both parties had independent counsel in the negotiation and drafting of the agreement or knowingly and voluntarily waived that right, at execution the same representations should be made again. I advise that the parties execute the agreement on the record, before a court reporter, and have it witnessed, even if the jurisdiction does not require it. In some circumstances, the execution could also be videotaped, especially if competency could be an issue later (even though the lawyer has had objective assurances of competence before execution).
Divorce and Older Clients
There are generally two kinds of divorces for more mature clients: those dissolving long-term marriages and those ending shorter marriages that didn't work out. In both cases, the lawyer needs basic and complete information and assistance, including:
1. Complete disclosure of assets and liabilities. As in the prenuptial situation, knowledge means the difference between effectiveness and malpractice. The origin and kind of assets (inheritance, for example) and liabilities (joint or separate, medical or gambling debts) are important. Gaining the information can be a problem, especially as the older client may be secretive, guarded, or unaware. If necessary, this information can be found or verified in discovery from banks or brokerage houses, but obviously the more information from your client, the better. (This is one time that adult children may be helpful in furnishing information, but it may need to be verified for accuracy.)
2. Involvement and information from other professionals involved. The client should authorize the lawyer to contact directly the family banker, doctor, business adviser, accountant, stock broker, etc.
3. Exploration and understanding of financial resources and benefits that are available to both spouses, including Social Security payments, annuities, retirement benefits, and pensions. Will one spouse inherit from a parent or relative (a 65-year-old client with a wealthy 89-year-old parent in a nursing home is not uncommon, and that can affect planning for that 65-year-old's future) or be entitled to qualify for Social Security or survivor's benefits under the other spouse's earning record? Are there long-term disability plans or insurance plans? Is there life insurance with a cash value, and who owns the policy?
Accurate financial and medical information about the spouses is critical in all divorce situations, regardless of the age of the parties, but with the older client, life seldom gives a second chance to repair finances and provide for future security. If one or both of the parties is neither working nor able to, as is often the case when marriages of older adults end, continuing financial security is important for both parties. Alimony is only one of the support considerations. Each party's Social Security benefits and pension income must be considered, and with only retirement income and no earned wages, the family income must be allocated fairly.
Health insurance. Maintaining health insurance is critically important. The Combined Budget Reconciliation Act (COBRA) authorizing medical insurance for the non-employed former spouse may not be the answer to the older client's problems; for example, the 36-month, mandatory COBRA eligibility may either be insufficient or must end as a matter of law when the beneficiary becomes eligible for Medicare. COBRA also does not apply to government workers or employees of small companies (with less than 20 employees). Even if Medicare is applicable, who is going to provide or pay for supplemental insurance? Suppose one party needs a nursing home. Is there coverage, or can the parties afford such insurance?
If the parties are older but one spouse is still employed and earning income, alimony and health insurance solutions may be simpler, but then hard problems generally are only deferred. When the wage earner retires, the same problems will have to be solved. These issues must be met and disposed of when the divorce is granted.
Taxes. Taxes also present a serious problem. For example, an older client has the benefit of excluding gain from the sale of a principal residence, but when the parties have been separated and are divorcing, the financial settlement should consider the tax consequences on the spouse who does not occupy the property. Distributions from retirement plans may also carry taxable consequences that must be considered.
Estate planning. Previous estate planning by both the spouses in happier times may create unhappy consequences during a divorce, especially when assets have been shielded (or hidden) and are not available to one or both of the spouses who may need them at the time of divorce. An irrevocable trust put in place five years before can cause havoc if a party is unable to reach his share of assets needed when the parties' joint retirement income must be divided between them. Life estates granted as part of estate planning can create nightmares during divorce. It may be helpful or even necessary to involve the estate planning expert to try to resolve these problems.
Older clients have the same anxiety as younger clients relating to financial matters, and their concern is exacerbated by the knowledge that there is no longer any real earning power in either spouse sufficient to address present inequities in the future. As with younger clients, a divorce generally means a reduction in the accustomed standard of living for at least one party; when there is no wage earner, the lifestyle of both parties will generally suffer. Retirement planning is usually done for one household, and generally two homes cannot be maintained comfortably when the one income must be shared.
While this may not be sufficient reason for two unhappy parties to remain married, it certainly should be explained to the client (actually, to both parties) and, if the client wishes, to the adult children. Asset division must be made carefully. The help of an accountant who is sophisticated enough to understand the problem is invaluable; the estate planner, too, may be important to the solution.
Alternatives to divorce. Moral or religious scruples, financial circumstances, and other considerations sometime cause older people to reject the traditional idea of divorce and choose to maintain separate living arrangements. For some older clients, a separate maintenance agreement, a "legal separation," or any more formalized relationship short of divorce is preferable to an actual divorce.
The decision of both parties not to divorce does not mean they are relegated to living together in misery. While the laws of each jurisdiction differ, some agreement can generally be arranged, as long as there is some mutual cooperation and the ability of both parties to compromise. This kind of solution requires the same kind of information and planning that a divorce does, as it secures independent living for both of the spouses and disposes of, at least to some significant extent, their assets and liabilities.
If the parties choose to divorce and/or live separately, the lawyer should ensure that the other party relinquishes all control of her client's finances and life as part of whatever agreement is reached. For example, previously drafted durable powers of attorney or health care powers of attorney, which a spouse could enforce on behalf of the other spouse, must be changed. A child, a relative, or a physician (the lawyer should avoid being designated) should substitute for the client's former spouse.
Of course, lawyers may not ethically represent both parties to the divorce. If the parties insist on "using" only one lawyer to secure the divorce, the lawyer must make clear that he is representing only one party and that the other party has chosen to remain unrepresented. This should be confirmed by a signed letter in the file, by provisions to that effect in any document prepared, and by acknowledgment on the record in any judicial proceeding.
Resolving Other Issues
Grandchildren. Custody of children is generally not an issue when the older client divorces, whether the divorce ends a long-term marriage or a shorter second or third marriage. But from time to time, one or both of the spouses is raising a grandchild or another child, and custody of that child must be with one, but not both, of the spouses when they separate or divorce. While the matter may be governed by law (generally a step-grandparent has no rights whatsoever), the child or children involved are affected.
Legal advice must remind the client (and the spouse) of the effect of divorce on the child, and that it is in the child's best interest to maintain contact with the other grandparent. (This kind of advice often does not work when the divorce is between younger parents, but sometimes a grandparent may listen. It is worth the try.)
Grandparents are a sympathetic minority that more and more legislative bodies want to protect, generally out of self-interest (many legislators are grandparents, and those who aren't aspire to be). Most states have statutes allowing grandparents the right to visit their grandchildren, but generally the visitation rights are assured only when the grandparent's child dies, although visitation may be possible if the grandparents are at odds with their own child, the parent of their grandchildren. While jurisdictions vary in requirements for grandparental visitation, it generally is available in some form or another to the grandparents.
When the grandparents divorce, the visitation rights remain available to both of them, even if exercised individually, as long as both are the biological or adopted parents of one of the parents of the grandchildren. The practical effect of this can be burdensome; if two grandparents exercise visitation rights separately, it takes a great deal of a child's free time. In some circumstances, especially those in which there is substantial acrimony between the grandparents, a court may restrict both grandparents' rights.
The key in a situation involving access to grandchildren, whether for step-grandparents or grandparents related by blood or adoption, is to foster in your clients the need to consider the child's interest in continuing a relationship with all of the people who have been a part of his life so far.
In some states, grandparents may have an obligation to support grandchildren, but when they do, the obligation generally arises only in limited circumstances. (In Louisiana, for example, support for a grandchild is available only in those circumstances in which both parents are unable to provide the child with support. The grandparents are required in those cases only to support the grandchildren's "basic necessities." (See, e.g., Levy v. Levy, 536 So.2d 742 (La.App. 3d Cir. 1988).) Generally, grandparents' gifts of money, educational costs, or lessons cannot be compelled or used to reduce the parents' child support obligations. Check your jurisdiction's law carefully on this if the issue arises.
Alternatives to marriage. Just as some older married parties may not wish to divorce for a variety of reasons, especially financial ones, divorced or widowed elders may not wish to remarry, even when they find a person to whom they are strongly attracted.
For many older people, a remarriage may bring adverse financial consequences: a widow's pension may terminate upon remarriage, health coverage or benefits may be lost, rights to occupy property may be compromised, etc. Adult children may actively discourage remarriage because it could affect their inheritance, or a person simply will feel no need or desire to remarry. When such a person finds another person and wants to share the rest of her life with him, the couple may decide to mimic their grandchildren and live together without marriage. The difficulties that these lifestyle decisions can create can be addressed and often resolved with legal assistance.
Assuming the parties can avoid creating a common law marriage (and maintaining separate names and accounts will help, but that is a local law question), a contractual arrangement can be made. It should specify how living expenses and other joint expenses are to be shared or divided and where the parties should live. Both parties should generally waive the right to more accounting between them but provide some plan for prospective events, like medical care, nursing assistance, rights to remain in the house after the partner's death, and disposition of jointly acquired property.
In preparing this agreement, the lawyer must understand the issues and proceed with tact, because often the choice of this apparently aberrant lifestyle will mean that the parties are uncomfortable or defensive or, at the other extreme, unusually cavalier about the consequences. (Adult children may be extremely uncomfortable and/or moralistic about this, too.) As each party to such arrangement has only such rights as the contract bestows, it is important that the agreement be as specific as possible.
Case in Point: The Second Mrs. Boggs