Estate Planning for Life

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					        Estate Planning for Life
              Buckley Fricker, J.D. GCM
                 buckley@buckleys4seniors.com

             The Fairfax County Bar has a section on Elder Law.
          www.fairfaxbar.org 703-246-2084
   The National Academy of Elder Law Attorneys is based here near Tyson’s
                                  Corner.

           www.naela.org 703-942-5711
The information in this packet is for educational purposes and is not meant

                  to provide “legal advice” to any reader.

                                                                            1
                              Types
• Power of Attorney
     – Durable, or Not Durable
         • General/Financial or Limited
• Advance Medical Directive (AMD)
  combines:
  Health Care Power of Attorney
  and Living Will
• Do Not Resuscitate Order (DNR)
•   (There is a push to rename a DNR as AND – “Allow Natural Death)
                                                                      2
                What If . . .
• Imagine you have a stroke, and for a few months
  you cannot speak, and you never regain the
  ability to walk.
• In 2010, you can live for years this way, maybe
  longer.
• Who will speak for you? Who will walk to the
  store and the post office for you?
• Who will manage to pay your bills, your taxes,
  and decide where you will live, what therapies
  you get and which care company changes your
  diapers and bathes you…

                                                3
             In The Past . . .
• In the “olden days” if you did become
  incapacitated, your family took care of you in
  some way, or you lived as an invalid under some
  charitable program, if there was one.
• (Picture the Old West for instance, or life during
  the Industrial Revolution.)
• Somehow, those who were old and sick and
  disabled were cared for, or not, until they passed
  away.

                                                   4
             A New Need . . .
• There was no need to designate a person to
  decide your financial and health decisions when
  there was no such thing as living in a vegetative
  state, or living for years with Alzheimer's.
• People just did not live that long, and we did not
  have the medical machinery to keep us alive, at
  least for very long, through incapacitation.
• Estate Planning for “life” became a “new age”
  necessity by the 1980’s.

                                                       5
    Who Comes In Contact With These Documents?

•   Financial Planners
•   Care Managers
•   Social Workers
•   Attorneys
•   Health Care Providers
•   People with Elderly Parents
•   People with Special Needs Children
•   EVERYONE!
                                                 6
     The Statutory “Fall Back”
• Please note that without executing a Financial
  Power of Attorney, a person who becomes
  mentally incapacitated will have to go through a
  court process to have a Conservator named by
  the court to act on their behalf for all financial
  decisions and obligations.
• Without an Advanced Medical Directive naming
  a Health care Power of Attorney, a Guardian will
  have to be named by the court to make any
  medically or health care related decisions.
                                                       7
         Guardian/Conservator
• The court can appoint the same person to be both
  Guardian and Conservator. A suitable family member
  will be sought out, and if none is available, a local lawyer
  will probably be appointed.



• Quite simply this means that if you do not take the time
  to choose WHO will have complete and utter control over
  you if you have a stroke, develop dementia or have a
  brain injury, a Judge will choose that person for you.
  (Scary huh?)

                                                             8
       Power of Attorney (POA)
• Technically, an person who is an Agent/Attorney in Fact
  is given a “Power of Attorney,” (the power to act legally).
  The POA is a document.
• However, it is easier and widely accepted to refer to the
  “agent” as the Power of Attorney for financial POAs, or
  Healthcare Power of Attorney for HPOAs.
• I will use “POA” and “HPOA” as nouns referring to the
  individual who is the Agent/Attorney in Fact, as well as
  the name of the document.



                                                            9
                         POA
• A Power of Attorney is an authorization to act on
  someone else's behalf - “stand in his shoes” - in a legal
  or business matter.
• Imagine way back in history. A business owner needed
  to be able to send an Agent on a ship far away to place
  an order for goods. That Agent needed a legally binding
  document to persuade the seller that he had authority to
  act for his boss, hence a Power of Attorney document.
• This type is called a “common law” POA.
• It became invalid upon the Principal’s
  death or incapacity.
• Modern POAs become invalid only at death.
                                                          10
                    POA
• The Grantor of the power, who is called
  the Principal, gives another person (the
  Agent or Attorney in Fact - the POA) a
  legal right to act on the principal’s behalf.
• There can be multiple originals of a POA
  (unlike for a Will).



                                                  11
                 Example
• Having 2 originals of the Power of Attorney
  document can be handy, for instance:
• Your POA buys property in your name. The
  POA document must be filed with the deed at
  the Courthouse. The Courthouse can take a
  long time to get the original back you.
• In the meantime your POA needs to open an
  account in your name and a bank wants to see
  an original document.

                                                 12
           Successor and Joint
• It is a good idea to name a back-up POA or HPOA. The
  document can say “If Jane Doe does not act, I appoint
  John Doe.”
• That way if one POA or HPOA is out of town or not
  reachable, the other person can make decisions.
• Alternatively, a Principal (person granting the authority)
  can require that two or more people act together or
  “jointly” for all decisions. (This can lead to arguments,
  but can be a good idea depending on the circumstances
  – discuss with your family and your attorney.)



                                                           13
                         POA
   The POA can do such things as:

• Sign your checks
• Agree to pay for new services for you from your funds
  (such as agree to pay the bill for an Assisted Living
  Facility or a new wheelchair).
• Open a new bank account and transfer funds for you.
• Possibly “make gifts” (although this requires specific
  language and could affect Medicaid planning for LTC
  and annual allowable gifts under tax laws).
• POAs cannot give gifts to themselves or “self deal”
  without explicit authorization in the POA document.
                                                           14
        Limited or Special POA
• POA documents can have narrow language -
  such as granting a POA legal authority for the
  sole purpose of signing closing documents on a
  property sale.


• Ex: John Smith is buying real property here but he lives
  overseas. He doesn’t want to fly over here just to sign
  the closing documents, so he grants a POA to Mary
  Jones, a local, to sign the closing documents for him.
• She would sign: John Smith, by Mary Jones Attorney in
  Fact.
                                                             15
            Durable POAs
 Because of the length of the signature, POA’s
 who need to sign checks frequently might
 choose to order checks in the account owner’s
 name and their name as POA so they can just
 sign their name.
Today, most financial POA documents are
 1. Durable (survive incapacity)
 2. General (not limited)
 3. Effective Immediately (not “springing”)
                                                 16
        When Does the POA
           Take Effect?
Most are effective immediately because 3rd parties like
banks need to be able to rely on them immediately without
proof you are incapacitated. A “springing” POA does not
become effective UNTIL you become incapacitated (as
discussed below).
   •What if your POA decides to clean out your bank
   accounts?
   •If your POA robs you, presumably, you would notice,
   revoke the POA, and press charges/sue them.

This is why you must choose someone Trustworthy!
                                                      17
                      Example
• The POA has a legal fiduciary duty to act on your behalf
  and can be held liable in court for violating that
  obligation. Choose someone you trust and preferably a
  back-up successor as well, in case something happens
  to your first choice. Most family member POAs are
  usually not paid, but payment of a fee for this service can
  be provided for in the document. Payment of POAs is a
  growing trend. It must be worded correctly in the
  document or the POA won’t be able to pay themselves
  (Self-Dealing!)



                                                           18
                Springing POA
• A POA (or HPOA) can also be what is called
  “Springing”, which means the document has a clause in
  it saying that it does not become effective until you are
  deemed to be incapacitated by some explicitly stated
  means. (Such as: 2 doctors verify in writing that you are
  not competent). One problem is this defeats the purpose
  of using a POA to avoid the uncomfortable “process” by
  which you are proven incapable of handling your own
  affairs, like what happens in a Guardian/Conservator
  court process!



                                                          19
 Uniform Power of Attorney Act
• Virginia has adopted the Uniform Power of
  Attorney Act (one of 48 states, plus the Virgin
  Islands) proposed in 2006 by the National
  Conference of Commissioners on Uniform State
  Laws.
• While the Uniform Power of Attorney Act
  (UPOAA) substantially clarifies Virginia law
  related to Durable Powers of Attorney (DPAs), it
  also makes several key changes to the law. A
  few key points are the following:
                                                 20
                   UPOAA
• All powers of attorney are presumed durable
  (survive the incapacity of the Grantor) unless
  stated otherwise in the document.
• The UPOAA provides protections for third
  parties who in good faith accept a purportedly
  acknowledged (signed with the correct witness
  and notary requirements) power of attorney.




                                                   21
                 UPOAA
• The UPOAA provides sanctions against
  third parties for their unreasonable
  refusals of POAs.
• The UPOAA identifies certain powers
  (e.g., gifting and changing designations of
  beneficiary) that must be specifically
  granted.


                                            22
                  Example
Cinderella’s Dad is alive and well. He is 85 and
  planning ahead. He grants a durable, general,
  financial POA to Cinderella. He can still act on
  his own behalf. Although he still pays some of
  his bills, he finds it tiring, so he often passes
  them on to Cinderella and she pays some of
  them from his bank account. Cinderella prefers
  online bill paying, so she sets up his online
  account, pays some bills that way, while he still
  writes paper checks.

                                                  23
            Time Passes. . .
• Cinderella’s Dad is now nearing 90 years old.
  He has developed Alzheimer’s disease.
  Cinderella, as his POA, is now responsible for
  handling all of his finances and assets. The
  transition was smooth because of the Power of
  Attorney document, and there is no need for a
  court hearing to appoint Cinderella or anyone
  else as the Conservator. She has had the
  stand-by power all this time.

                                                   24
            Bank Accounts
• When a person is appointed as a POA,
  they should take the document to the
  bank, or banks where the Grantor’s
  accounts are held. Each bank has a
  process by which they “approve” the
  appointment, which paves the way to set
  up online banking or order checks, either
  at that time or in the future.

                                              25
               In Addition
• Some Banks and Most Brokerage Firms
  have their own Power of Attorney forms.
• In addition to the POA you sign that an
  attorney draws up, which will likely
  authorize your Agent to act on your behalf
  in all financial matters, be sure to inquire
  with your financial planner or broker as to
  whether they have additional forms.

                                             26
   Medical Advance Directives
The three legally binding documents that
  pertain to your health are:
1. Health Care Power of Attorney (HPOA)
  (always “durable.”)
2. Living Will
  HPOA and Living Will can be combined in a
 single Advance Medical Directive (AMD).
3. Do Not Resuscitate Order (DNR)
                                              27
Health Care Power of Attorney (HPOA)

• Similar to when a person appoints another
  person to be their Financial Power of
  Attorney, one can also appoint another
  person to be their Health Care Power of
  Attorney.
• Most people appoint family members or
  close friends, although you can appoint
  anyone you feel can follow through on
  your medical directive if you are unable.
                                          28
             Health Care POA
• A Durable Health Care Power of Attorney document is
  used when/if the Principal cannot communicate an
  informed decision on their own. (Either physically cannot
  speak or write, or is mentally unable to communicate a
  competent wish or desire).
• An HPOA usually states that if an attending doctor and
  one other doctor or licensed psychologist deems a
  person unable to communicate an informed decision,
  they will follow the direction of the HPOA.
• (So, you do not need to have a court hearing stating you
  lack capacity to make decisions.)



                                                          29
                 HPOA
Depending on a specific State’s rules:
• The document can be narrow or Limited,
  such as granting a HPOA just for a single
  event - such as while you are in surgery.
• It can be broad, such as deciding any and
  all “health-related” decisions for you,
  including signing a Do Not Resuscitate
  Order (discussed below).


                                          30
                 HPOA
• Recently some states (including Virginia)
  have broadened the application of
  directives from “Medical” to “Health Care”
  to make sure an HPOA can make
  decisions about such things as admission
  to Assisted Living or Nursing Home
  Facilities and who can visit a patient.
  These were not seen as being “Medical”
  per se, but needed to be included.
                                          31
                     HPOA
• Currently the default position is that a HPOA
  cannot restrict who may visit a patient in a health
  care facility unless the HPOA document
  specifically grants that right to the HPOA agent.



• Additionally, absent an HPOA document, if the
  facility has to go by the state’s statutory default
  for who gets to be the HPOA, that person cannot
  restrict who may visit.
                                                   32
                 HPOA
• It is crucial to discuss your desires with
  your HPOA. They are supposed to be
  acting for you, as you would act yourself,
  and not insert their own wishes.
• The HPOA cannot do this job if they don’t
  know your wishes.



                                           33
              EXAMPLE
• Cinderella’s Dad appoints her as HPOA
  when he is 85 and feeling fine.
• He decides to go jet skiing at the local
  inlet. While doing so he collides with
  another jet skier and is taken to the
  hospital unconscious.



                                             34
                   HPOA
• Cinderella’s Dad needs surgery. There
  are pros and cons regarding the treatment
  options. One is to amputate the leg;
  another is to try to save it. Both have risks
  and repercussions and someone needs to
  make a decision. Dad is unconscious and
  unable to make this decision, so it falls on
  Cinderella, the HPOA.

                                              35
  Communication is Everything
• Lucky for Cinderella, her Dad had talked
  about the “What Ifs” with her.
• He said that being active is so important to
  him, that he would rather have a shorter
  life than an in-active one.
• Therefore, Cinderella directs the doctors to
  keep the leg, even though that treatment
  method could result in more complications
  leading to death.
                                            36
                    HPOA
• As Dad nears 90 and develops Alzheimer’s
  disease, he cannot live alone. Cinderella can,
  for instance, decide to admit him to an Assisted
  Living Facility, or hire the necessary medical
  assistance for him to remain at home.
• She can decide many things regarding her
  Dad’s health care, such as which medical
  treatments and therapies to try.


                                                     37
                     HPOA
• As Dad nears death, Cinderella recalls he did
  not want to be kept alive artificially.
• Cinderella directs medical personnel NOT to
  administer artificial fluids and nutrition to her
  father, for she is obligated to follow his wishes.
  He will receive “comfort care”.
• If Dad has a Living Will, that document will direct
  the Doctor outright, and the HPOA doesn’t have
  to actually make this decision. See below.

                                                    38
                    Living Will
• A Living Will has nothing to do with a regular “Will” and
  it is NOT a Living Trust or Pour Over Will.
  ~~Don’t confuse the identity of the Living
  Will!~~
• A Living Will, is an advance directive, a decision
  made in advance. It is a legal document that a
  person signs in order to express to medical
  personnel what kind of treatment they do or do
  not want if treatment would only prolong the
  dying process.
                                                              39
               Living Will
• A Living Will got the name because just as
  with a regular Will where you direct what
  you want to be done with your belongings
  and property after you die, a Living Will
  directs what you want done with your
  “Self” while you are still Living.



                                           40
                Living Will
• These documents were not really
  accepted by the medical community until
  the 1990’s because they seemed to
  conflict with the Hippocratic Oath, to do no
  harm, i.e., do everything medically
  necessary to keep a person alive.
• At first, attorneys would have to threaten
  to sue doctors who refused to follow the
  directives that a patient had signed.

                                             41
                 Example
• Cinderella gets the news that Dad’s
  Alzheimer’s disease has progressed and
  he is unable to eat or drink. He will not
  live long unless he is given IV fluids and a
  feeding tube for nutrition.
• Dad’s Living Will says that he does not
  want artificial nutrition or fluids to be kept
  alive, and it also says he wants to be
  made as comfortable as possible until he
  dies.
                                               42
                             Example
• Cinderella should ensure that Dad is receiving:
• Palliative Care - “a form of medical care or
  treatment that concentrates on reducing the
  severity of disease symptoms, rather than
  striving to halt, delay, or reverse progression of
  the disease itself or provide a cure.” (Wikipedia)
• And/Or
• Comfort Care - getting the necessary pain
  medications to make his last few days/months
  as comfortable as possible. (Usually provided by Hospice
  Services at home or in a facility.)



                                                         43
                  Example
• Given the directions in Dad’s Living Will,
  Cinderella is legally not permitted to decide, as
  HPOA, that she wants to have the doctors keep
  Dad alive through artificial means because his
  Living Will states his wishes, and her HPOA:
  1. Does not trump the Living Will
  2. Her obligation as HPOA is to follow his
  wishes, which, even without a Living Will, he has
  hopefully communicated to her.

                                                  44
               IMPORTANT!
• As you can see, it is crucial to sit down and talk
  to your loved ones and/or HPOA about your
  wishes concerning your health care.
• To the extent reasonable, incorporate those
  wishes in your HPOA document.
• If you do not, your HPOA will be left to guess
  what you would have wanted, and that can
  cause an emotional burden.


                                                       45
     Do Not Resuscitate Order
• A DNR is used when a patient is near death in
  an emergency situation, usually from cardiac or
  respiratory arrest.
• This document can be obtained only from a
  doctor, not an attorney.
• This document is signed at a doctor’s office or
  in a hospital. It is printed on the same paper as
  Bonds to deter counterfeiters (e.g., greedy kids
  who want their inheritance as soon as possible!)


                                                  46
                       DNR
• People living in their own homes with an
  emergency DNR often place the DNR on their
  refrigerators. If an ambulance is called, the
  medical personnel will likely look there to see if
  CPR, electric heart shocks or other treatments
  should be started.

• A person may also opt to have a DNR bracelet.
• An HPOA can sign a DNR order for a person.

                                                       47
            The Five Wishes
• Virginia is a State in which you can use the Five
  Wishes document in lieu of an Advanced
  Medical Directive, but regardless of whether you
  choose an Advanced Medical Directive or the
  Five Wishes, the Five Wishes is an excellent
  platform to help you make decisions and talk
  about them with your family or HPOA.

• Go to http://www.agingwithdignity.org for
  more information.
                                                  48

				
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