Wills, Trusts & Estates Prof Blog

Editor: Gerry W. Beyer
Texas Tech Univ. School of Law

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Thursday, December 18, 2014

Congress Passes ABLE Act

LawAs I have previously discussed, the Achieving a Better Life Experience (ABLE) Act supported by disability rights groups would change the current limitation that individuals with a disability may not hold assets over $2,000 without losing Medicaid and other government benefits eligibility. The Act passed the House on December 3, and the Senate this past Tuesday. Under the Act, a tax-free savings account for disability-related expenses is allowed up to $100,000.

See Gail Russel Chaddock, ABLE Act: How One Bill Offers Hope on Congress's Biggest Problems, The Christian Science Monitor, Dec. 17, 2014.

Special thanks to Jim Hillhouse (Professional Legal Marketing (PLM, Inc.)) for bringing this article to my attention.

December 18, 2014 in Disability Planning - Health Care, New Legislation | Permalink | Comments (0) | TrackBack (0)

Tuesday, December 16, 2014

Planning for Incapacity

Power of attorney

An estate plan often focuses on what happens after you die.  However, if you have not made arrangements in the event you become mentally incapacitated, your plan is incomplete.  If your plan does not specify how financial or health care decisions will be made and you become incapacitated, a court-appointed guardian must act on your behalf.  Below is a list of documents that will ensure your affairs are in order:

  • Revocable Trust.  Also called a “living trust,” this is designed to hold most of your assets.  As trustee, you have control over the assets, but if you become incapacitated, your designee takes over.
  • Durable Power of Attorney.  This authorizes a designee to manage your property and finances, with the limitations you create.
  • Living Will. It expresses your preferences regarding life-sustaining medical treatment in the event you are unable to communicate your wishes. 
  • Health Care Power of Attorney.  This authorizes your designee to make medical decisions on your behalf in the event you cannot make or communicate them yourself. 
  • HIPAA Authorization.  Even if you have a health care power of attorney, some medical providers refuse to release medical information.  Thus, it is important to sign a HIPAA authorization allowing providers to release medical information to your designee.

See E. Hans Lundsten and Joseph Marion III, Estate Planning Pitfall—You Haven’t Planned for Incapacity, JD Supra Business Advisor, Dec. 15, 2014. 

Special thanks to Jim Hillhouse (Professional Legal Marketing (PLM, Inc.)) for bringing this article to my attention.

December 16, 2014 in Disability Planning - Health Care, Disability Planning - Property Management, Estate Planning - Generally, Trusts, Wills | Permalink | Comments (0) | TrackBack (0)

Representing a Client With Diminished Capacity

ScaleA recent  Ethics Opinion from the Colorado BAR Association analysis the ethical issues and delicate balance between protecting a client and maintaining a normal lawyer-client relationship when an attorney is representing an adult client with diminished capacity when the representation is not in protective proceedings, such as guardianship and conservatorship. Provided below is the syllabus from the opinion:

There are times when a lawyer may need to consider whether the adult client's capacity to make adequately considered decisions relating to the representation is diminished. Should the lawyer reasonably conclude that the client's capacity is diminished in such a manner as to impair the client's ability to make adequately considered decisions regarding the representation or to give informed consent to a course of conduct by the lawyer when required, the lawyer must maintain a normal lawyer-client relationship with the client insofar as reasonably possible. If the lawyer reasonably believes that the client's diminished capacity places the client at risk of substantial physical, financial or other harm unless action is taken, and that the client cannot adequately act in the client's own interests, the lawyer should consider whether to take reasonable protective action necessary to protect the client's interests. In taking such protective action the lawyer should be guided by the wishes and values of the client and the client's best interests, and any protective actions taken should intrude into the client's decision making authority to the least extent feasible. In taking protective action the lawyer is impliedly authorized to disclose information relating to the representation which Colo.RPC Rule 1.6 would otherwise prohibit, but only to the extent reasonably necessary to protect the client's interests. Care should be taken to insure that information disclosed cannot be used against the interests of the client. Differences may arise between the lawyer and client regarding whether or to what extent the client’s capacity is diminished; whether the lawyer should reveal information regarding the client’s condition, or whether the lawyer should take any actions to protect the client. These differences may present conflicts between the interests of the client and those of the lawyer and the lawyer must assess whether representation of the client will be materially limited as a result.

Special thanks to Michael Kirtland (Attorney, Colorado Springs, CO) for bringing this opinion to my attention.

December 16, 2014 in Disability Planning - Health Care, Elder Law, Professional Responsibility | Permalink | Comments (0) | TrackBack (0)

Friday, December 12, 2014

The Cost of Alzheimer's

Medical expenses

Each year, more than 15 million people care for loved ones suffering from Alzheimer’s disease.  While caregiving can take an emotional toll, the caregiver may also be subject to financial loss.  According to a new survey by AgingCare.com, more than one quarter of Alzheimer’s caregivers spend more than $4,000 each month on their loved one’s needs.

The same survey showed that 61 percent of caregivers stated their loved ones had failed to plan for future care.  Unfortunately, caregivers would spend substantially less money if there had been proper planning.  Although uncomfortable, planning early for the possibility of Alzheimer’s is critical, as it saves substantial assets and avoids untold stress on loved ones.

The best way to protect assets from nursing home costs is to purchase long-term care insurance.  If you do not have this, the next best plan is the Medicaid Asset Protection Trust, which protects assets form long-term care costs after five years. 

Medicaid is the largest payer of nursing home costs in the U.S.  In order to qualify for Medicaid to pay these costs, you may only have a limited amount of assets.  By placing some of your assets in the MAPT for five years, they are protected from being used for nursing home costs. 

See Bonnie Kraham, Cost of Caregiving For Those With Alzheimer’s, Times Herald Record, Dec. 10, 2014.

Special thanks to Jim Hillhouse (Professional Legal Marketing (PLM, Inc.)) for bringing this article to my attention.

December 12, 2014 in Disability Planning - Health Care, Elder Law, Estate Planning - Generally, Trusts | Permalink | Comments (0) | TrackBack (0)

Wednesday, December 10, 2014

Creating A Stress Free Estate Plan

Stress free

While it is easy to assume that estate planning primarily deals with one’s future needs, an estate plan can eliminate one issue that is in the present: stress and worry.  Although everyone is different, there are a number of basic elements that go into creating a stress free estate plan:

  1. Determine who will manage your affairs if you become disabled, incapacitated, or pass away.
  2. Plan your estate if you enter a nursing home or receive significant long-term healthcare.
  3. Protect children from your prior marriage in case you pass away before your present spouse.
  4. Protect assets inherited by your heirs from lawsuits, divorces, and other claims.
  5. Provide for children or grandchildren with special needs.
  6. Address the different needs of your children.
  7. Prevent challenges to your estate plan.
  8. Plan an estate plan for blended families to ensure all children are provided for.

See Mark Eghrari, 11 Fundamental Elements of a Stress-Free Estate Plan, Forbes, Dec. 9, 2014. 

December 10, 2014 in Disability Planning - Health Care, Disability Planning - Property Management, Estate Administration, Estate Planning - Generally, Trusts, Wills | Permalink | Comments (0) | TrackBack (0)

Sunday, December 7, 2014

Estate Planning Must Haves for the 20-Somethings

Twenty somethings

Most young adults fail to think about their estate planning needs.  Yet, all adults, no matter their age, should have some type of estate plan in place. 

Young adults are not in need of anything complex; just a foundation that can be built by a few documents.  Below are some key pieces of paperwork that can help jumpstart estate planning for the twenty-somethings:

  • Health Care Advance Directive. This document allow individuals to name another person to make medical decisions on their behalf, in the event a physician determines they cannot make them on their own.  Although many young adults may not see the need for such a document, in the event of an accident or unforeseen event, families may not be able to agree on a treatment or course of action without an advance directive.
  • Durable Powers of Attorney. This allows a named individual to make legal and financial decisions on your behalf.  Similar to health care directives, this is a “what-if” document,” and essential that adults give thought to these powers of attorney.
  • Will. If an individual passes without a will, state law dictates who will receive assets.  For those who are uncomfortable with this situation, it is necessary to draft a will to ensure the proper persons will inherit. 
  • Beneficiary Designations. Work related assets are often a young adult’s most valuable property.  These types of assets are passed by beneficiary designations rather than by will.  Young people are typically unaware of this, or do not get around to filling out the forms.

See Tracy Craig, 5 Financial Documents Every 20-Something Should Have, Financial Planning, Dec. 4, 2014. 

December 7, 2014 in Disability Planning - Health Care, Disability Planning - Property Management, Estate Administration, Estate Planning - Generally, Non-Probate Assets, Wills | Permalink | Comments (0) | TrackBack (0)

Saturday, December 6, 2014

Employers HIPAA Obligations for Deceased or Incapacitated Employees

HealthAfter the death or incapacitation of an employee, family members and other interested parties may request medical information from the employer. However, many employers required to follow the Health Insurance Portability and Accountability Act of 1996 (HIPAA) do not have policies for protecting the employee's medical information after the employee dies or is incapacitated. Here are some general guidelines for who can receive the  employee's HIPAA protected information in such a case:

  • The person considered the employee's legal representative as directed by state law, such as the estate's administrator, may receive health information regarding the employee.
  • Other close family members may only receive information if it relates to their involvement in the care or payment of care for the employee, and the employee did not previously express otherwise to the employer.
  • Information may also be released to law enforcement if for use in a criminal investigation.

See Brandon K. Johnson, HIPAA Considerations In The Event of Employee Death or Incapacitation, The National Law Review, Dec. 5, 2014.

Special thanks to Jim Hillhouse (Professional Legal Marketing (PLM, Inc.)) for bringing this article to my attention.

December 6, 2014 in Disability Planning - Health Care, Estate Planning - Generally | Permalink | Comments (0) | TrackBack (0)

China Announces an End to Organ Harvesting From Executed Prisoners

HeartIt was announced yesterday that China will stop the practice of harvesting the organs of executed prisoners for use in organ donations. Many are skeptical that the practice will actually stop due to corruption and how profitable the sale of organs is. Additionally, there are concerns that there will not be enough organ donations to meet the need for organ transplants, due to cultural norms and concerns over the organs being sold on the black market. Only 1,448 individuals donated organs through China's voluntary donation scheme between 2010 and 2013. The annual need for organ donations is roughly 300,000 individuals.

See Katie Hunt, Why China Will Struggle to End Organ Harvesting From Executed Prisoners, CNN, Dec. 5, 2014.

December 6, 2014 in Current Affairs, Current Events, Disability Planning - Health Care | Permalink | Comments (0) | TrackBack (0)

Friday, December 5, 2014

Revamped Health Care Power of Attorney in Illinois


On August 26, 2014 Governor Quinn of Illinois signed Senate Bill 3228, which amended the Illinois Power of Attorney for Health Care statute. 

The form has been renamed “My Power of Attorney for Health Care” and reformatted in a Q&A style to look less like a legal document.  This change came from the urge of the Illinois State Medical Society (ISMS), arguing the existing for “is confusing and uses too much technical language and requires college-level English proficiency to understand.”  The new form is written at 8th and 10th grade levels.  Below are some of the key provisions in the new law:

  • Existing Power of Attorney for Health Care’s (PAH) are grandfathered as valid. The statute includes a savings clause, provided that the changes do not invalidate any PAH created prior to 2015.
  • Statutory Form Qualification. The revised law says that “no specific format is required for the statutory health care power of attorney other than the notice must precede the form.”  This is to ensure that PAH’s are not rejected due to for errors or minor edits.
  • Witness Restrictions. The existing PAH requires one witness signature, but no notary.  The amended statute expands the categories of persons prohibited from signing as witness to include certain licensed professionals from providing services to the principal. 
  • Who Can(not) Act as “Health Care Agent.” The Health Care Agent must be at least 18 years old and cannot be a health care provider or any “health care professional” who is administering health care to the patient.
  • Life Sustaining Treatment. The existing law includes references and definitions for “incurable or irreversible condition,” “permanent unconsciousness” and “terminal condition.”  The new law deletes these three definitions.  Instead, the agent is instructed to weigh the burdens versus benefits of proposed treatments. 

See Jeffrey R. Gottileb, Illinois Power of Attorney for Health Care Gets Makeover in 2015, Law Offices of Robert H. Glorch, Dec. 2, 2014. 

December 5, 2014 in Disability Planning - Health Care, Elder Law, Estate Planning - Generally, New Legislation | Permalink | Comments (0) | TrackBack (0)

Thursday, December 4, 2014

Advance Care Planning

Healthcare proxy

Many people create their advance directives younger in life, outlining the medical interventions they would want or refuse in situations when they cannot speak for themselves.  Yet, after an unfortunate medical diagnosis or in old age, those directives do not always match the wishes of the people who wrote them.  “Advance care planning is not a moment in time.  It’s a process.” 

The process begins by creating an advance directive, usually including a living will and a medical power of attorney.  A living will outlines what kind of medical care a person would want if he or she cannot communicate.  The medical power of attorney, or health care proxy, designates a person to make medical decisions for the person who can no longer make them. 

Once the directive is made, people should revisit it periodically, especially after any serious medical diagnosis, to ensure the document represents their best thinking.  If you find your current wishes are not provided for, update your directives.  It is also important for individuals to designate a health care proxy who knows them well and will have their best interests at heart.

People’s preferences for medical interventions can change for a variety of reasons.  Moreover, medical situations are often more complicated in real life than they are on paper. 

See Elizabeth O’Brien, Your ‘Living Will’: What Happens If You Change Your Mind? Market Watch, Dec. 4, 2014.

Special thanks to Jim Hillhouse (Professional Legal Marketing (PLM, Inc.)) for bringing this article to my attention.

December 4, 2014 in Disability Planning - Health Care, Elder Law, Estate Planning - Generally, Wills | Permalink | Comments (0) | TrackBack (0)