Lesson for Couples: Act now while you are well to avoid financial calamity in the event of cognitive decline.
Written by Ryan B. Kalashian
It was a heartfelt move by a high-profile person. Renowned comedian and former talk-show host Jay Leno took significant steps to ensure the well-being of his wife, Mavis, who has dementia, should he die before her. Unable to make changes to their plan because of her condition, Jay successfully petitioned the Los Angeles Superior Court for conservatorship so he could manage their assets and establish a living trust that would provide for her care should he not be around to do so.
The Leno case offers several important lessons for estate attorneys, planners, and individuals.
Pre-Planning with Proper Estate Documents
It underscores the critical importance of preemptive estate planning through proper legal documentation, such as a durable financial power of attorney and an advance health care directive. These instruments allow individuals to designate trusted agents to manage their financial and healthcare decisions in the event of incapacity. Without them, families may face the burdensome process of petitioning for conservatorship, which can be both emotionally taxing and financially costly.
Proactive Planning to Avoid Reactive Measures
Conservatorships often arise in situations where a person’s loss of capacity is unexpected or gradual, as is the case with Mrs. Leno, and the lack of pre-planned documentation leaves loved ones scrambling for a solution. Accepting the need for such measures can be difficult, particularly when incapacity occurs subtly over time.
However, proper pre-planning ensures that decision-making authority is already in place, avoiding the necessity of seeking judicial intervention during what is often a stressful and emotional time for families. A well-drafted power of attorney and advance health care directive provide a seamless transition of authority, preserving the dignity and autonomy of the incapacitated individual while enabling their spouse or family member to act promptly in their best interests.
Mr. Leno could have had authority to create an estate for Mrs. Leno if she had financial power of attorney authorizing him to act on her behalf. This has to be executed while both spouses are competent to make decisions and handle their own affairs.
Family Dynamics and the Role of Conservatorship
Mr. Leno’s long-time role in managing the couple’s finances and his close relationship with Mavis were key factors in the court’s decision. Good estate attorneys consider, among other things, family structure and relationships when advising clients on estate planning.
While conservatorships offer the advantage of court oversight to protect the conservatee from abuse or exploitation, they are not without drawbacks. Strained family dynamics can complicate decision-making and, in such cases, judicial oversight may serve as a safeguard against potential conflicts or accusations of mismanagement. However, this oversight comes at a significant financial and emotional cost, often requiring substantial legal fees and ongoing court involvement.
Conversely, in situations where family relationships are harmonious and the spouse or another close relative is fully trusted, proper estate documents eliminate the need for court involvement altogether. By empowering a spouse or trusted individual to manage finances and healthcare decisions, these documents allow families to maintain control and avoid the stigma and complexities associated with conservatorships.
In essence, pre-planning with a power of attorney and advance health care directive not only preserves resources but also fosters a sense of security and control for both the incapacitated individual and their loved ones.
The Role and Limitations of Conservatorships
The above being said, conservatorships are invaluable tools that serve a distinct and special purpose. They act as a critical backstop when pre-planning is unavailable or incomplete, ensuring that an incapacitated individual’s needs are met and their interests protected. However, conservatorships are not tools of convenience or ease. There are stringent legal processes requiring detailed documentation, professional guidance, and ongoing court oversight. While they provide essential safeguards, conservatorships are not a substitute for thoughtful planning when possible and solely relying on them to address all issues can lead to substantial costs and prolonged legal proceedings.
Authority of a Spouse
It seems intuitive that a husband would have the authority to act on behalf of his wife should she come incapacitated. For a number of reasons, it’s not the case. Prior consent is required for anyone to manage the finances and healthcare decisions of another adult. This protects the individual from a variety of harms, including undue influence and loss of autonomy. In this case, had he known, Jay could have avoided legal complications had he established conservatorship and a living trust before Mavis’ condition worsened. Fortunately, he persevered. Medical reports, financial information, personal testimonies, and other documentation must be presented to support the need for conservatorship, as Mr. Leno’s attorneys obviously delivered to support their petition.
Less Restrictive Options
A primary advantage of a conservatorship is the court’s continuous supervision, which is designed to protect the conservatee from financial or other forms of abuse. Because the individual loses autonomy and can face stigma, courts are very careful about granting a petition for conservatorship. In addition to requiring comprehensive documentation, they also look for less restrictive alternatives, such as “supported decision-making,” which can be as basic as shared bank and email accounts, powers of attorney, and healthcare proxies.
In fact, these less-restrictive options must be considered by law. In 2022, Gov. Newsom signed AB 1663, aka The Probate Conservatorship Reform and Supported Decision-Making Act, which changed the state’s probate conservatorship system to enable people like Mrs. Leno to pursue less-restrictive supported decision-making so they can maintain a level of control over their lives. Individuals with disabilities can consult with trusted supporters to make decisions, an alternative California courts have since been required to consider in conservatorship petitions. Conservatees must be informed about their alternatives under the law. Further, courts may end conservatorships if the parties agree.
A Poignant Reminder
Jay Leno’s dedication to his wife’s care underscores the importance of thoughtful and thorough estate planning. Estate attorneys, planners, and individuals – especially spouses – can learn from this case, ensuring that loved ones are protected and provided for, no matter what the future holds.
For people with loved ones who may have signs of dementia, AARP published a resource guide to assist you. “Dementia is not a normal part of aging. It is caused by diseases or damage to the brain,” the guide says. “The vast majority of older adults do not have dementia, and most will never develop it. However, the older you get, the likelihood of developing dementia increases. Regardless of our age, there are things we can do to help mitigate age-related cognitive decline and support our cognitive health.”