Posts tagged ‘elder planning’
Is elder planning just for the elderly?
The very term ‘elder planning’ would seem to define the scope of its reach, on first blush. But if we consider exactly what comprises effective elder planning, I propose that there are many aspects that apply regardless of age.
I use elder planning in general to refer to the analysis, goal-setting and implementation of strategy to plan for life’s various needs as one ages, particularly as these needs intersect with areas of the law. Simple elder planing will address, at the very least, creation of an estate plan, and organization of assets in such a way to plan for the appropriate care a person may needs as he or she ages. More advanced planning involves sophisticated structuring of assets, which often includes both estate planning (e.g. planning for disposition of one’s estate after death) and planning during life (e.g. the creation of a living trust – either revocable or irrevocable – to shelter assets for one reason or another).
A VERY important – I cannot stress how important – part of an estate plan is the most simple. It is this incredibly simple planning that all adults – regardless of age, health, financial status, etc. – should put in place and update on a regular basis. This simple planning is the part of elder planning that is not just for the elderly.
The three documents I’m referring to are a general power of attorney, a power of attorney for health care, and a living will. I refer to these documents by the names most commonly used in Tennessee, which is my jurisdiction of practice. Other jurisdictions may use different names, but the purposes are the same or very similar. I cannot overstate the difference these three simple documents can make for a family faced with managing the life and healthcare of a suddenly disabled person.
A general power of attorney gives the person you name in the document (your ‘attorney-in-fact’) the ability to make all business, financial, property and other non-healthcare related decisions on your behalf, in the event you’re unable to do so. Why is this important? Consider this scenario: A 32-year-old father of three suffers life-threatening injuries in a car accident. While he is hospitalized and unconscious, his wife discovers that many of her husband’s business accounts are in his name only. For this reason, she’s unable to pay bills timely from these funds for her husband’s business, which leads to serious financial problems both for the business and this family. Had her husband executed a general power of attorney naming his wife, she would be able to take care of all financial matters related to his business without legal action (e.g. establishing a conservatorship), thereby avoiding this unfortunate effect of his accident.
Likewise, a power of attorney for health care gives your attorney-in-fact the power to make all of your healthcare-related decisions in the event you’re unable to do so. Almost every married couple I’ve worked with in estate planning asks me the same question, “We’re married. Why would I need to give my husband [wife] power of attorney for health care?’ The answer is simple: health care providers are bound by ethical and legal regulations which can prohibit them from disclosing medical information to anyone but the person being treated. And while medical professionals must honor the wishes of the person being treated, if that person can’t speak for herself, the professional is obligated to do what he or she believes is the ‘right’ thing to do given the circumstances. This may or may not be what the patient, or the spouse, would choose. The only way to insure that your proxy’s voice is heard if you can’t speak for yourself is to give them your power of attorney for health care.
A living will works in conjunction with a power of attorney for health care. This document sets forth your wishes for care in the event your condition is deemed imminently terminal. In Tennessee, the following language is used, ‘If at any time I should have a terminal condition and my attending physician has determined there is no reasonable medical expectation of recovery and which, as a medical probability, will result in my death, regardless of the use or discontinuance of medical treatment implemented for the purpose of sustaining life, or the life process, I direct that medical care be withheld or withdrawn, and that I be permitted to die naturally with only the administration of medications or the performance of any medical procedure deemed necessary to provide me with comfortable care or to alleviate pain.’
Medical professionals are obligated to follow your wishes as set forth in the living will, and if you’re unable to communicate, your attorney-in-fact for healthcare decisions is obligated to do so on your behalf.
Very few of us who are yet to be considered ‘elderly’ think that these documents can be of any use to us. But unforeseen events happen. Young people become disabled. Having these three simple documents in place can ease the work ahead for your family, in the event you become unable to make decisions for yourself. In Tennessee, a conservatorship (a legal action whereby the court appoints someone to manage your care, with court oversight) is generally required if a disabled individual hasn’t executed power of attorney documents. (More information about the conservatorship process in Tennessee will be the topic of an upcoming blog entry.)
Of course, putting in place an appropriate will document and taking steps to manage assets in preparation for care when you’re elderly are important, as well. But it doesn’t get much more simple than signing the three documents I discuss above, and the expense is minimal – typically between $100 – $200. Considering that a conservatorship action costs many times more, and takes time to establish, this investment yields an excellent return in the event of disability.
Make it a new year’s resolution. Do a little elder planning while you’re young.
