Considerations for Estate Planning for the Terminally Ill

 

Life is unpredictable and uncertain – we all know this – but many of us struggle with these facts on a daily basis.  I think planning can help prepare all of us – whether we are healthy or ill – for the inevitable and help us take stock of what matters most in our lives.  Yes, I have even gone so far as to write about law as a healing profession in this regard!  When someone has been diagnosed with a terminal illness, the unpredictable and uncertain qualities of life take on a whole new meaning.  A conversation with a knowledgeable and sensitive attorney can help to provide individuals and families facing terminal illness with some certainty in a stage of life that is usually very difficult.  Confirming estate plans or making them for the first time, as well as making arrangements regarding health care matters like medical durable powers of attorney and advance directives, can contribute to precious peace of mind.  What many people tend to overlook is the value of this process and making the arrangements in advance.  Benefits for the ill person include a sense that “loose ends” are tied up, and a similar benefit for the survivors is gained by knowing that plans are in place and that there is a “known universe” of how to take care of practical matters after a person has passed away.  This leaves more space and time for survivors to grieve.  Fortunately, there are excellent resources in the Denver metro area to support individuals of all ages in the grieving process.  Check out the Heartlight Center, a great community resource.

What do the terminally ill need to consider?  Here’s a short list:

  • health care power of attorney (to name an agent to provide informed consent for treatment);
  • Colorado advance directives (living will);
  • the Vulcan green MOST form (Medical Orders for Scope of Treatment);
  • general (financial) power of attorney;
  • a will (to identify your beneficiaries and who will be the personal representative in charge of carrying out your wishes in your will);
  • a trust for minor or disabled children or for minor grandchildren.

These are usually not easy things to discuss, but most people benefit from this conversation and planning, coming away with reported peace of mind.  The legal issues may seem straightforward and they often are, but they may be entangled with emotional, financial and medical matters which tend to complicate things during a time of stress and anxiety.  I also recommend people facing terminal illness and their families take advantage of the many resources available to chart the difficult emotional waters of this time.  During the times when I was health care agent for my father, I found two books in particular very helpful.  One of my favorite books written by a doctor is Dying Well,  by Ira Byock, M.D., (1997) and another book of his I have blogged about is titled  The Four Things That Matter Most: A Book About Living.  The Four Things are about saying what really matters (“please forgive me,” I forgive you,” “thank you,’ and “I love you”)  before a person passes away, and Dying Well is about reclaiming dignity in the dying process and providing compassionate care for and presence with a dying loved one.

Another doctor/author I like is Jerome Groopman, M.D., who has written several books and is a contributor to The New Yorker . The Anatomy of Hope (on my bookshelf, about terminal illness) published in 2004, and Your Medical Mind,   published in 2011, about how to choose your medical decisions wisely, are especially helpful to individuals and loved ones facing terminal illness.

People facing terminal illness may not want to change anything about how they live their lives, or they may want to rearrange things entirely.  These are entirely individual decisions and each of us faces our own mortality differently.  Getting sound and sensitive advice about financial and legal matters as part of an estate planning consultation with an attorney can help bring some of the stress of the unknown into the “known world,” and ease the burden of uncertainty during difficult times.

©Barbara Cashman, LLC  www.DenverElderLaw.org

How Does the Service Many Elder Law Attorneys Provide Differ From the More “Traditional” Attorney-Client Relationship?

I’m pleased to be presenting again at the Fourth Annual Elder Law Retreat in Vail, Colorado next week.  It’s put on by our Colorado Bar Association Continuing Legal Education, Inc. and is co-sponsored by the Elder Law Section of the CBA and the Colorado Chapter of the National Academy of Elder Law Attorneys. My breakout sessions cover the intersection of ethics and practice management for attorneys practicing in the elder law field.

I thought an overview of some of the different ways that elder law attorneys are hired by and work with clients, and how the relationships can be more complicated than the more “traditional” areas of practice would make an interesting blog post.  So here goes. . . .

I’ve said this in a few other places already, but we’ve never had this many 80 and 90 year-olds on the face of the planet before!  Many of us baby boomers hope that our life spans will extend beyond those of our parents, so what’s the big deal?   That’s where the relatively new field of elder law comes in . . . .

What is Elder Law?

Elder law is a practice area that started out as an outgrowth of the more traditional trusts and estates field, but is essentially a general practice area that is concerned with the needs and legal challenges of older people (elders) .  With medical advances and relative affluence, people are living longer, and periods of incapacity are more common, along with a greater incidence of cognitive and physical disability.  Other factors that impact the growth of elder law are the outsourcing of some of the care that families have traditionally provided elders, which has resulted in no small part from the number of women in the workforce, along with family members living apart from each other geographically.  Some important distinctions are relevant here – elder law attorneys may sometimes:

    • meet with clients at home or in health care facilities
    • meet with clients who are brought in by family member to the lawyer’s office
    • work with other allied elder care professionals like geriatric care managers
    • work within a “communitarian” or family-based approach to benefit all family members

These are just a few examples of how the “traditional” single client attorney client relationship, that is “typically” geared at some type of litigation to fix a problem differs widely from an approach where an elder client is looking for counseling  and preparation of documents that will facilitate their continued support with family member involvement.

The majority of elder law attorneys – except those practicing in contested probate matters – tend to look for ways to avoid litigation and may adopt an approach that is not the traditionally “adversarial” approach but take one that is decidedly “facilitative” in outlook.  What I mean here is an attorney who can think outside the box and negotiate agreements that aren’t exclusively protection oriented but are results oriented.  In a litigation obsessed world, many lawyers are focused exclusively on their concerns as lawyers – avoiding bad results for their clients.  This is often to the detriment of what the client wants – a creative solution that provides results.

How Does the Delivery of Elder Law Legal Services Differ from a More “Traditional” Approach?

Due to the age of many clients, elder law attorneys must be aware of and sensitive to a number of issues which do not affect a more traditional law practice.  Some of these include:

    • sensitivity to cognitive and physical limitations that may be associated with aging (mobility, hearing, etc)
    • familiarity with medications  and how these may impact the attorney/client relationship
    • awareness of impact of family dynamics and how these impact legal and financial planning
    • sensitivity to relationships needed to maintain well-being and autonomy

 

How Elder Law Attorneys Can Work with Clients

Many of us who practice elder law work with our clients in ways that are beneficial to our clients but that sometimes appear to fall outside the norm of a “standard” attorney-client relationship.  These can include a need for the attorney to:

    • conduct a separate meeting with an elder brought in by a family member
    • consider whether joint representation (two people) or multiple representation is appropriate
    • determine who is “the client” so as to identify the person to whom the attorney owes her duties
    • assess whether a potential client has the capacity to enter into an agreement with an attorney for her services
    • work productively within difficult or strained relationships among family members
    • be able to work with other people who are involved in the elder’s care

For me, elder and estate law and mediation practice is satisfying work because of the human relationship and “helping” aspects.  Sometimes people think this sensitivity might be inconsistent with the legal analytical skills required to come up with a sound strategy and to draft effective documents to execute the strategy, but I assure you that there are many of us who are attracted to this field because of this unique skill set required.  And yes, many of us happen to be women, so we can relate to many of the caregiver issues in ways that are consistent with our own experience.

Elder law is an interesting and intellectually challenging area of practice and it is important that the client feel comfortable working with an attorney and discussing many personal matters.  In my opinion, estate and elder law attorneys tend to be more responsive and respectful of people’s vulnerabilities – whether these are due to skepticism about what services an attorney is proposing to provide, a client’s difficulty with understanding what “the law” is relevant to a particular question, or a client’s state of fragile or frail health.  I have to say that I enjoy working with other estate and elder law attorneys  in the Colorado Bar Association’s Trusts & Estates and Elder Law Sections– they typically know how to play nicely together in “the sandbox.”

 ©Barbara Cashman, LLC   www.DenverElderLaw.org 

Legal and Financial Considerations for Nontraditional Relationships part 2

 

Last night I attended the monthly meeting of the Women’s Estate Planning Council , and as usual – we had a very informative speaker.  Bradley L. Kolstoe  presented “Savvy Social Security Planning,” about understanding the importance of Social Security.  I have to say that I would use the term “understanding” from my perspective here rather loosely.  It reminds me of P.L. Travers’, the author of Mary Poppins (yes, she’s still around – she recently battled Voldemort at the London Olympics!) description of the term as “standing under.”  There was a downpour of information and a lot of  it rolled right off me!  Luckily, we can visit Brad’s website here, and it has several helpful articles

So what about Social Security and nontraditional relationships?  Well, social security retirement is the biggest federal benefit regime and it only applies to individuals and married couples (I’m leaving out minor children and others intentionally here).  What are the implications for couples who are co-habiting but not in a marital relationship?  Huge!  I think it is part of the many details that couples who could otherwise be married typically overlook.  I’m talking here about opposite sex couples, because federal benefits only apply to them as long as the Defense of Marriage Act Defense of Marriage Act (DOMA, Pub.L. 104-199, 110 Stat. 2419, enacted September 21, 1996, 1 U.S.C. § 7 and 28 U.S.C. § 1738C) is in force – which may not be much longer. . .

So what’s the point I’m making here?  I recently published a book review in The Colorado Lawyer  of Professor Cynthia Grant Bowman’s 2010 Oxford University book “Unmarried Couples, Law and Public Policy.”  This book covers the marriage debate (cohabitation), but not the “marriage equality” (for same sex couples) debate.  With the decreasing number of people getting married, and divorces among folks over 50 going up considerably ,retirement planning and factoring in social security benefits are getting more complicated all the time!  The bigger issue that concerns me is for the unmarried couples who tend to underestimate the value of social security to financial stability in retirement years.

As Bowman points out in her book, cohabitation in the U.S. is problematic at best.  Unlike nearly all European countries, which have adopted some national laws  aimed at addressing the cohabitation phenomenon, the U.S. is still “on the fence” about some pretty basic issues.  What we have in this country, is a patchwork crazy quilt of local, sometimes statewide recognition of certain limited rights in particular states.  There is no standard for these rights, they are typically determined on a case-by-case basis, based on particular facts of each case brought to a court’s attention.  Cohabiting couples either have to forge their own agreements about important financial and legal considerations, or see what happens as a result of legal action.  There is no legal proceeding for “termination of cohabitation,” so the type of legal rights sought to be enforced really depends on the particular couple.

This can be a big problem, particularly for those vulnerable persons in a cohabiting relationship – who tend to be (but this is changing to some extent) women and children.  Bowman recommends providing legal remedies to cohabitants including:

(1) domestic partners who have been together two years or more and have a child together should be treated as though they were married;

(2) the ability to “opt out” contractually of these obligations should be easily available for couples not wishing to be treated as married; and

(3) a system for registration as domestic partners should be provided, accompanied by all the benefits and burdens of marriage unless the partners opt out with their own contractual arrangement delimiting their rights.

Bowman at 223.  I think as a country we might be some distance away  from providing such protections to cohabitants, so in the meantime it’s best to protect yourself by knowing what rights you have and what rights you don’t have when you are in a cohabiting relationship.  Bottom line is – don’t make assumptions based on your lifestyle.  Just because you feel like you’re married doesn’t mean the law won’t treat you like “legal strangers!”  Make sure you know what your future looks like if you are in an unmarried (cohabiting) relationship.

 ©Barbara Cashman, LLC   www.DenverElderLaw.org

Mistakes People Make with Medicaid and Long Term Care

  1. Thinking it’s too late to plan.

There is a lot of information about Medicaid  for long term care of the elderly – rules, eligibility,  etc. available to the public, (FAQs from Colorado Dept. Health Care Policy & Financing ) and many people suffer from information overload in this regard.  Sometimes this results in reacting to a situation without a plan, which can add to the stress of uncertainty.  People considering future Medicaid application are often in a downward health spiral that creates stress and anxiety for family members who are helping and providing for care.  This is a difficult mix!  Before you jump to conclusions about whether it’s too late or too early to start planning for Medicaid qualification – inform yourself.  It’s never too late to have a strategy – especially if you want to manage stress effectively during difficult times or the end stages of an elder loved one’s life.

2. Giving away assets too soon.

 Many of us hear from people who want to “avoid paying the nursing homes” for what is perceived to be overpriced health care.  The fact is, most long term care for elders is provided by family members on an unpaid basis.  Fewer people (as a percentage of the elder population) are living in nursing homes (or SNFs – short for skilled nursing facilities) but there is a point when the medical care needed to sustain a person may require placement at a SNF.  Placement in a SNF may be a cheaper alternative to home care for many frail elders and is often a necessity.  Medicaid is the national health care program for poor and low income Americans and is the safety net for long term care and Medicare covers less than 9% of SNF care.

3. Ignoring important safe harbors created by Congress.

This is some of the Medicaid fine print! Certain transfers are allowable without jeopardizing Medicaid eligibility. These include: transfers to disabled children, caretaker children, certain siblings and to a trust: for a disabled person under age 65; a transfer to a “pay-back” trust if under age 65; and a transfer to a pooled disability trust at any age.

4. Failing to take advantage of protections for the spouse of a nursing home resident.

Several protections are afforded the noninstitutionalized  “community spouse.” These protections include the purchase of an immediate annuity, petitioning for an increased community spouse resource allowance, and in some instances petitioning for an increased income allowance or refusing to cooperate with the nursing home spouse’s Medicaid application.

5. Applying for Medicaid too early or too late.

Doing either of these can result in a longer period of ineligibility in some instances, so it is important to try for “the golden mean” in terms of timing.

7. Confusing IRS tax rules with Medicaid rules.

The rules regarding income, estate and gift taxes are completely separate from Medicaid. While it is important to be mindful of the tax consequences of any type of asset planning, confusing these two different systems can lead to disaster.

8. Not getting expert help.

This is a complicated field that most people deal with only once in their lives. There is lots of money at stake, and the information can be overwhelming.  For many people, it makes sense from a peace of mind investment perspective to consult with persons who make their living guiding and counseling people about these issues.

©Barbara Cashman, LLC  www.DenverElderLaw.org