Whether you are currently caring for an aging parent or relative or expect to be doing so soon, its never too early to think about important legal questions that you will face at every stage of caregiving.  My Health Care Manager has enlisted the help of George Slater to explain the issues specific to elderlaw and to help you prepare for the future.

George G. Slater is the senior partner of Slater Law Office LLC, Elder Law Attorneys, located in Carmel, Indiana. He has practiced law for twenty-seven years, and has limited his practice to Elder Law for the past seventeen years. George holds a law degree from Indiana University, a Masters Degree in Business Administration from Northwestern University, and is also a CPA. He served as Chairman of the Indiana State Bar Association Elder Law Committee for five years and is Board Certified by the National Elder Law Foundation.  To learn more, please visit his website at http://www.slaterelderlaw.com.

Much has been written about the requirements for executing advance directives such as powers of attorney, designation of a health care representative, living wills, arrangement for organ donation, and do not resuscitate orders.  Giving thought to any of these directives is a good idea in advance of the need for them - for seniors, their caregivers, and people of all ages.  Today I am thinking more about some of the things that can go wrong, or should I say go differently than anticipated with respect to advance directives.  For example:

1) The law in Indiana is that a designation of health care representative, more commonly known in other states as a health care power of attorney, is only effective when the principal is not able to make decisions.  Notice that in our documents the power to make decisions for someone else is usually prefaced by the words “whenever I am incapable of making my own health care decisions.”  That sounds clear enough, but in reality, a health care facility cannot practically decide, on a day to day basis when their patient is capable or not capable.  This tends to lead to a bias to ask the health care representative what care should be given, even when the principal is competent to make the decision.  It is the representative that may be paying the bills.  It is the representative who made the admission decision and has the most interaction with some of the staff. The point is that we must guard against allowing health care providers to always ask the representative.  It is the patient that should have input, if possible.


In my next couple of blog entries, I'll give more examples of how things can progress differently than expected...

I thought I would spent the next few blog postings covering a few related topics that are on the top of the minds of all caregivers – how to identify when Mom or Dad is making questionable investments or being taking advantage of through various financial scams.  I will discuss several of the more commonly-used practices of each so that you as a caregiver will be on the alert.

I’ve received a number of questions lately about STOLIs, or stranger-originated life insurance policies.  STOLIs are a type of life insurance policy in which another person provides the senior with a one-time cash payment and agrees to pay the policy premiums.  In return, that “stranger” is named as the beneficiary of the policy.  The senior gets immediate access to cash and has no premium to pay.  The stranger gets the policy payout once the senior passes.  The stranger can also sell the rights to the future benefit under the policy to a third person, usually an investment group or hedge fund.

If these STOLI arrangements make you feel a little uncomfortable, they should.  These schemes literally are investments in someone else’s death.  They thwart the true purpose of life insurance, which is supposed to provide the surviving family members the ability to pay off the debts and expenses of the deceased – not for the sole intention of providing someone else with the ability to seek a profit from another’s passing. 

Some have argued that STOLIs are really just another form of viaticals in which an insured sells off its rights to the policy benefit for something less that the benefit itself to get access to cash to pay for needed medical expenses.  The most common use of viaticals is by those with terminal illnesses.  The key difference between STOLIs and viaticals is that in the latter, the insured person knows they are going to pass soon and the policy was pre-existing.  Under a STOLI scheme, a senior is encouraged to enter into a policy simply to receive immediate cash outright regardless of their current health situation and investors then hope for and hedge on a person’s early death because it will result in higher profits.  

While STOLIs fly in the face of public policy, they are currently legal in most states thanks to, among other things, a wrinkle in the NAIC Model Viatical Settlement Model Law.  At least one state has recently outlawed them, and several states are currently considering legislation to do so, recognizing that these STOLI policies violate states’ laws regarding "insurable interests" that are designed to prevent a person from buying an insurance policy that has no interest in that person’s continued good health. 

My advice is to be on the watch for any large sums of money that Mom or Dad suddenly come into possession of, and to be sure that you are aware of all of the various types of insurance that they have currently in place.

Someone asked me recently if a DNR was the same as a living will.  A DNR is another kind of advance directive, but it is different than a living will.  As I previously wrote on this blog, a living will covers a person’s wishes with respect to their health care in the event they cannot speak for themselves.  A DNR is a very narrow and specific medical order that specifies medical professionals should not administer lifesaving procedures in the event someone’s heart stops or they stop breathing.  Basically, it’s a statement by that individual to allow them to pass away without CPR or an attempt to revive them.  DNR orders are put into place when an individual is severely ill and its believed that CPR would only delay the inevitable.  Most hospitals ask patients at the point of admission whether they want to be resuscitated.  DNRs are usually attached to a patient’s chart.  Without a DNR, hospital staff will take measures to revive a patient.  Keep in mind that a DNR order does not state that no treatment at all should be given -- just that the patient does not want to be resuscitated.

As with most legal documents, there are various state-specific requirements and forms for DNRs, so you should consult with a local attorney or knowledgeable hospital staff.  Generally, DNRs must be signed by the senior and two physicians.  If you are caring for a parent or family member at home, you could also seek to have in place a “nonhospital DNR”, which will release a paramedic from their duty to resuscitate. 

There are two kinds of "advance directives" that are designed to “speak” for your parent regarding their health care needs in the event that your parent can no longer speak for themselves.  One is a living will, which spells out in advance your parent’s desires regarding any life-sustaining medical treatments in the event they are incapacitated.  The other is a health-care proxy (also called a Power of Attorney for Heath Care) which appoints someone to make these decisions regarding their care in their place.  Both are essential in providing your parent the peace of mind and protection that they will either receive the life-sustaining measures they desire or have identified certain procedures they want to avoid.  While most everyone would agree that these documents are essential, very few people actually have them in place.  Here are a few things to think about regarding each:

A Living Will

• This document provides direction regarding your parent’s wishes as to whether any aggressive treatments should be used to prolong their lives.  It only takes effect when your parent is close to death.
• An example of those wishes might be for them to want to pass away without pain and advanced medical treatment in the event that there is no reasonable chance for recovery.
• Likewise, they might provide very broad wishes and ask to be kept alive by any means necessary.  It could also be very specific, such as to have artificial nutrition, but not be put on an artificial respirator.

A Health Care Proxy

• This is a much broader authority that provides someone your parent trusts to make these end-of-life and medical decisions for them rather than spell them out ahead of time.
• Be sure that the person your parent appoints is someone they trust that can make these decisions for them and that will have full access to your parent’s medical records.

Both documents must be executed while your parent is fully competent, so don’t wait to talk to them about each.  There are state specific requirements in what needs to appear in each of them and when they become effective (ie, some states define “terminally ill” differently), so be sure to consult with an attorney who can help prepare both documents and provide you the proper guidance.     

I’ve had a number of people contact me since my last post regarding a parent’s concern that whoever holds a Power of Attorney could literally swoop in and take over their parent’s life at any time.  This is a common concern among seniors.  If your parent shares this concern, here are some tips on how to talk to them about the importance of having Powers of Attorney:

• Tell your parent to view the powers under a Power of Attorney as their authority to give and to control.  Giving someone else authority under such a document is an incredibly empowering step and they should recognize it as such, rather than seeing it as losing or giving up control.
• Your parent needs to very clear with their attorney that helps them prepare a Power of Attorney regarding their concerns and hopes so that he or she can craft the document in such a way it is specifically tailored to their future interests. 
• They need to know that its their decision as to how broad or limited the authority they want to provide (ie, handling all financial affairs, or just writing checks out of a specific account) and specifically when she would want that authority to go into effect.
• Tell them that the authority under a general Power of Attorney can be revoked by them at any time, and does not continue in the event they are incapacitated.
• You can also tell them that by creating a carefully crafted durable Power of Attorney specifically for health care now, they are taking an incredible amount of control over their future by giving direction to someone about their own health care needs down the road in the event they can’t make those decisions for themselves. 
• Finally, you should encourage them to select someone to be the attorney-in-fact that they trust tremendously and to even choose a trusted and reliable backup in the event their first choice cannot fulfill this role for someone reason.

I hope these tips are helpful as you talk to your parent about the importance of Powers of Attorney.  More than anything, they must understand that the authority is their’s to provide, so it is theirs to limit and tailor so that their future affairs and health care needs are taken care of in accordance with their wishes and by an individual they trust.  Not taking these steps now might result in them having provided zero direction to anyone at all and then someone else really might “take over” these essential decisions in the future in ways that may or may not be in accordance with their future wishes.

I was reading through an incredible book the other day, called “And Thou Shalt Honor: The Caregiver’s Companion” (everyone should read this book), and found a great legal checklist for caregivers.  As you think through some of the suggestions I’ve provided on this blog and prepare to talk to your parent(s) about various legal documents, the following list would be a great tool for all adult children who are caregiving for aging parents to keep by their sides:

• Prepare an inventory of all assets, including real estate, bank accounts, stocks and bonds, pension and retirement benefits, and family heirlooms.
• Help decide who should receive each and every asset.
• If your loved one has a will, review it together to make sure it reflects the person’s wishes.  If it doesn’t, suggest she draft a new one.
• Determine whether your loved could reduce the time and expense of probate by creating living trusts and other financial instruments.
• Confirm that the designated beneficiaries of life insurance policies, 401(k) plans, IRAs, and other accounts are consistent with your loved one’s wishes.  If not, have her update the names.
• Help select someone trustworthy and reliable as executor of the estate.
• Find out whether your loved one has prepared a durable power of attorney for finances and a durable power of attorney for health care.  If she hasn’t, encourage her to do so.
• Inform the prospective executor of the estate, as well as the agents for the durable powers of attorney, that they’ve been chosen for these roles.  Ask whether they’re able to accept the responsibilities.
• Discuss your loved one’s wishes for end-of-life care, then help create a living will.
• Make sure that all legal documents conform to the laws of your loved one’s state, and that they’re signed and dated.
• Advise your loved one to store all her legal documents in one place that the two of you can access.
• Keep a signed copy of every legal document for yourself and your loved one’s attorney.
• Provide a copy of the will to the executor and copies of the durable powers of attorney to the designated agents.
• Send copies of the durable power of attorney for health care and living will to your loved one’s primary care physician and other medical personnel involved in her care, whether at home, in a hospital, or in a residential care facility.
• Ask your loved one to write down her preferences for funeral, burial/cremation, and memorial arrangements in as much detail as possible.
• Check to be sure your loved one has drawn up a letter of instruction to address any issues not covered by other legal documents.

I’ve touched on several of these items already, and look forward to expanding on the others in future blogs.  If there are specific items in here that I’ve not covered or you’d like to know more about, please let me know.

Hard to believe that there could be a document more important than a will, but there is one.  Its called a Power of Attorney and it gives someone the legal authority to handle certain matters in the event a person does not want to handle them on their own.  Let's say that an elderly father is having difficulty managing and keeping up with his monthly expenses.  He might "give" a Power of Attorney to his daughter to write checks out of his account and pay his bills.  In this example, the father is the "principal" and the daughter is the "agent" or "attorney-in-fact".  The authority provided under a Power of Attorney can be fairly limited, as in the example above, or fairly significant, such as providing someone with the authority to make gifts, negotiate securities and real estate, or transfer funds. 

You might have also heard the term "Durable Power of Attorney".  A regular Power of Attorney is used when the principal is still competent and is usually given out of convenience.  The power provided under a regular Power of Attorney is revoked should the senior become incapacitated.  To prepare for the possibility in the future that the principal may not be competent due to disability, incapacity, or the normal aging process, they should provide someone now with a Durable Power of Attorney.  This document provides an attorney-in-fact the ability to manage some or all of their affairs should the principal become incapacitated or incompetent and remains effective until they pass away.
 
As an adult child and caregiver, it will be important to ensure that your parent has a Durable Power of Attorney.  In the absence of one, a court would appoint a guardian to manage the incompetent person's affairs.  This process can be expensive, time consuming, and to some it can be humiliating.  So, as is the case with other legal documents I’ve discussed, plan for the future now so you and your parent have the peace of mind that all of their affairs will be taken care of in their best interest and consistent with their wishes.  You should consult with an eldercare lawyer to be sure that all state-specific legal requirements are met (for example, it may be necessary to have more than one durable power of attorney if your parent has assets in a number of states).   At a minimum, Powers of Attorney documents name the person granting the authority, the attorney-in-fact, an alternative attorney-in-fact, the list of powers to be granted, the terms and circumstances of the power granted, and the signatures and seals as required by each state.  Most major financial institutions have their own forms for power over certain accounts, so be sure to coordinate your efforts with any banks or brokerage firms.

One of the most important steps you can take as a caregiver for an aging parent is to check to see if they have key legal documents in place and up-to-date to ensure that they are taken care of properly, their affairs are being handled, and their assets are distributed according to their wishes.  In the next several postings, I’ll cover key considerations as you locate, review, and help maintain your parent’s will, power of attorney, advance directives, and other key related documents. 

A will essentially spells out how your parent’s finances and property will be distributed after they pass.  If your parent doesn’t have a will, you should contact an elder law attorney to help your parent prepare one (you can easily locate a lawyer through the National Academy of Elder Law Attorneys, www.naela.com, or check with your state or local bar association for references).  There are numerous generic forms that you can find on the Internet and complete on your own.  However, doing so could increase the chances that the will may not fit certain key state-specific requirements or would be too general to interpret (thus, risking the possibility it could be declared invalid).  Also, you want to be sure that a will properly accomplishes your parent’s goals and objectives.  In the absence of a will, your parent’s property would be distributed by a court and their estate would be closed by a court-appointed individual who would likely charge a hefty fee. 

Once your parent has a will, you’ll need to be sure that the will is kept in a safe place, determine whether there are any amendments to it over time, and identify any related documents (like a letter of instruction).  If the will and other important documents are kept in a parent’s safe deposit box, be sure that you have access to it.  You may also want to find out if there are assets that are being held outside a will’s purview, such as those that are held jointly or in a trust.  Finally, wills should be updated every 3-4 years so that the terms of the will meet your parent’s interests regarding their estate, especially if there have been significant life changes since the last time you reviewed the will, such as the birth of a new grandchild, death of a spouse, purchase of real property (like a time share), or a move to a different state.

As an adult child taking care of your aging parents, taking these steps now will save you and your family considerable time and will avoid confusion, stress, and expenses down the road.  Check back soon and I’ll discuss the ins and outs of a durable power of attorney.