Could A Client's Competency Be Questioned?

Jackie Bedard
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Occasionally, we may have a client who changed her mind about the person she once wanted in charge of her medical decisions should she become ill. This kind of change can easily elicit a real life case of sour grapes for someone who thinks he knows what's better for our client than the client does. That's the kind of scenario currently headed to trial in May as a legal battle plays out between a media mogul's former girlfriend and his lawyers, according to the Los Angeles Times

The mental capacity of billionaire founder of Viacom, Sumner Redstone, 92, is being challenged by his former companion, Manuela Herzer. Redstone is controlling shareholder of CBS Corp. and Viacom, Inc. 

The much younger Herzer, 51, oversaw Redstone's household affairs and healthcare regimen for a few years until she was removed from his home in October and cut from his estate plan according to the Times. Redstone then named Viacom Chief Executive Philippe Dauman as his new health care proxy.

Herzer hired a psychiatrist to examine Redstone. The psychiatrist found the elderly man to be mentally incompetent. A guardianship judge has since questioned the mogul's decision, saying how unlikely it is that a media executive in New York City could have the time or ability to look in after an ailing Redstone in California, "even assuming his best of intentions," the Times quoted. The judge denied motions by Redstone's lawyers to dismiss the case.

The public legal battle has revealed accusations against Herzer, who a nurse claimed had been caught stealing and lying to Redstone, thus the reason for being kicked out of his life. In addition, the judge appears to doubt whether Redstone and his daughter, Shari Redstone, have repaired their strained relationship and questioned why her father didn't name her as proxy instead of east coast business colleagues? Shari Redstone is vice chair of Viacom and CBS Corp.

Lawyers for the mogul's daughter issued statements that Redstone has long intended to leave his estate largely to charity, adding that Shari Redstone has no financial interest in the case and supports her father's charitable plans.

Avoid a Challenge

What a mess, right? Likely, this could have been avoided if Redstone had taken steps to prove his mental competency before formally removing Herzer from his estate plan.

If a client approaches our firm with wishes to change to her plan, and she is of an advanced age or is suffering a malady that puts her in poor or fragile health, we discuss the possibility of others challenging her mental capacity to make these decisions. We may recommend she have a thorough physical and mental exam to establish competency.

In our experience, a well-crafted power of attorney for healthcare document is one of the best defenses to prevent loved ones from fighting over control. However, we still inform clients that there is always the chance a guardianship court may still choose to ignore the power of attorney document if there is perceived to be undue influence. 

Five Questions

We ask new clients who wish to change their health care power of attorney the following questions, and you should, too:

1.    When was the document last updated?

2.    Did an estate planning attorney review it? Any "lawyer-in-a-box" forms they downloaded from online sources might not be state specific and could be invalid. 

3.    Is the person originally named as health care power of attorney still the same person they want in charge of medical decisions? Why or why not?

4.    Is this same person also named as the durable financial power of attorney? Should the same person hold both positions? Ultimately, that's up to our clients. But we recommend they consider naming different people for each separate power of attorney role, as the duties of these positions are quite different. 

5.    Finally, was the existing health care power of attorney document integrated into a full estate plan? Or is it a stand-alone document? At the very least, we recommend every new client needs a last will and testament, a durable financial power of attorney, a healthcare power of attorney, a letter of instruction for their wishes regarding the disbursement of personal belongings, instructions for burial or cremation, and an advanced health care directive (living will).

Not having an updated, lawyer-reviewed, and thoroughly integrated plan means a client's wishes could be challenged and her general welfare could be left up to a guardianship judge. If changes to a plan are made by an ill client or an elderly client, then establishing competency also is an important step to avoiding a court challenge.

To learn more about common estate planning issues, check out our free guide, Estate Planning Pitfalls: The 12 Most Common Threats to Your Estate & Your Family's Future, or to discuss your estate planning concerns, please call our office at 919-443-3035 or use our contact form.