Medicaid Benefits – House Transfer: Deed Does Not Conflict

Reservation of Power of Appointment in Deed Does Not Conflict With Conveyance of Property to Children

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A Massachusetts appeals court rules that as part of Medicaid planning, a woman could reserve a power of appointment in a deed conveying property to her children while reserving a life estate for herself. Skye v. Hession (Mass. App. Ct., No. 16-P-282, Apr. 28, 2017).

Margaret Hession sought legal assistance to protect her house in the event she might need Medicaid benefits. As part of the Medicaid planning, she executed a deed transferring her house to her children. The deed reserved a life estate for her and granted her a special power of appointment that allowed her to appoint the property to any person except herself, her creditors, her estate, or her estate’s creditors. Ms. Hession decided her daughter Deaven Skye should inherit less than her other children. She wrote a will that exercised her power of appointment and reduced Ms. Skye’s interest in the property from one-third to 5 percent.

After Ms. Hession died, Ms. Skye objected to the will and argued that the power of appointment was void. The trial court dismissed Ms. Skye’s objection and admitted the will to probate. Ms. Skye appealed, arguing that the provisions in the deed granting the remainder interests and reserving a power of appointment are irreconcilably repugnant to each other.

The Massachusetts Court of Appeals, rules that the reservation of the power of appointment is consistent with the other provisions of the deed. According to the court, “because of the reservation of the life estate, the deed conveyed not present possessory estates but rather remainder interests; and, because of the reservation of the power, the remainder interests were defined, in part, by this limitation.” The court specifically does not express a “view on the effect of the reserved power of appointment on [Ms. Hession’s] strategy of avoiding MassHealth look-back period regulations.”

READ THE TOP 8 MISTAKES IN MEDICAID PLANNING HERE>

A Medicaid Applicant’s Purchase of Life Insurance Policy Is Transfer for Less Than Market Value

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An Illinois appeals court rules that a Medicaid applicant’s purchase of a life insurance policy was a transfer for less than fair market value because the applicant did not receive any benefit from the policy. Moore v. State of Illinois (Ill. App. Ct., 4th Dist., No. 4-16-0414, April 11, 2017).

Nursing home resident Elda Buckley applied for Medicaid. On the same day, she purchased a whole life insurance policy for $15,000 that named Christine Moore as the beneficiary. The state approved Ms. Buckley’s Medicaid application, but it determined that the purchase of the life insurance policy was a transfer for less than fair market value and imposed a penalty period.

Ms. Buckley appealed, arguing that she purchased the life insurance policy for fair market value, so the transfer should not be subject to a penalty period. The state and the trial court affirmed the penalty period. Ms. Buckley appealed.

The Illinois Court of Appeal, 4th District, affirms, holding that the purchase of the life insurance policy was a transfer for less than fair market value because Ms. Buckley did not receive the benefit of the policy. According to the court, the “apparent purpose of [Ms.] Buckley’s purchase of the insurance policy, of which she would receive none of the proceeds, was to shelter assets from Medicaid while ensuring [Ms.] Moore received the benefits of her assets.”

For the full text of this decision, go to: http://www.illinoiscourts.gov/Opinions/AppellateCourt/2017/4thDistrict/4160414.pdf

 

READ THE TOP 8 MEDICAID PLANNING MISTAKES HERE>

A Brothers’ Dispute Over Mother’s Nursing Home Placement Is Not Domestic Violence

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A New Jersey appeals court rules that an ugly dispute between two brothers over their mother’s placement in a nursing home did not amount to domestic violence. R.G. v. R.G.(N.J. Super. Ct., App. Div., No. A-0945-15T3, March 14, 2017).

R.G was the attorney-in-fact and primary caregiver for his parents. After R.G.’s mother fell ill, R.G. wanted to place his mother in a nursing home. R.G’s brother objected to this plan, but R.G. went ahead and had his mother admitted to a nursing home without his brother’s consent. R.G.’s brother sent angry and threatening texts and emails to R.G. as well as emails expressing his desire to find a way to care for their parents in their home. Eventually the men got into a physical altercation in which R.G.’s brother shoved R.G.

R.G. filed for a restraining order against his brother under the Prevention of Domestic Violence Act. The trial judge ruled that R.G. was harassed and assaulted and issued the restraining order. R.G.’s brother appealed, arguing that R.G. did not meet the definition of a victim of domestic violence.

The New Jersey Superior Court, Appellate Division, reverses, holding that R.G.’s brother’s actions did not amount to domestic violence. The court finds that there was insufficient evidence that R.G.’s brother purposely acted to harass R.G., ruling that “a mere expression of anger between persons in a requisite relationship is not an act of harassment.”

For the full text of this decision, go to: http://www.judiciary.state.nj.us/opinions/a0945-15.pdf

 

Elder Abuse is a National Epidemic

Via Huffington Post…

When Helping Hurts

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Elder abuse is a national epidemic. Each year in the United States, an estimated 10 percent of older Americans are injured physically, debilitated emotionally, exploited financially and/or neglected — often by an adult child, spouse, other relative or caregiver. Elder abuse victims have a three-fold risk of death compared to their non-abused counterparts. Frequently, an elder is isolated, their mistreatment hidden.

In 2006, newspapers around the country headlined the story that Brooke Astor, the legendary New York City philanthropist and socialite, was financially exploited and neglected by her son and attorney. The case attracted national attention as her grandson, with the help of others, sought elder justice – first, by petitioning for guardianship to help his grandmother and those who were (also) helping her, and second, to help bring some of her perpetrators (his father included) to justice. The Elder Abuse Unit of the New York County’s District Attorney’s Office indicted and convicted Brooke Astor’s son and attorney. Elder justice was realized.

That is rare. Most of the millions of elder abuse victims, their suffering shrouded in silence, do not receive justice. Only one in 24 elder abuse cases are reported to authorities. What is not rare is that, despite an almost total lack of support or resources, family, friends and neighbors step up to help. Yet helping hurts, as confirmed by new findings of our research.

 

Staggering Number Know About Elder Mistreatment, Assist Victims, and Feel Distress

Along with colleagues at Cornell University, University of Toronto and Purdue University, we utilized Cornell University’s Survey Research Institute’s omnibus survey to learn about these concerned persons who step up for elder abuse victims — a population that had never been assessed. The survey results were recently released in The Gerontologist. They show that when findings are extended to the general population (U.S. Census Bureau, 2016), approximately 73 million adult Americans have had personal knowledge of a victim of elder mistreatment. Further, approximately 44 million adult Americans have become involved in helping an elder abuse victim. And for over 32 million adult Americans, just knowing about an elder abuse situation is generally highly stressful. Actually providing help to the victim tends to intensify this personal distress.

We need more research to understand what specific aspects cause this distress. We do know from conversations with concerned persons that the path to assisting elder abuse victims is often fraught with challenges. Concerned persons may witness the decline in the victim’s health and seek to obtain medical care, or provide what care they can themselves. They might feverishly focus efforts on trying to stop a financial exploiter from completely emptying bank accounts. They may try to lessen the victim’s despair. Often, they are often the only ones standing between the victim and the abuser, preventing the victim from slipping into total isolation.

Yet they are usually wholly unprepared for how this intervention might take a toll on they themselves. Relationships with friends they confide in and family may become strained, sometimes to the breaking point. They may suffer financial consequences. And seeing or confronting an abuser can be dangerous, so they personally risk becoming the target of abuse. Intervening can take real courage, and even more to remain involved. And it requires time, as elder abuse cases tend not to resolve quickly. It is not surprising that concerned persons can experience anguish, frustration and trauma. Yet like the victims they help, they are largely invisible: their deeds often not recognized, their needs unacknowledged.

 

Communities Can Help

What can communities do? A new program to be launched this spring in New York City is a beginning. The New York City Elder Abuse Center is launching a pilot helpline for concerned persons assisting elder mistreatment victims residing in New York City. Funded in part by the Fan Fox & Leslie R. Samuels Foundation, it will provide information, referrals and support. This is an important first step, but the need is great. Programs must be developed for concerned persons — and elder abuse victims — in every community. This will require support from foundations, private philanthropists, businesses and government. Brooke Astor fervently believed in a collectively expressed philanthropy, a

Elder abuse is a national epidemic. Each year in the United States, an estimated 10 percent of older Americans are injured physically, debilitated emotionally, exploited financially and/or neglected — often by an adult child, spouse, other relative or caregiver. Elder abuse victims have a three-fold risk of death compared to their non-abused counterparts. Frequently, an elder is isolated, their mistreatment hidden.

In 2006, newspapers around the country headlined the story that Brooke Astor, the legendary New York City philanthropist and socialite, was financially exploited and neglected by her son and attorney. The case attracted national attention as her grandson, with the help of others, sought elder justice – first, by petitioning for guardianship to help his grandmother and those who were (also) helping her, and second, to help bring some of her perpetrators (his father included) to justice. The Elder Abuse Unit of the New York County’s District Attorney’s Office indicted and convicted Brooke Astor’s son and attorney. Elder justice was realized.

That is rare. Most of the millions of elder abuse victims, their suffering shrouded in silence, do not receive justice. Only one in 24 elder abuse cases are reported to authorities. What is not rare is that, despite an almost total lack of support or resources, family, friends and neighbors step up to help. Yet helping hurts, as confirmed by new findings of our research.

 

5 Great Tax Deductions and Credits for Retirees

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Via Tina Orem, Nerdwallet

They say that with age comes wisdom. But with age also come a few tax perks.

Once your birthday cake has 50 candles on it, the IRS starts to lighten up a bit. And when you hit 65, the IRS has a few more small presents for you — if you know where to look. Here are five tax deductions and credits you don’t want to miss after you’ve blown out all those candles.

1. A higher standard deduction

If you take the standard deduction instead of itemizing (learn how to decide here), you get a bonus of up to $1,500 if you or your spouse is 65 or older.

Filing status Regular standard deduction Standard deduction, age 65+
Single $6,300 $7,850
Married, filing jointly $12,600 $13,850
Married, filing separately $6,300 $7,550
Head of household $9,300 $10,800

If you or your spouse is legally blind, your standard deduction can increase an additional $1,250.

2. More room to shelter income

Because contributions to a 401(k) are tax-advantaged, the IRS limits how much you can contribute each year. For folks under 50, that limit is $18,000. If you’re over 50, though, you can put in $24,000 per year.

But alas, that assumes that you’re still working and that your employer offers a 401(k) plan.

If you’ve already kissed your cubicle goodbye, you may still be able to contribute an extra $1,000 a year to a traditional IRA or a Roth IRA, if you qualify for a Roth. That’s thanks to the IRS’ catch-up provision for people 50 and older. And remember, you can put money into a traditional IRA until the year you reach age 70½; there’s no age limit on Roth IRA contributions.

» MORE: Traditional IRAs vs. Roth IRAs

3. A bigger deduction for medical expenses

If you itemize, you can deduct unreimbursed medical expenses — but only the amount that exceeds 10% of your adjusted gross income. For example, if your adjusted gross income is $40,000, the threshold is $4,000, meaning that if you rang up $10,000 in medical bills, you could deduct $6,000 of it.

If you or your spouse is 65 or older, however, that 10% threshold dips to 7.5% for the 2016 tax year — netting you a bigger deduction. So for that hypothetical $10,000 in medical bills, that means you could deduct $7,000 instead of $6,000. (Beware, though: the threshold is set to rise to 10% in 2017 unless Congress takes action.)

And if you’ve recently purchased long-term care insurance, you may be able to add in $380 to $4,750 of the premiums, depending on your age (the older you are, the more you can deduct).

One important note: Seniors only get this deal for the 2016 tax year. Starting with the 2017 tax year, the threshold is 10% for everyone.

4. A safety net for selling that empty nest

This tax deduction is available to everyone regardless of age, but it’s especially useful if you’re itching to sell your house and downsize in retirement. The IRS lets you exclude from your income up to $250,000 of capital gains on the sale of your house. That’s if you’re single; the exclusion rises to $500,000 if you’re married.

So, if you bought that four-bedroom ranch house back in 1974 for $100,000 and sold it for $350,000 today, you likely won’t have to share any of that gain with Uncle Sam. There are a few conditions, though:

  • The house has to have been your primary residence.
  • You must have owned it for at least two years.
  • You have to have lived in the house for two of the five years before the sale, although the period of occupancy doesn’t have to be consecutive.
  • You haven’t excluded a capital gain from a home sale in the past two years.

5. More help if you’re disabled

You may qualify for a $3,750 to $5,000 tax credit, depending on your filing status, if you or your spouse retired on permanent and total disability. The credit, called the Credit for the Elderly or the Disabled, goes up to $7,500 if you’re 65 or older.

But be prepared for this one to give you a few gray hairs. First, few people qualify for the credit; most of the time, your Social Security benefits will cause you to exceed the income limits. And if you lived with your spouse during the year, you have to file jointly. Plus, the tax credit is nonrefundable, which means that if you owe $250 in taxes but qualify for a $5,000 credit, you won’t get a check from the IRS for $4,750. But at least you’ll get to enjoy a $0 tax bill.

Tina Orem is a staff writer at NerdWallet, a personal finance website.

“My mom is in a nursing home and I noticed some bruises and sores. I think they are bedsores—what should I do?”

Bedsores are often a sign of neglect and sometimes a sign of abuse. The first thing you should do is speak to a nurse on duty and begin to remedy the situation. Be aware that the nurse may not have a full understanding of these injuries and you will likely need the attention of a wound care specialist and medical doctor. If you have a cell phone take some pictures of the wound for documentation. Bedsores and Pressure Sores, also known as Decubitus Ulcers can progress quickly and can be deadly. They occur when someone is immobile and there is not adequate blood flow. Then the affected tissue dies and an ulcerated sore develops. In a nursing home, hospital or other care facility it is their responsibility to check and turn the patient regularly. There are laws in place that protect patients and you should know that these injuries are not the fault of the patient. The patient is the victim. If a loved one you know is suffering they may have a significant, financially rewarding lawsuit. Read more about this on our website, http://www.RaphanLaw.com.

As an Elder Law firm we see these cases often. Whether malpractice, abuse or neglect it is simply unjust for it to happen to an innocent victim. Do not put off addressing the issue. Call me for a free consultation (212-268-8200, 800-278-2960) or even to just guide you through the process of getting the proper medical and legal attention.

Visual Stages of Bedsores:

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Read our Frequently Asked Bedsore Lawsuit Questions here>

By Brian A. Raphan, Esq.

Steps to Prevent a Contested Will

Emotions can run high at the death of a family member. If a family member is unhappy with the amount they received (or didn’t receive) under a Will, a Will contest may ensue. 

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Generally, only a person’s closest heirs, or “distributees” are able to contest a Will. Will contests can drag out for years, keeping all the beneficiaries from getting what they are entitled to. It may be impossible to prevent heirs from fighting over your Will entirely, but there are steps you can take to try to minimize squabbles and ensure your intentions are carried out.

Your Will can be contested if an heir believes you did not have the requisite mental capacity to execute the Will, someone exerted undue influence over you, someone committed fraud, or the Will was not executed properly.

The following are some steps that may make a will contest less likely to succeed:

  • Make sure your Will is properly executed. The best way to do this is to have an experienced elder law or estate planning attorney assist you in drafting and executing the will. Wills need to be signed and witnessed, usually by two independent witnesses.
  • Explain your decision. If family members understand the reasoning behind the decisions in your Will, they may be less likely to contest the Will. It is a good idea to talk to family members at the time you draft the will and explain why someone is getting left out of the Will or getting a reduced share. If you don’t discuss it in person, state the reason in the Will. You may also want to include a letter with the Will.
  • Use a no-contest clause. One of the most effective ways of preventing a challenge to your Will is to include a no-contest clause (also called an “in terrorem clause”) in the will. This will only work if you are willing to leave something of value to the potentially disgruntled family member. A no-contest clause provides that if an heir challenges the Will and loses, then he or she will get nothing. You must leave the heir enough so that a challenge is not worth the risk of losing the inheritance.
  • Prove competency. One common way of challenging a Will is to argue that the deceased family member was not mentally competent at the time he or she signed the Will. You can try to avoid this by making sure the attorney drafting the Will tests you for competency. This could involve seeing a doctor or answering a series of questions.
  • Remove the appearance of undue influence. Another common method of challenging a Will is to argue that someone exerted undue influence over the deceased family member. For example, if you are planning on leaving everything to your daughter who is also your primary caregiver, your other children may argue that your daughter took advantage of her position to influence you. To avoid the appearance of undue influence, do not involve any family members who are inheriting under your Will in drafting your will. Family members should not be present when you discuss the Will with your attorney or when you sign it. To be totally safe, family members shouldn’t even drive you to the attorney’s office.

Bear in mind that some of these strategies may not be advisable in certain states and certain situations. Feel free to talk to me about the best strategy for you.

(For more information on Wills click here.)

Regards,

Brian A. Raphan, Esq.

Nursing Home Cannot Sue Resident’s Daughter Who Signed Admission Agreement

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A North Carolina appeals court dismisses a breach of contract lawsuit against a nursing home resident’s daughter even though the daughter signed the admission agreement because the resident was named as representative in the agreement. Wrightsville Health Holdings, LLC v. Buckner (N.C. Ct. App., No. COA16-726, Feb. 21, 2017).

When Sharon Buckner entered a nursing home, her daughter, Melissa, signed the admission agreement on her behalf. The agreement stated that Sharon was the “resident” and the “representative,” but Melissa signed the agreement and initialed the portion stating that the representative agreed to personally guarantee payment in the event the resident’s Medicaid application was denied. The nursing home demanded that Melissa pay Sharon’s unpaid bill.

After Melissa refused to pay, the nursing home sued her for breach of contract. Melissa filed a motion to dismiss, and the trial court granted the motion. The nursing home appealed.

The North Carolina Court of Appeals affirms, holding that Melissa was not liable for breach of contract. The court rules that because Sharon is named as resident and representative under the admission agreement, Melissa’s signature at the bottom of the document “must be read as” Melissa signing on behalf of Sharon and “her signature and initials on the document merely obligated her mother to comply with the terms of the Admission Agreement.”

For the full text of this decision, go to: https://appellate.nccourts.org/opinions/?c=2&pdf=34960

For more about Nursing Home legal issues, click here.

Top 10 Elder Law decisions of 2016

Below, in chronological order, is ElderLawAnswers’ annual roundup of the top 10 elder law decisions for the year just ended, as measured by the number of “unique page views” of our summary of the case.

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1. Medicaid Applicant’s Irrevocable Trust Is an Available Resource Because Trustee Can Make Distributions

An Alabama appeals court rules that a Medicaid applicant’s special needs trust is an available resource because the trustee had discretion to make payments under the trust. Alabama Medicaid Agency v. Hardy (Ala. Civ. App., No. 2140565, Jan. 29, 2016). To read the full summary, click here.

2. Trust Is an Available Asset Because Trustees Have Discretion to Make Distributions

A New York appeals court rules that a Medicaid applicant’s trust is an available asset because the trustees have discretion to make distributions to her. In the Matter of Frances Flannery v. Zucker (N.Y. Sup. Ct., App. Div., 4th Dept., No. TP 15-01033, Feb. 11, 2016). To read the full summary, click here.

3. Medicaid Applicant Who Transferred Assets in Exchange for Promissory Note May Proceed with Suit Against State

A U.S. district court holds that a Medicaid applicant who was denied Medicaid benefits after transferring assets to her children in exchange for a promissory note may proceed with her claim against the state because Medicaid law confers a private right of action and the Eleventh Amendment does not bar the claim. Ansley v. Lake (U.S. Dist. Ct., W.D. Okla., No. CIV-14-1383-D, March 9, 2016). To read the full summary, click here.

4. Mass. Court Bridles at Allegations in Request for Reconsideration in Irrevocable Trust Case

In a strongly worded response to a Medicaid applicant’s request for reconsideration of an unsuccessful appeal involving an irrevocable trust, a Massachusetts trial court strikes the applicant’s pleadings after it takes great exception to the tone of the argument.  Daley v. Sudders (Mass.Super.Ct., No.15-CV-0188-D, March 28, 2016). To read the full summary, click here.

5. Caretaker Exception Denied Because Child Did Not Provide Continuous Care

A New Jersey appeals court determines that the caretaker child exception does not apply to a Medicaid applicant who transferred her house to her daughter because the daughter did not provide continuous care for the two years before the Medicaid applicant entered a nursing home. M.K. v. Division of Medical Assistance and Health Services (N.J. Super. Ct., App. Div., No. A-0790-14T3, May 13, 2016). To read the full summary, click here.

6. State Can Place Lien on Medicaid Recipient’s Life Estate After Recipient Dies

An Ohio appeals court rules that a deceased Medicaid recipient’s life estate does not extinguish at death for the purposes of Medicaid estate recovery, so the state may place a lien on the property. Phillips v. McCarthy (Ohio Ct. App., 12th Dist., No. CA2015-08-01, May 16, 2016). To read the full summary, click here.

7. Attorney Liable to Third-Party Beneficiary of Will for Legal Malpractice

Virginia’s highest court rules that an intended third-party beneficiary of a will may sue the attorney who drafted the will for legal malpractice. Thorsen v. Richmond Society for the Prevention of Cruelty to Animals (Va., No. 150528, June 2, 2016). To read the full summary, click here.

8. Nursing Home’s Fraudulent Transfer Claim Against Resident’s Sons Can Move Forward

A U.S. district court rules that a nursing home can proceed with its case against the sons of a resident who transferred the resident’s funds to themselves because the fraudulent transfer claim survived the resident’s death. Kindred Nursing Centers East, LLC v. Estate of Barbara Nyce (U.S. Dist. Ct., D. Vt., No. 5:16-cv-73, June 21, 2016). To read the full summary, click here.

9. Irrevocable Trust Is Available Asset Because Medicaid Applicant Retained Some Control

New Hampshire’s highest court rules that a Medicaid applicant’s irrevocable trust is an available asset even though the applicant was not a beneficiary of the trust because the applicant retained a degree of discretionary authority over the trust assets. Petition of Estate of Thea Braiterman (N.H., No. 2015-0395, July 12, 2016). To read the full summary, click here.

10. NY Court Rules that  Spouse’s Refusal to Contribute to Care Creates Implied Contract to Repay Benefits

A New York trial court enters judgment against a woman who refused to contribute to her spouse’s nursing home expenses, finding that because she had adequate resources to do so, an implied contract was created between her and the state entitling the state to repayment of Medicaid benefits it paid on the spouse’s behalf. Banks v. Gonzalez (N.Y. Sup. Ct., Pt. 5, No. 452318/15, Aug. 8, 2016). To read the full summary, click here.

Feel Free to contact me to see how any of these decisions may affect your personal situation.

-Brian A. Raphan, Esq. 

Make Reviewing Your Estate Plan One of Your New Year’s Resolutions

The beginning of a new year is a good time to take a look at your estate plan to make sure it is up to date. Less than half of people actually have any estate planning documents in place and many of those people may have outdated documents. Documents that were created when your children were born may need updating 20, 30, or 40 years later, after your family and financial situation have changed entirely.

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Estate planning is all about five essential documents. Here they are in order of importance:

1. The Durable Power of Attorney

The most important estate planning instrument for taking care of you and your family during life, as opposed to after death, is the durable power of attorney. This appoints one or more people you trust to step in and handle your finances and legal matters in the event of your incapacity, whether through illness, dementia, or an accident, and whether the incapacity is temporary or permanent. In the absence of a durable power of attorney, family members often must resort to going to court to be appointed conservator. This causes delay and expensive and unnecessary legal fees. It can also cause infighting by family members since you have not chosen who should step in.

While the concept of the durable power of attorney is simple – I appoint you as my agent for financial and legal matters in the event of incapacity – the devil, as always, is in the details. You have to make decisions about how many agents to appoint, whether to have alternates, whether to allow gifting, when the power of attorney should take effect, and whether to grant trust powers. I can help you with these details if you need me. More POA info on my website here.

2. Health Care Proxy

Like the durable power of attorney, a health care agent steps in for you to make health care decisions when and if you become incapacitated. Unlike a durable power of attorney, it only takes effect when a doctor determines that you are unable to make decisions yourself and you can only appoint one individual to serve at a time. This is so that there will be a single point-person in dealing with medical professionals and no possibility of disagreement or stalemate between co-health care agents. You can and should name one or more alternates to the principal agent.

The main problem with health care proxies is that agents often have no idea or only a vague idea of what decision the patient would make in a particular circumstance. This can be addressed in one or more of these ways: a medical directive, a conversation between the potential patient and the agent, and a number of available workbooks (see below).  A general medical directive can be included with the health care proxy that says either (1) pull the plug if I’m in a vegetative state or irreversible coma, (2) balance the potential benefit and discomfort of any proposed treatment, or (3) do whatever you can to keep me alive.

Part of the problem with giving guidance to one’s agent is that it’s hard to predict situations that may occur and treatments that may be available. A number of organizations have developed workbooks to provide more detailed guidance than simply “keep me alive at all costs” or “do nothing.” Check out: The Consumer’s Toolkit from the American Bar Association. Click here for a sample Health Care Proxy from my website.

3. HIPAA Release

In addition to a health care proxy, everyone needs a HIPAA release. The HIPAA law bars medical practitioners from releasing medical information to anyone, even to the spouse of a patient, without a release. You may well ask why a heath care proxy isn’t sufficient. There are a few answers: First, the health care proxy is “springing” in that it doesn’t get activated until or unless the patient is declared incapacitated. Second, while the health care proxy may only name one person at a time, you may well want a much broader group of people to communicate with medical providers. The agent may not always be available or may not be the first person on the scene.

All too often we have seen medical providers hide behind HIPAA to avoid having to deal with family members, sometimes to great harm to the patient. Especially in emergency situations, family members often have vital information about the patient, whether it’s the medications he is taking, allergies he may have, or his usual physical and mental health. HIPAA does not say that medical personnel cannot listen to this information, but it can be misconstrued in that fashion. It’s best to eliminate the whole issue by having a HIPAA release signed and available in case it’s ever needed.

4. Your Will

Your Will says who will get your stuff when you die and who will be in charge of paying your bills, filing your tax returns, gathering your stuff and distributing it according to your instructions.

But here’s the irony: although the will gets all the recognition and there’s a whole set of laws governing the so-called “probate” process, these days most assets pass outside of probate. What the will says does not apply in many situations, including: joint accounts that pass to the other joint owners, retirement plans and life insurance policies that go to designated beneficiaries, and property in trust that passes to the beneficiaries named in the trust document. Only what you own in your own name alone passes under the will. In addition, while the will requires a lot of formality – two witnesses and a notary all signing at the same time – these other forms of passing on property usually require only the signature of the owner, or sometimes simply filling out a form online.

That said, wills are important in terms of distributing your tangible personal property – stuff you can touch, such as furniture, jewelry, tools, clothing, boats, and cars. Your will appoints your executor or personal representative who is in charge of carrying out your wishes. This can be very important in avoiding squabbling among children. And your will can be used to appoint guardians for minor children. A will permits you to make charitable or other specific bequests. Finally your will can serve as a failsafe in case other means of passing on property fail.

5. Revocable Trust

The documents listed above may be enough, but you may also want a revocable trust, sometimes called a “living” trust. A trust is a construct under which one or more people, the trustees, manage property or investments for the benefit of one or more people, the beneficiaries. In a revocable trust, typically at the start the same person acts as the creator of the trust, the grantor or donor, as trustee and as beneficiary. Not much changes in their lives after they set up the trust. But it avoids probate by naming successor beneficiaries after the initial beneficiary passes away. While probate is not the worst thing that can happen to people, avoiding it can save heirs time and trouble.

But more importantly, a trust is a terrific tool for intervening in the event of incapacity. Financial institutions that are resistant to accepting durable powers of attorney appear to be more comfortable with trusts when a successor trustee is named. But it works even better when a parent names one or more adult children as co-trustees. The parent then does not give up any rights or autonomy, but permits the child to begin participating in financial management. Even if the child does nothing, he or she can view accounts and step in immediately if a problem arises. This can be especially important in the event of dementia or scams. Seniors are the primary victims of scams and having a trusted family member with access to accounts can help identify scams and permit intervention to limit their effect.

In addition to probate avoidance and incapacity protection, trusts are infinitely flexible in terms of how they are drafted. They can state any number of specifics on who receives property when, for instance, permitting its distribution over time to children and grandchildren. The options and opportunities for creativity are limitless

As you can see, most of these documents are about life not death. Of course, they’re still about planning for an unwanted event – incapacity of some sort. It’s like insurance to make sure that you and your family are taken care of if an unfortunate accident occurs.

Additional Estate Planning articles from my ElderLawNews blog>