Posts Tagged ‘assisted living’

Ward Should Be Allowed To Express Wishes, Hire Counsel

APRIL 11, 2005  VOLUME 12, NUMBER 41

When the legal system takes over decision-making and care of an incapacitated adult, there is a struggle between competing goals. It is important to provide adequate protection and supervision, but it is also important to maintain the ward’s personal autonomy and self-determination. It is often difficult to decide how much latitude to give to an incapacitated ward. Even the court system charged with overseeing that balancing act can sometimes be too restrictive.

Sheri Rosengarten was the subject of a guardianship in Pennsylvania. Before the onset of her mental illness she had established a revocable living trust naming herself and her brother David as co-trustees. Unfortunately, her brother had mismanaged her trust assets after she became incapacitated, and so her personal and legal affairs were in some disarray.

The court appointed a non-family member, lawyer Susan B. Smith, to serve as Ms. Rosengarten’s guardian (of both her person and estate—what would be called a guardian and conservator in Arizona). Thereafter Ms. Smith began to manage Ms. Rosengarten’s personal and financial affairs, although assets in her living trust were being managed by her father as successor trustee.

Because Ms. Rosengarten was in an assisted living facility, her guardian decided it was time to sell her residence and add the proceeds to the assets under management. Ms. Rosengarten objected (as did her father), thinking that she might some day be improved enough to return to her home. In the meantime she thought it made sense to rent the house out—perhaps as a group home that could be tailor-made for her as her condition improved.

Although the court had appointed an attorney to represent Ms. Rosengarten in the guardianship proceeding, she wanted to choose a different attorney and argue against the sale of her home. The court, however, refused to hear from the lawyer she had hired, insisting that the attorney previously appointed could represent her interests. After a brief hearing the judge ordered that Ms. Rosengarten’s home should be sold, and the proceeds delivered to Ms. Smith rather than held in her living trust.

The Pennsylvania Superior Court (that state’s intermediate appellate court) reversed the trial judge’s holdings and remanded the case back to the trial court. Once she had raised the argument that she was no longer incapacitated, said the appellate judges, the first question to be addressed was whether a guardianship was still necessary. At that hearing Ms. Rosengarten should of course be allowed to choose her attorney unless it could be shown that she lacked capacity to even enter into a lawyer-client relationship, and her wishes should be respected to the fullest extent possible. Estate of Rosengarten, March 24, 2005.

Adult Home Operator Pleads Guilty In Death Of Resident

MARCH 27, 2000 VOLUME 7, NUMBER 39

Although nursing homes are more familiar to most Americans, nearly half of all elderly residents of institutions live in adult care homes. Often housed in converted residences, adult care homes usually provide personal care, supervision and activities for a small group of residents. Care in such facilities is often excellent, and may be more personal and comfortable than a larger, medically-oriented nursing home. Sometimes, though, the care can be horrific—as Chiyeko Tanouye’s case attests.

Ms. Tanouye was placed in an adult care home operated by Raquel Bermisa in mid-1999. At age 79, the Pearl City, Hawaii resident was completely unable to provide for her own care, and was confined to her bed.

One common problem experienced by bedridden patients is the development of bedsores—more properly referred to as pressure sores or decubitus ulcers. Ms. Tanouye began to suffer from such sores within a short period of her placement.

Treatment for pressure sores is normally straightforward. Patients must be turned regularly to relieve the pressure on affected areas, and the sores must be cleaned, protected and treated with salves. Regular nursing and medical review is essential to help in the reduction of pressure sores.

Unfortunately for Ms. Tanouye, her caretakers did not follow up with the prescribed medical care. By the time Ms. Bermisa took her to the emergency room last August, she was beyond treatment. Ms. Tanouye died shortly thereafter.

Hospital personnel reported the death to prosecutors, who ultimately charged Bermisa with manslaughter. As operator of the care home, Bermisa was responsible for seeing to the care of Ms. Tanouye, and she failed in that duty, prosecutors argued. Ms. Tanouye’s death from sepsis caused by inflammation of her open wounds could have been avoided, and Bermisa had a duty to provide the care necessary to prevent that death.

Last month Bermisa plead guilty to manslaughter, and she is awaiting sentencing. She is facing a one-year jail term for her failure. Prosecutors believe that hers may be the first such conviction in the country.

Most adult care homes provide good care. Despite that, neglect is unfortunately all too common. Such total disregard for patient care is not common, but it is difficult to estimate how frequently such incidents occur.

Under Arizona law a person can be charged with manslaughter for “recklessly” causing the death of another. That standard is met when the defendant is aware of the risk of injury and consciously disregards that risk. An Arizona conviction for manslaughter will lead to imprisonment for 6 to 18.5 years.

“Upscale” Facility Qualifies For Iowa Property Tax Exemption


Ballard Creek Community, an assisted living facility in Huxley, Iowa, is operated by a religious organization called Madrid Home for the Aging. Ballard Creek is a new development, and its current residents are mostly financially secure. Can such a facility qualify for a property tax exemption as a charitable use?

According to the Story County Board of Adjustment, Ballard Creek should not be accorded the preferential tax status because of the way it actually operates its business. The Board of Adjustment points out that Ballard Creek residents tend to be wealthy, the accommodations are plush, and the services provided are minimal. Even though the owner of Ballard Creek is unquestionably a charitable organization, reasoned the Board of Adjustment, it should not be exempt from property tax on this particular project.

Iowa law, like that of Arizona and most other states, exempts the property of both religious and charitable organizations from having to pay property tax. In Iowa, the owner of property must prove three things in order to qualify for the exemption:

1. The property must be used by a charitable, religious or educational organization,

2. The property may not be used for pecuniary gain, and

3. The use of the property must be solely related to the religious or charitable purpose of the organization.

While the Board of Adjustment conceded the first two points, it argued that Ballard Creek was essentially an upscale and profitable retirement home. Madrid Homes pointed to its bylaws, which require that its facilities be operated to “provide Christian care, including housing and medical services, to the elderly.” It also pointed out that every resident was required to contribute to a special fund, designed to help pay for those residents who become unable to afford the rent in the future.

Assisted living facilities are often confused with more traditional nursing homes and similar institutions. The very purpose of Ballard Creek, as its owners pointed out, is to provide support for elders in an apartment-like setting, encouraging independence and family involvement. When such facilities work, they help aging seniors stay out of nursing homes longer, and may even prevent institutionalization altogether.

Iowa’s Court of Appeals agreed with Madrid Home. Because plans had been made to provide financial assistance for residents as they became unable to pay their own way, and because volunteers and donations help to reduce the cost of care and extend residents’ ability to stay out of institutions, Ballard Creek is a charitable use of the land and the property tax exemption is appropriate. Madrid Home for the Aging v. Story County, November 10, 1999.

Assisted-Living Facilities Prove To Be Financial Winners


The latest darlings of Wall Street seem like an unlikely industry. According to an article in the Wall Street Journal last week, one of the hottest new financial developments is companies which run assisted-living centers.

In the past year, several companies in the assisted-living business have “gone public,” offering stock for the first time. Now, according to the Wall Street Journal article, early results indicate that the businesses have done very well for themselves.

Among the companies singled out by the Journal as recent winners is the Forum Group, which has seen a 47.2% increase in its share price so far this year. Another standout is Emeritus, which has increased by 67.7% in the same time period.

Why is this industry singled out for such gains? Analysts suggest that there are several reasons for the recent growth in the industry, and that those same reasons predict continued growth. Increasingly, assisted living centers are used as alternatives to nursing home care, at a significantly lower cost.

Average national costs in assisted living centers tend to run in the $55-to-$60-per-day range, while nursing home costs are typically $80 to $90 per day. Given strained government and personal budgets, those savings not only look attractive today, but are likely to be even more attractive in the future.

Most states also make building assisted living centers easier than nursing homes. While certificates of need may restrict the number of new nursing home beds, there may not be such limitations on assisted living facilities. And nationally, most assisted living facilities reach 95% occupancy within 15 months of opening.

Nursing home beds are not increasing as rapidly as assisted-care facilities. Furthermore, the available nursing home beds are increasingly occupied by acute-care patients who have been eased out of hospitals by managed care, DRGs and other trends in health care. These trends have helped fuel the growth in the assisted-living industry.

Most of the principal players in the development of assisted living centers are small, recent start-ups. As a result, they have not yet proven to be very profitable businesses. Most of their income for the near future will be expended on start-up and construction costs, so they may not collectively be profitable for some time to come.

Still, even though the companies have not yet made substantial profits, investors have. In addition to The Forum Group and Emeritus, the Wall Street Journal article singled out Sterling House (which posted a 75.4% gain in share prices so far this year), Assisted Living Concepts (with a 39% gain in price) and ARV Assisted Living (38.3%). One company, Just Like Home, actually posted an 11.1% decrease in share price so far this year.

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