Planning For Incapacity Or Disability
If you're working with a client concerned about their own well-being as they age, and wondering who will care for them if they can no longer take care of themselves, their fears can be lessened with the execution of proper estate documents.  Recently, an 82 year old woman came to our firm, accompanied by two young women who were her friends, but not related to her.  The elder woman was single, living alone and had never been married.  She didn't have any children or siblings, and her closest relative was a cousin out of state.  She had been receiving help from the two young friends informally, but as she aged she wanted a legally enforceable document expressing her wishes. 

The most important step that any person can take in planning for their future incapacity or illness is to have an attorney prepare an advance directive, health care power of attorney and durable general power of attorney.  Where loss of capacity is a concern, time is of the essence to execute these documents as quickly as possible.

A joint advance directive/health care power of attorney allows a client to provide explicit directions regarding their health care.  Through this document, your client appoints an "agent" or "attorney in fact" to stand in their shoes, so to speak, and make decisions on their behalf when they are no longer capable of communicating their own wishes.  The agent will have a duty to follow the instructions that are contained in the documents.   To overcome HIPAA privacy requirements, medical facilities and the staff will need to know that they are authorized to speak with an agent before sharing medical information with them; a properly drafted health care directive will provide the necessary consent.  It is important to remind your client to keep the health care power of attorney current; in our state of Virginia, the advance directive provides even more flexibility than was previously offered even two years ago. 

In addition to giving instructions as to medical care, the advance directive will also provide for your client's final wishes.   This includes whether a person wants their life extended by artificial means (i.e., life support), if a person wishes to be an organ donor, and other practical considerations. 

A durable general power of attorney is a similar document, which relates to financial decisions.   Again, a person will select an agent, or co-agents, to act on their behalf and make financial decisions for them.  A general power of attorney is very broad and provides extensive powers to the appointed agent. The powers generally include, though are not limited to, handling banking transactions, access to safe deposit boxes, buying and selling property, purchasing life insurance, settling claims or lawsuits, and filing tax returns. 

All too often we see clients who believe that they are accomplishing succession planning by simply adding an individual to their bank account as a joint-owner.  Joint ownership is not a good idea for many reasons and clients should be aware of the often unintended consequences.  While the joint-owner will have full access to the bank account during one's life, they will also own the remainder of the account upon the owner's death, by right of survivorship.  It is better to give the agent the authority to access the bank account during the principal's life and have that power lapse upon the principal's death. 

Further, a general power of attorney may be a "springing" or effective immediately.  Many of our single and elderly clients prefer the springing power of attorney, which limits the agent to making financial decisions only after the client requests, in writing, that the agent takes an action, or after the client becomes incapacitated.  This appeals to clients who may be reluctant to give up control over their financial assets until it is absolutely necessary for them to do so.  Many married couples will benefit from a non-springing durable general power of attorney which allows the agent to take financial action immediately.  Thus, this type of power of attorney is best for those who have less concerns regarding abuse of authority by their spouse or other agent. 

Another tool that your client should have in their estate planning arsenal is long-term care insurance, which provides emotional security, knowing funds will be available for proper care, and financial security, knowing that his or her healthcare needs will not wholly deplete their assets in the case of a long term illness.  There is no time like the present to consider insurance options.  The longer your client waits, the more likely it is that they will lose eligibility for certain plans or the cost of the plan will increase.  If a client already knows that illnesses like Alzheimer's or Parkinson's run in their family and that long term care may be a reality for them, then they will want to address this option as soon as possible.

Encourage Your Clients To Prepare An Estate Plan
Financial planners and estate planning attorneys can work hand in hand to ensure the successful transition of wealth from one generation to the next.  Families impacted by an individual with a mental disability, incapacity or other special needs, need to see an estate planning attorney as soon as possible.  Setting up powers of attorney is quick and easy and relatively inexpensive.  Creating a revocable trust with special needs provisions requires more time and is more costly, but can mean the difference of whether or not a loved one obtains the necessary government benefits available to them at the time of your client's death. 

Lori K. Murphy, shareholder, and Lauren K. Keenan, associate of Bean, Kinney & Korman, both practice in the areas of wills, trusts and estates, often with an emphasis on clients addressing special needs concerns.  For more information on their practices, or to contact them, please visit