Sick and elderly father is not competent, has crushing debt. Now what?
February 17, 2013 5:21 PM   Subscribe

My father had a profound stroke. He now has severe dementia and delusions. Sibling and I need to get power of attorney and also speak with a lawyer to determine long-term issues and help get rid of his crushing debt. Do I need an elder law attorney or an estate planning attorney, and what else might I need to know?

My 72-year-old father had a profound stroke several months ago. Prior to that, he was overseeing his own (very small) company, which he owns exclusively, managing several employees and living independently; the stroke left him with moderate dementia, psychosis and delusions. He is in a room-and-board care facility, paid for by long-term care insurance. He will not get better or be able to return to his old life, or manage anything about his life. He has no short-term memory, cannot read or even follow the plot of a lame sitcom. It's as if he had a lobotomy. He is in a wheelchair and needs help toileting, feeding himself, taking meds, and must be watched 24-7 as he has severe sundowner's syndrome. He has no one but my sister and my. It's all horrific and sad.

My sister is paying his credit card bills and other bills as they come in from his checking account, and is in contact with the employees of the company to keep things moving smoothly, and fights monthly with the life insurance company to get the checks they owe him so we can continue to pay for his care. But Sis can't continue overseeing the employees and juggling checks for much longer the way things are - she works full-time and is a single mom, and has no money of her own to bail Dad out (neither do I).

What Sis has discovered is that Dad accrued more than $30,000 in personal credit card debt over the past few years, and also has sunk considerable amounts of money into his little company, as it is barely self-sustaining. All told he probably has in excess of $100,000 worth of personal debt, with no savings at all, or retirement fund. No assets – no car, no property – expect for the actual furniture and equipment pieces of the business itself. Dad does not draw a salary from the company, but it was paying his rent for the apartment he no longer has (since the stroke), and was also covering some incidentals. He gets a small Social Security check every month, which is not even covering his minimum due payments on his cards. So, none of this is sustainable for more than a few more months.

We are going to pursue power of attorney, with Dad's blessing, to be able to manage his financial issues. My sister already is on Dad's bank account, per Dad's request, which is how she has been able to write checks for him. I do not know if an estate lawyer or elder law attorney is the way to go to get advice on selling his company or not [it's worth almost nothing - an employee is interested in buying, which may mean taking over the debt], how to negotiate down or walk away from his credit debt, how to ensure his long-term care insurance continues to cover his care, and whatever else we are missing. I have some personal experience with credit counseling and negotiating down debt, but have no experience with bankruptcy or legal disability issues.

I do not know how to choose which lawyer to approach in his town. Dad is 200 miles away and I do not even know where to start looking for advice on what to do for him in terms of managing his debt and obligations. We both just want to protect him and help him as much as possible. And I very much want to be able to lift this burden from my sister, who lives near Dad and has been graciously trying to do all of this simply because she lives closer.

You are not my lawyer/you may or may not be a lawyer/I am not asking for legal advice, etc, etc, but if anyone has experience with something similar, what sort of lawyer might I be looking for? How do I pick one, when they all seem similar? Do I even need one? Is there anything I am missing or any additional advice you can think of? And if you have been through this, you have my profound sympathy.

Thank you!
posted by anonymous to Law & Government (8 answers total) 4 users marked this as a favorite
You want a good elder law attorney -- (s)he will have seen something very similar to this half a dozen times. You will find one by referal from lawyers you trust, or lawyers people you know trust; someone who is in the brokerage, insurance or accounting business is a good place to start. You absolutely must not rely upon advertisements; as a rule, good lawyers in this field don't advertise.

The key things that you need to evaluate with the lawyer are the value of the business, the value of the extended-care and other insurance policies (chances are someone with extended-care coverage would also have life and maybe even disability insurance), the nature of the non-credit-card debt, and how personal bankruptcy or an out of court compromise with creditors would interact with all of the above.
posted by MattD at 5:47 PM on February 17, 2013 [2 favorites]

So sorry to hear about what you are going through. As far as I know, you cannot get POA over someone once they are no longer mentally competent to grant it. I am in Canada.
posted by lulu68 at 5:59 PM on February 17, 2013 [1 favorite]

The competency of the grantor of a Power of Attorney would only become an issue if a challenge is raised. The only likely potential challenger would be your father. Most others would rather be able to deal with you/your sister. This is not legal advice.
posted by uncaken at 6:09 PM on February 17, 2013

Go to this page and find a member lawyer in your area.

This situation cries out for a court-ordered guardianship. A POA is probably not going to be enough.
posted by megatherium at 3:59 AM on February 18, 2013 [1 favorite]

Since advice to get a lawyer is fairly frequent on Metafilter, there is a wiki resource giving details on how to go about it. It may be helpful.
posted by contrarian at 4:24 AM on February 18, 2013

I think an elder-focused lawyer would be a great place to start, but I would ask the one you speak to about a recommendation for a bankruptcy lawyer as well. If you can get all or some of those debts discharged you won't have to put his meager social security income toward them.
posted by Aizkolari at 8:17 AM on February 18, 2013

Oh yeah, bankruptcy is the way to go here. Get a good lawyer and stop paying his debts.

At this point, what does he need a credit rating for? Bankruptcy protects what remain of his assets, especially a house if he owns one.

As for running the business, you may want to shut it down, especially if it isn't profitable.

You may need to go out to help your sister get it all sorted out and to arrange what's going to happen from here.

Good luck. It sucks, and I'm sorry.
posted by Ruthless Bunny at 9:10 AM on February 18, 2013

You are likely going to need to seek a guardianship for your father. Right now, with the dementia, psychosis, and delusions, it is doubtful that he has the capacity to consent to a power of attorney.

Guardianships involve petitioning the state court to provide a guardian to oversee your father's legal and healthcare decisions. Depending on the state, it is also likely that the process will involve appointment of a conservator to oversee your father's financial decisions. Both will likely involve some sort of court proceeding to determine whether your father is mentally competent to manage his own legal and financial matters. The court will probably appoint a local lawyer to advocate on behalf of your father and oppose the guardianship/conservatorship. The lawyer you hire will argue that your father is unable to manage his affairs and must therefore be placed under guardianship. Once the guardianship/conservatorship is in place, the guardian will begin addressing some of your fathers legal and financial problems.

You may be able to avoid bankruptcy since your father's creditors cannot garnish his monthly Social Security income. But this involves some tricky financial maneuvering to make sure that his income is not commingled with his other assets.

Because guardianship is such a complicated issue, and because there is the possibility of a bankruptcy for your father's estate, you should contact a local elder law attorney. I would recommend using the referral service through the National Academy of Elder Law Attorneys (NAELA). You can find their online directory of lawyers at

I am an elder law attorney, but this response is not intended to create an attorney-client relationship and does not constitute legal advice.
posted by Dignan at 6:17 PM on February 18, 2013 [1 favorite]

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