Tag Archives: Elder Law

Planning for Incompetence

One of the scariest scenarios we face is the prospect of no longer being able to make our own decisions and to think for ourselves.  Often this is a process of gradual decline, and either we, or those close to us, can see the changes and understand what is happening.  If you have not done advanced planning, that’s a good time to get moving.  There are some fairly straightforward documents that you can draft and execute which will allow those you love and trust to make important decisions. 

1.  Health Care Proxy:  this document names the person who can make medical decisions for you in the event that you are unable to make them yourself.  In Massachusetts, only one person can be named at a time, but you can have successor agents in case the first person is not available.  I recommend that everyone have a Health Care Proxy (including young adults so that doctors must listen to their parents, or to the person they have designated).

If you do not have a Health Care Proxy and there is a disagreement about your care, it is possible that a Guardian will have to be appointed by the probate court.  This is a process that can be time consuming, complex, and expensive.  In the end, the court decides who will make decisions about your care, not you.

2.  Durable Power of Attorney:  this document names a person who can sign documents on your behalf, and who can make financial and administrative decisions on your behalf.  This can be effective now, or it can come into effect upon your incapacity. 

Like a Health Care Proxy, if you do not have a Durable Power of Attorney, and become incompetent, a family member or caregiver will have to go to court to be named to represent you.  This person is called a Conservator, and this process, like naming a Guardian, requires court involvement and much expense.  It also means that the court makes the final decision about the person best suited to manage  your affairs.  Judges are wise and thoughtful, but they don’t know you or your family members the way that you do – don’t you think you’ll make a better decision?

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Capacity–Can she really make that decision?

Capacity Requirements

Proper execution of a legal instrument requires that the person signing have sufficient mental "capacity" to understand the implications of the document. While most people speak of legal "capacity" or "competence" as a rigid black line–either the person has it or doesn’t–in fact it can be quite variable depending on the person’s abilities and the function for which capacity is required.

One side of the capacity equation involves the client’s abilities, which may change from day to day (or even during the day), depending on the course of the illness, fatigue and the effects of medication. On the other side, greater understanding is required for some legal activities than for others. For instance, you need to have a higher and clearer amount of “capacity” to enter a contract than to write a will. 

Capacity to make a will was summed up by the Massachusetts Supreme Judicial Court:

Testamentary capacity requires ability on the part of the testator to understand and carry in mind, in a general way, the nature and situation of his property and his relations to those persons who would naturally have some claim to his remembrance. It requires freedom from delusion which is the effect of disease or weakness and which might influence the disposition of his property. And it requires ability at the time of execution of the alleged will to understand the nature of the act of making a will.

This is a relatively "low threshold," meaning that signing a will does not require a great deal of capacity. The fact that the next day the testator does not remember the will signing and is not sufficiently "with it" to execute a will then does not invalidate the will if he understood it when he signed it.

The standards for entering into a contract are different because the individual must know not only the nature of her property and the person with whom she is dealing, but also the broader context of the market in which she is agreeing to buy or sell services or property.  This is a more long range kind of understanding, and requires a more complex ability.

While the standards may seem clear, applying them to particular clients may be difficult. The fact that a client does not know the year or the name of the President may mean she does not have capacity to enter into a contract, but not necessarily that she can’t execute a will or durable power of attorney. The determination mixes medical, psychological and legal judgments. It must be made by the attorney (or a judge, in the case of guardianship and conservatorship determinations) based on information gleaned by the attorney in interactions with the client, from other sources such as family members and social workers, and, if necessary, from medical personnel. Doctors and psychiatrists cannot themselves make a determination as to whether an individual has capacity to undertake a legal commitment. But they can provide a professional evaluation of the person that will help an attorney make this decision.

Because you need a third party to assess capacity and because you need to be certain that the formal legal requirements are followed, it can be risky to prepare and execute legal documents on your own without representation by an attorney.

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New Massachusetts Homestead Law

A homestead protects a person’s home from certain creditors.  In some states, this protection is automatic – when you purchase a home and live in it, you receive a certain amount of protection from creditors.  In Massachusetts, you needed to declare a homestead, and file it with the probate court — until recently.  On December 16th, 2010, Governor Patrick signed into law a bill containing a series of important amendments to the Homestead Act (Mass. General Laws, Ch. 188).  The new provisions will be effective on March 16, 2011. 

One important change is that homestead protection of $125,000 will be automatic; greater protection (up to $500,000) is available with the filing of a homestead declaration form.  Forms are available to download from salemdeeds.com or from other county registry websites. 

The other important change, particularly if you are doing estate planning (and really, why else would you be reading this blog?) is that a home held in a trust can now be protected by the homestead declaration.  This provides clarity which has been lacking, and it tis a welcome change for homeowners who have elected to place their homes in trust.  Next week I’ll talk about the benefits of putting your residence into a trust.

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Durable Powers of Attorney–What?

A durable power of attorney gives another person (agent or attorney in fact)the right to make financial decisions on your behalf.  (It’s “durable” if it still works when you are incapacitated).  A power of attorney is useful if you’re closing a real estate deal when  you’re in China, someone else can sign the paperwork for you.  It’s also a basic estate planning tool that allows your agent to pay your bills and handle your financial matters if you’re incapacitated. 

A power of attorney can be very narrow in time (only effective on the closing date) or broad (starts now and is in effect until I die).  It can also be broad or narrow in its powers.  It is a very powerful tool, so be sure that the person, time period and powers are those you’re comfortable entrusting to your agent.  In general, financial institutions prefer original DPOAs, so when you’re at your attorney’s office, you might execute several originals. 

Much like other estate planning documents, it’s important that you communicate your wishes to your agent, so they will act in a way that you would approve of.  A final note, this document terminates on death, so your agent will not be able to access your safety deposit box if you die with your will there, so DON’T PUT YOUR WILL IN YOUR SAFETY DEPOSIT BOX.

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Health Care Proxy–Who decides on my care?

Everyone over the age of 18 should have a health care proxy.  Period.  Everyone.  That means you, too.  A health care proxy appoints the person of your choice to make health care decisions for you if you are unable to do so.  If your college student has a car accident and is taken to the local hospital, you want to be called, consulted, and listened to.  A health care proxy can assist in this process.  (Have him or her keep a copy in the glove box).  A beloved family member is fading from a variety of age related illnesses, a health care proxy will help her get (or not get) the type of treatment SHE would choose.  Will your frail parent want to be resuscitated if it will result in pain, broken ribs, and the extension of their terminal illness?  Are you a “keep on trying no matter what!” type of person? Make that clear to your health care proxy.

A health care proxy in Massachusetts does not replace a living will.  It appoints one person who can direct the medical decisions of the person who has made the document (principal).  The best way to assure that your wishes are honored is to speak with the person you have chosen, and have some honest conversations about your wishes, well before the need arises.   What makes a life worth living, rather than simply existing in pain or incapacity?  This is a personal viewpoint, and one that it’s hard to know about someone else.  Two tools I use with my clients are the “What If Workbook” and “Five Wishes”.  Each lays out some of the questions and decisions we face with end of life medical care.

One final point.  If you want your children or spouse or best friend to be able to speak with your medical provider, they should be named in a HIPPA release form.  Our privacy laws can be a great help in protecting confidentiality, but can frustrate our families attempts to understand our condition and prognosis.  A health care provider may not speak to you even if you are a parent, spouse, or child without legal permission to do so.

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Free Medicare Preventive Care Has Kicked In

 

One of the benefits of the health reform law took effect January 1, 2011: free preventive services for Medicare recipients. Under the law, people with regular Medicare will no longer have to pay a copay, coinsurance or deductible to receive preventive services that are highly recommended by the U.S. Preventive Services Task Force — services that include screenings for breast cancer, colon cancer, diabetes and heart disease, as well as smoking cessation counseling. Private Medicare plans (also known as Medicare Advantage plans) may still charge for these services, but many do not.

Also under the health reform law, Medicare Part B beneficiaries will now receive an annual wellness visit free of charge. During this yearly visit, your doctor or other health practitioner recognized by Medicare (such as a nurse practitioner) will update your medical history and current prescriptions; measure your height, weight, blood pressure and body mass index; create a screening schedule for the next 5 to 10 years and screen for cognitive issues. And Medicare now pays in full, without patient co-pays or deductibles, for the initial "Welcome to Medicare" that Medicare has offered since 2005 to beneficiaries within 12 months of their becoming covered under Medicare Part B. (For a CommonHealth article on what to expect from a wellness visit and how to get the most out of yours, click here.)

"Preventing diseases that can be prevented, and detecting others at earlier, more treatable stages, are among the keystones for transforming Medicare," said Jonathan Blum, deputy administrator and director of the Center for Medicare at the Centers for Medicare and Medicaid Services.

"By eliminating the beneficiary’s out-of-pocket costs for most preventive services, we are removing a barrier to access and paving the way for improved health for seniors and people with disabilities who rely on Medicare for their health coverage."

For a detailed list from the Medicare Rights Center of preventive services that will no longer require out-of-pocket payments,click here. For more on Medicare’s preventive services from the Medicare Rights Center, click here, and from the Center for Medicare Advocacy, click here.

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Massachusetts Health Care Proxies FAQ

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1.  What is a health care proxy? 

A health care proxy names the person that you want to make your medical decisions if  you become incapacitated.

2. Is a health care proxy the same as a living will?

No.  A living will is a document that gives instructions about your medical wishes.  In Massachusetts, the health care proxy has this power, and while it it easier for everyone if your wishes have been communicated in writing, the health care proxy is not bound by your living will.

3.  Can I name both my children as proxies?

No, you can only have one health care proxy at a time.  You may name successors if the first person becomes unavailable to serve as your proxy, but only ONE person can act as your agent at one time.

4.  When does a health care proxy go into effect? 

Usually your doctor “activates” your health care proxy by determining that you are unable to make your own decisions.  This can happen, for example, to an elderly person who is suffering from dementia, or a young person who is unconscious after an accident or other illness.

5.  Can I revoke my health care proxy?

Yes, you can revoke your health care proxy at any time.  In addition, even if a doctor has determined that you are incompetent, if you don’t agree with your proxy’s decisions, YOUR decisions and wishes must be respected unless a court has determined that you are incompetent.

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