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Most people have conducted some level of estate planning at
some point in their lives. Estate planning typically
involves a plan for distribution of one’s assets during life
and at death. Estate planning for elders is a bit more
complicated due to the natural changes that aging brings,
and requires consideration of potential changes in mental or
physical condition. In addition to a Will, effective
planning requires that you appoint someone to act on your
behalf if you become incapacitated. This is achieved with a
Durable Power of Attorney (for finances) and a Health Care
Proxy (for health care). These documents grant your agent
the authority to make decisions on your behalf if you are
ever unable to speak for yourself. It is important that you
execute these important documents while you are competent to
ensure that your wishes are upheld. These documents may
also help to avoid the necessity for costly guardianship
proceedings in the probate court in the future if you become
incapacitated. Following is a brief summary of these
essential documents.
DURABLE POWER OF ATTORNEY
A Durable Power of Attorney grants your Agent the authority
to act on your behalf in financial and related matters. A
Power of Attorney is not sufficient for elder law purposes
unless it is Durable, which means it remains effective after
the principal becomes incapacitated. The Durable Power of
Attorney must be comprehensive, enumerating many specific
powers. (If you have a Durable Power of Attorney that is
only a page or two long, it is probably not sufficient for
many common issues elders face.) There are specific clauses
that must be included in order to be effective for many
common situations that elders face. A qualified Elder Law
Attorney will be able to discuss these with you and ensure
that your Durable Power of Attorney will be honored by third
parties (banks, brokerage companies, the Internal Revenue
Service, etc.).
The most common Durable Powers of Attorney grant the Agent
the right to act immediately, but they can also be drafted
to grant “springing” powers to your Agent. A Durable Power
of Attorney with springing powers will grant your Agent
authority to act only after one or two physicians certify
your inability to act on your own behalf. Unfortunately,
third parties are often more cautious in dealing with
documents with springing powers, so your Agent may have
difficulty acting on your behalf with a springing Durable
Power of Attorney.
It is important that you trust your Agent completely, and
you should understand that your Agent has a legal duty to
act in your best interests. If you are uncomfortable with
granting immediate authority, however, there is another
option. You may execute a Durable Power of Attorney that
grants your Agent immediate powers to act on your behalf,
but have your attorney hold the documents in “escrow” until
your Agent presents proof of your incapacity. This avoids
the heightened scrutiny from banks and other institutions,
but affords you the added comfort and security you desire.
HEALTH CARE PROXY
A Health Care Proxy grants your Agent authority to make
health care decisions on your behalf, but only after you
have been deemed incapable of making or communicating
decisions for yourself. It is a springing power by
definition. It is important that you discuss your wishes
with your Agent so that they may communicate your wishes if
you are not able to. Unlike a Durable Power of Attorney,
your health care Agent should make decisions that you would
make if you were able, rather than decisions that he or she
thinks are best. Your Agent can only fulfill this duty,
however, if you take the time to inform them of your wishes.
In addition, because your Health Care Proxy is a “springing”
document, your document should include a clause granting
your Agent immediate authority to act on your behalf under
HIPAA (Health Insurance Portability and Accountability
Act). HIPAA was enacted to give individuals greater
protection over their medical records, but there may be
circumstances in which you need your Agent to assist you
regarding your medical records before your Health Care Proxy
springs into effect.
LIVING WILLS
Although Living Wills are not enforceable in Massachusetts,
it is still recommended that you execute one as a written
expression of your wishes regarding artificial feeding or
respiration, invasive surgery, etc. If there is ever a
dispute about your care in the future, the Court can rely on
your Living Will as evidence of what you would want.
(Remember the recent case of Terry Schiavo … her husband
and her parents disagreed as to whether she would want to be
artificially sustained. If she had executed a Living Will,
the court could have relied on it to determine what she
would have wanted.)
LAST WILL & TESTAMENT
Your Will designates who the beneficiaries of your estate
will be.
If
you and your spouse have “Sweetheart” Wills (each of you
leaves everything to your beloved spouse …), consider
drafting new Wills which could protect your assets if one of
you requires nursing home care. There are strategies you
can employ that will ensure that your spouse benefits from
your estate if you predecease him or her, without leaving
your estate vulnerable to the cost of nursing home care. In
addition, if you have a disabled child you will want to make
specific provisions in your Will to provide for that child
without causing a disqualification from any public benefits
he or she is entitled to.
So, dust off that old estate plan and give it a fresh look
since your situation has probably changed significantly
since you last reviewed it. If you have never done any
estate planning documents, now is the time. Take greater
control of your future by scheduling a Legal Check Up today.
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