A common misconception is that elder law attorneys are used primarily by senior citizens. Although elder law attorneys can assist with crisis Medicaid planning and present eligibility for Veterans’ Benefits, they can also help younger individuals make a plan in advance.
The “Sandwich Generation”—today’s 10 million baby boomers who care for both their own children or grandchildren and elderly parents or relatives—may need to take a different approach to estate planning. New research shows approximately 15% of baby boomers contribute financially to care and living expenses for their elderly family members. The average life expectancy is only going up and many seniors will outlive their savings. When caring for aging parents, particularly when it includes financial contributions, estate planning should include consideration of the parents’ eligibility for Medicaid long-term care coverage, Veterans benefits, the caregivers’ access to medical records, the caregivers’ authority to make medical and financial decisions for the parents, and possibly guardianship.
Memory loss comes in many forms. From mild cognitive impairment and dementia, to the severe effects of advancing Alzheimer’s, the number of senior citizens affected by memory impairments is only going up. 1 in 5 Americans over the age of 70 are afflicted by some type of memory loss. Families often recognize the importance of advanced estate planning when thinking of retirement for aging Americans with a growing rate of memory impairment. However, seniors may avoid discussions about retirement planning because they are concerned about losing their independence – both financial and otherwise. By meeting with an estate planning attorney in advance, individuals can take the steps needed to help preserve the independence that most fear will be lost as they age.
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North Carolina health care directives and powers of attorney are required in order for another person to make decisions about an individual’s medical or financial matters. As with most North Carolina estate planning and elder law tools, there is not just one way to prepare the necessary documents. Out of the options for advance directives and health care powers of attorney, which is better? Statutory forms or the Five Wishes documents?Divorce at any age involves the sensitive matter of splitting assets and debt. For couples who divorce in their senior years (coined a “gray divorce”), not only are a lifetime’s investments subject to division, but the costs of long-term care (LTC) also become an even more important consideration. If an individual’s retirement account was compromised or investments drained by their spouse, separating and divorcing as a senior citizen may become emotionally and financially devastating.
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The Raleigh News & Observer recently commented on the surging insurance rates for long-term care insurance (LTCI) policies in North Carolina, the article for which can be read here. Yet it seems that an increased prevalence of premium hikes isn’t the biggest concern that LTCI policyholders in North Carolina might face.
LTCI partnership policies provide asset protection for policyholders who use up their plan benefits, increasing the amount of non-countable resources that the insured can retain and still receive Medicaid by the amount of LTCI benefits he or she uses. Thus, if the insured requires care beyond the benefits period provided by the LTCI plan, the state will disregard the insured’s assets dollar for dollar by the amount the LTCI policy spent during the benefits period. This feature makes partnership policies seem like an attractive option for many people as it allows them to become eligible to receive Medicaid benefits without first having to spend down their assets to the minimum amount permitted by North Carolina’s Medicaid program.
However, while many might be tempted to seek out an LTCI plan to take advantage of this treatment of assets for Medicaid, potential policyholders should be aware of North Carolina’s distinct treatment of LTCI plans for Medicaid estate recovery purposes. North Carolina statute defines “estate” for decedents who have LTCI partnership policies as “including assets conveyed to a survivor, heir, or assign of the deceased individual through joint tenancy, tenancy in common, survivorship, life estate, living trust, or other arrangement” (N.C.G.S. § 108A-70.4). Thus, unlike Medicaid recipients who did not hold LTCI partnership policies during life, the estate subject to recovery includes interests transferred to third parties during the decedent’s life as well as real and personal property passing to heirs through state probate law, either under a will or through intestacy. North Carolina residents contemplating purchasing an LTCI policy might want to consider the risk to lifetime property transfers that the policy could pose before committing to an LTCI plan.
The IRS has released the 2013 inflation-adjusted amounts for Health Savings Accounts (HSAs). The tables below show the values for 2012 and 2013.
High-deductible health plan: A health plan that meets certain requirements regarding deductibles and out-of-pocket expenses:
*Annual deductible contribution limit: For 2012 and 2013 the maximum deductible contribution to an HSA is as follows:
Source: 2013 data from IRS Revenue Procedure 2012-26
I recently met with a loving grandson, who needed some advice regarding his grandmother. His grandmother currently lives in another state. She was recently diagnosed and treated for cancer, but in the process was also diagnosed with dementia. She moved into an assisted living facility after her cancer surgery, and is not likely to move back home. Her only child lives here in North Carolina, and so a move to a North Carolina assisted living facility is likely the next step.
The grandmother does not have much income or assets, so paying for her care is a top concern. Before we could truly discuss options and develop a plan, though, I would need a more accurate picture of her finances. While I would need to meet with the grandmother personally to determine her legal capacity to make decisions and sign documents, I suggested that she have Powers of Attorney in which she designates who can make financial and medical decisions for her. The grandson mentioned his grandmother is hesitant to give up control, and that she’s been expressing fear and distrust lately where there was none before, possibly resulting from the dementia. He asked what happens if she doesn’t sign one, then declines to the point she can’t sign one, and the facility decides she needs someone to make decisions for her. I explained that guardianship – the court process of determining someone incompetent and appointing a decision-maker – might become necessary.
Then the grandson said, “Okay, well, do you have any tips on how to talk to her about this? How to start the conversation?”
Continue Reading...AARP has come out with a Long Term Scorecard, which ranks each of the 50 states and the District of Columbia on "Long-Term Services and Supports for Older Adults, People with Physical Disabilities, and Family Caregivers."
Unfortunately, North Carolina ranks in bottom 50%, at number 24 for 2011. However, NC does have a higher rating than all other southern states except for Virginia. Hopefully in coming years North Carolinians and their elected officials will work to improve our offerings to those in long-term care and their families. If you can't wait - move to Minnesota - it's ranked number one!
To help increase awareness of the importance of having up to date health care legal documents (Health Care Power of Attorney, Living Will and HIPAA Authorization), TrustCounsel is offering all three documents for $50 today and tomorrow (September 29 and 30) to North Carolina residents through OurLocalDeal.
Today is National Health Care Decisions Day. Take charge of your future - talk to family, your doctor and your estate planning attorney about your wishes. Everyone age 18 or over should have a Health Care Power of Attorney, Living Will, and Authorization for Use and Disclosure of Protected Health Care Information (HIPAA Authorization). When my kids turned 18, I made sure they each had a complete estate plan, including these documents.
Health care reform doesn’t come cheap. How do we pay for it? More and increased taxes, of course, both this year and in future years, along with certain credits for health insurance premium costs. This is an outline of the many tax law changes as a result of the new health care laws, organized by affected parties and implementation date:
Individuals:
· Starting in 2011
o Over-the-counter medications are no longer qualified expenses for Flexible Spending Accounts, Health Savings Accounts, or health reimbursement arrangements
o 20% penalty for nonqualified distributions from Health Savings Accounts, up from 10%
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Yesterday I attended a presentation by attorney Martin Shenkman, whose wife has multiple sclerosis - he regularly speaks on planning for those with chronic illness. He offered the use of his materials to the attendees, and this is one of his memos:
1. Important. 120 million Americans are living with chronic illness. Don’t underestimate or ignore the tremendous impact on a large portion of your client base. Every legal document, plan, etc. has to be tailored to address chronic illness. Standard documents and planning will often not protect the person living with chronic illness.
2. Income Tax Issues.
a. Can the client claim a parent or other loved one confined to a nursing home as a dependent?
b. Are the costs the client is incurring for qualified long-term care, including nursing home care that is deductible as medical expenses? What planning can be done to maximize the deductions?
c. What affirmative steps can a client take to enhance the likelihood that certain expenditures will qualify as deductible medical expenses for tax purposes? How can the client corroborate that an otherwise personal expense is for medical care? What is the taxpayer’s motive or purpose for incurring the expense? Has a physician recommended the item or expense to treat a diagnosed medical condition? Has this been confirmed in writing? Can the taxpayer establish that the item would not have been bought but for the disease or illness? IRC Sec. 213(d); INFO 2009-0209.
d. Payroll taxes for in home aides can be a nuisance. Proposed regulations may permit home care service recipients to designate an agent to report, file, and pay all employment taxes, including FUTA. See Prop. Reg. 31.3504-1; REG-137036-08.
e. Standard deduction for taxpayers who are legally blind may be higher.
f. Gross Income may exclude certain disability-related payments such as Veterans Administration disability benefits, and Supplemental Security income.
g. Impairment related work expenses of an employee who has a physical or mental disability limiting their employment, may be deductible business expenses in connection with their workplace. The expenses must be necessary for the taxpayer to work.
h. A credit for the elderly or disabled may be available. This credit is generally available to certain disabled taxpayers who are younger than 65 and are retired on permanent and total disability.
i. Earned income tax credit EITC is available to disabled taxpayers as well as to the parents of a child with a disability.
j. Dependent care credit taxpayers who pay someone to come to their home and care for their dependent or spouse may be entitled to claim this credit. There is no age limit if the taxpayer’s spouse or dependent is unable to care for themselves.
3. Insurance. Evaluate existing life insurance policies. Identify and evaluate all planning opportunities which may include: accelerated death benefit options; borrowing against cash value to fund needed expenditures; viatical settlements; possible sale into the secondary market versus cash surrender value (CSV).
4. Disability. Identify and address all aspects of disability planning which is often more diverse and complex then clients realize. Advise the client as to the tax status of insurance paid for personally versus insurance paid for from a business. For private disability insurance does the client have a residual versus total disability? Have the calculations been made correctly? There are often a myriad of assumptions in the calculations that integrate policy terms, accounting concepts and tax definitions. These will often require an analysis of earnings and business expenses realized by the client over a base period that may not conform with annual tax returns. Check insurance company calculations. The definitions of “disability” and “income”, etc. will often be different under disability income replacement policies, business overhead interruption insurance, disability buyout insurance and employment or shareholder agreements. Review all contractual arrangements that apply to the client and endeavor to develop a consistent, yet accurate set of calculations for each.
5. Expenditures. Clients with chronic illnesses or with loved ones with chronic illnesses may face unique budgeting issues that other clients don’t. Standard rules of thumb, which many investment advisers use, might not be reasonable. Assist the client in preparing reasonable projections that might address their unique situation. Then review with the client and the client’s attorney the revocable living trusts (clients facing significant health issues, especially progressive illnesses should have trusts) and durable powers of attorney to address these expenses to assure that the fiduciaries have both the authority and guidance to address them. This will also require that the fiduciaries have authority to access medical records that may be necessary to evaluate the appropriateness of certain bills. HIPAA is the affectionate acronym for the Health Insurance
Portability and Accountability Act of 1996 (Pub. L. No. 104-191, 110
Stat. 1936 (1966)); 45 C.F.R. Sec. 164 (2002).
Special expenses may include:
a. Shortened work expectancy.
b. Costly improvements to make their home accessible.
c. Costs of having an independent Social Worker periodically meet with the client in his or her home and interview them and issuing a report. This can be invaluable in assuring proper care.
d. Using an institutional trustee and paying the fees involved.
e. Paying for experimental medical treatments which insurance won’t cover.
f. Paying for desired accommodations and living arrangements.
6. Settlement Suit. Income taxation of settlements is important to address pro-actively, preferably prior to settlement. Suits against an employer or partners for
discrimination, damages, back wages, are common and the amounts must be allocated to each tax category as the tax impact can be significant. Legal fees may be deductibility and the AMT trap that would otherwise eliminate a deduction avoided. IRC Sec. 62(a)(20) may permit deduction against adjusted gross income (AGI).
7. Investment Planning. Tailor an investment plan in light of the client’s specific circumstances, not generalizations or assumptions. Each chronic illness differs from other chronic illnesses. Each client’s experience is unique to that client. Client’s can have varying experiences over time. Risk profile and time horizon is not the same as for “other” clients. Risk may be affected by fear, medical costs, or need to retire early. The time horizon can vary – new drug therapies can change the course of the disease.
8. Client References. Refer clients to IRS Publication 3966, Living and Working with Disabilities, and IRS Publication 907, Tax Highlights for Persons with Disabilities.
From guest author Raymond Lavine:
Many senior citizens freely admit that they fear growing older more than they fear death. The prospect of becoming increasingly frail and dependent in a society which worships strength and self-reliance, and of losing family and lifetime friends can understandably make the specter of old age a frightening one.
Does senior-care have to be a time of physical failing and emotional loss? Of course aging brings physical deterioration, and time brings the loss of loved ones, but senior-care can still bring growth and new awareness. Those who are emotionally, financially, and socially ready to take on the challenges of aging are the ones for whom senior care will actually bring happiness.
Baby-Boomers, and those who are following us, find that we and our families are in denial about the fact that we are growing older. This denial is counterproductive, and if you are in that situation, you have the right to confront your loved ones with the fact that you need to make plans for your later years.
There are many aspects of home care or senior living which will require input from your family; where you will live; who will manage you finances should you become unable to; and who will be responsible for seeing that you get proper medical care an transportation if you need it. If you are going to live with one of your children, clarify what you expect of the other children so that there is no resentment from the child with whom you live, who may feel overwhelmed.
The quality of your senior living will depend to a very great degree on the communicating you do with your family ahead of time. Making sure in advance that your housing, finances, medical, and social needs will be met will not only relieve you of a tremendous burden; it will bring you and your family closer together so that your years of senior care will be pleasant and enjoyable.
Senior planning also means working with your financial planners; wealth managers; attorneys; and accountants. Owning long-term care plans is helpful to provide money for long-term care needs but this and other insurance need to be coordinated with your over-all estate and financial planning.
You have goals during your working and family career and it is essential to plan your goals for your senior years. There are many talented and knowledgeable people who will assist you with planning so that fear and denial turn into positive and meaningful goals and objectives.
And let us not forget the elder advisors: attorneys; wealth managers; financial planners, accountants, mediation services, and fiduciary services; elder care workers; and transition specialists.
The U.S. News and World Report has issued a report on the best nursing homes in America. From the website: "All of the homes shown received 5 stars, the highest overall rating, from the federal government's Centers for Medicare and Medicaid Services. A facility's overall rating is geared to its performance in health inspections, nurse staffing, and medical care. Homes are ranked in tiers according to their star ratings in the three individual areas. Within each tier, the order is alphabetical."
Here's the list for North Carolina.
I'm at home today, sick with the flu. Last night was rough, fever, chills, cough, and inability to sleep, but I feel a bit better right now. However, during the worst of the night, a thought came to mind that it might actually be a relief if my mortal existence ended. Not that I really wanted it to, but it made it easier to imagine truly feeling that way in the event of a painful terminal illness.
As I often say, estate planning involves sometimes difficult discussions. This post is no exception. This morning I thought to myself, that while I by no means wish to die any time soon, if the time came now, I am ready in many respects:
So, while I hope the rider on the pale horse does not appear on the horizon for me for a few decades, if he comes I will know I have prepared the best I can.
Giving someone your power of attorney (POA) has been likened to giving a trusted person a spare set of keys to your house or car. If a problem arises -- for example, you lose your keys -- your interests are protected. Otherwise, you're still in control. And just as you can take back your spare set of keys, you can also revoke a power of attorney.
Basically, a power of attorney gives someone the legal ability to act on your behalf in ways you specify. Obviously, you should only give this power to a person you have complete confidence in, such as your spouse, adult child, or trusted attorney. A POA can be as simple as giving your child the legal authority to pay your bills and endorse your checks if you are no longer able to do it. Or it can be more detailed, such as enabling your child to pay the bills and sell a parcel of real estate that you own.
Different Types of POAs
If you're considering granting a power of attorney, here are the basic types available:
General power of attorney - This grants a wide range of powers to act on your behalf -- basically, to do whatever you can do. In the event that you became incompetent or incapacitated or pass away, the POA would automatically be revoked. Because of the sweeping nature of this power, it should be used sparingly.
Health care power of attorney - This authorizes another person to make medical decisions on your behalf and remains in effect even if you have become mentally incapacitated. This type of authorization must be signed in front of witnesses and notarized in order to be valid. The agent (sometimes called the attorney-in-fact) that you appoint must be an adult, and cannot be a person who is paid to provide health care to you. As with other forms of POAs, you can specify the decisions you are authorizing your agent to make, or give them the same authority you have to make decisions for yourself.Special power of attorney - As its name implies, a special POA gives your agent power to act only in specific situations. For example, let's say you need to travel for a long period of time when certain matters need to be concluded at home, such as selling your car.
Springing power of attorney - A springing POA is an instrument that can be written so that it takes effect only if you become incapacitated. You need to be very clear when defining what circumstances will trigger a springing POA.
Durable power of attorney - A durable power of attorney can remain in force even if you become incompetent or incapacitated. This POA generally requires that a family member or close relative be appointed as your agent. It differs from a general POA in that it conveys limited powers to the agent and can be put in place for longer periods of time. It can be desirable for some individuals to separate the duties granted by durable POAs into two types --
medical and financial responsibilities. For example:
A Durable Financial POA Can Take a Load Off Your Mind
Here are some of the duties you can authorize your agent to handle with a durable financial POA:
- Pay bills and the bills of your family, using available assets.
- Pay real estate taxes, maintain your home and buy or sell real estate.
- Manage retirement funds.
- Make decisions necessary to operate your business.
- Calculate, file returns and pay your taxes.
- Buy or sell insurance.
- Handle banking and investing money and collecting government benefits, such as Social Security.
1. A durable medical POA (Health Care Power of Attorney) authorizes an agent to make health care decisions. You can give your agent the same authority to make decisions as you have yourself, or you can limit the authority. This POA becomes effective when a doctor states in writing that you're not able to make your own medical decisions. You may want to include an advance directive (living will), which states your wishes concerning life support, if it becomes necessary.2. A durable financial POA names an agent to carry out your financial responsibilities described in the right-hand box. This type of POA can save your family lots of money and avoid many problems if you become incapacitated.
When Does the Power End? A durable POA ends automatically upon your death. So if you wish to have your agent also wind up your affairs after your death, you need to create a will and name that person as your executor. A durable power of attorney can also end if:
You are mentally competent and choose to revoke the POA.
A court concludes that you signed the authorization while you were incompetent, under undue influence, or a victim of fraud, and therefore renders the POA invalid.
The agent you choose is unavailable, unless an alternate is named.
You get a divorce. This applies if your spouse is your agent and you live in one of several states where a divorce automatically terminates the POA.
If You're Married: Your spouse has some authority over property that you own together. He or she can pay bills from a joint account and manage investments in a jointly owned brokerage account. But in most states, including, North Carolina, spouses are limited in their abilities to buy or sell co-owned property without consent of both parties. And if any property is in your name only, your spouse generally has no legal authority to act without a durable power of attorney.
Getting Your Ducks in a Row
Whether young, middle-aged, or approaching the golden years, everyone needs to give some thought to the future. Obviously, the need increases as you get older. An arrangement such as a power of attorney is a simple way to smooth out bumps before they arise. Contact your attorney to learn more.
Source: TrustCounsel's January eNewsletter from BizActions.
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You or someone you love may be ready for a retirement community living arrangement, which typically includes lifetime residential accommodations, meals, and some degree of medical services. These facilities can be quite expensive. The good news: Unexpected tax write-offs may help offset the cost.
The tax-saving idea is that you may be able to deduct part of the retirement community's one-time entrance fee and ongoing monthly fees as medical expenses on your Form 1040, regardless of your current health status. Since the fees we are talking about here can be quite large (see right-hand box), meaningful deductions may be possible despite the limitation on medical write-offs. (You can only deduct medical expenses to the extent they exceed 7.5 percent of your adjusted gross income.)
Court Decision Shows the Way
For recent proof that substantial deductions are possible, we can point to a 2004 Tax Court decision. Source: Delbert L. Baker v. Commissioner (122 TC 143 (2004). In 1989, Delbert Baker and his wife bought into a resort-style retirement community. It provided four living arrangement categories:
The Bakers paid a one-time entrance fee of about $130,000 plus monthly fees of over $2,000 in exchange for lifetime residential and medical care privileges for both spouses. (This was back in 1989. Today's prices would be much higher in many areas.)
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Most people who execute living wills, health care powers of attorney and other advance directives express their desire to not have their lives prolonged if terminally ill or in a persistent vegetative state.
However, there are some who believe that all or many measures should be taken to prolong their lives. The North Carolina statutory documents are not really designed for this purpose. Thanks to a client, I recently discovered the "Will to Live" Durable Power of Attorney, which is designed for persons who want to be kept alive by artificial nutrition hydration and nutrition, as well as other life-prolonging measures under most circumstances.
This document does meet the NC statutory requirements. Just as with the standard living will, I would encourage those who are interested in using it to discuss it with both their physician and their estate planning attorney.
Genworth recently conducted a survey of the Cost of Care in North Carolina (Home Care, Adult Day Care, Assisted Living and Nursing Homes). There are comparisons of the U.S. and NC as a whole, along with the largest metro areas in the state.
The website of the North Carolina Medical Board contains many Position Statements, including one on Advance Directives, a portion of which is quoted below:
"It is the position of the North Carolina Medical Board that it is in the best interest of the patient and of the physician/patient relationship to encourage patients to complete or authorize documents that express their wishes for the kind of care they desire at the end of their lives. Physicians should encourage their patients to appoint a health care agent to act through the execution of a Health Care Power of Attorney and to provide documentation of the appointment to the responsible physician(s)."
and one on Pain Management and End-of-Life Care:
"The Medical Board will assume opioid use in such patients is appropriate if the responsible physician is familiar with and abides by acceptable medical guidelines regarding such use, is knowledgeable about effective and compassionate pain relief, and maintains an appropriate medical record that details a pain management plan." and
"The health care team should give primary importance to the expressed desires of the patient tempered by the judgment and legal responsibilities of each licensed health professional as to what is in the patient’s best interest. "
Those with an interest in these issues would be well-advised to read the Position Statements and discuss them with their physicians.
I recently gave a presentation on the Legal and Contractual Aspects of Continuing Care Retirement Community (CCRC) Agreements. The talk was very popular - I planned for 40 attendees and over 140 came! I thought others might be interested in the topic - click here for the presentation handouts, which include a comparison of several local CCRCs in which I have clients.
Note: As of June 17, 2010, the handout to which I have linked contains a few corrections to the Carolina Meadows information, courtesy of Liz Rossi of Carolina Meadows.
2010 marks the 20th Anniversary of the enactment of the Patient Self-Determination Act, and April 16th, 2010 is the Third Annual National Healthcare Decisions Day.
So, make sure that you, your family and friends all have up-to-date Health Care Powers of Attorney, Advance Directives (Living Wills) and Authorizations for Use and Disclosure of Protected Health Care Information (HIPAA Authorizations) It's also important to talk your doctor and family about your wishes.
In addition to attorney-prepared health care planning documents like Health Care Powers of Attorney, Living Wills and HIPAA Authorizations, I often talk to clients about Do Not Resuscitate (DNR) Orders and the newer Medical Order Scope of Treatment (MOST) Form. These two forms can be obtained only from one's physician, and must be signed by the physician to be valid.
Laypersons often get Living Wills and DNRs confused, and many physicians are unaware of the MOST form. For those who are elderly or seriously ill, a conversation with one's physician about whether or not to use a DNR or MOST is in order. The North Carolina Medical Society's website contains quite a bit of information and sample forms.
The Health Care Reconciliation bill includes a new 3.8% Medicare tax on investment income, which includes IRA distributions, interest income (including tax exempt), dividends, capital gains, rental income and oil royalties.
Under H.R. 3590, there is also a 1% increase in the employee Medicare tax on all earnings. Taxpayers with income under $100,000 will benefit from partial exemptions.
Congress has promised the two new taxes are temporary (10 years or so)- but don't hold your breath.
For those who have been through a similar experience, this poignant article Letting Go of My Father, which details Jonathan Rauch's struggles in caring for his elderly father, will solicit empathy. For younger readers, it can provide a glimpse of things to come.
While the article does not cover the issue, the legal aspects of caring for an elderly relative can be greatly simplified by making sure a durable general power of attorney, health care power of attorney, living will and HIPAA authorization are in place early on. Once an elder becomes mentally incapacitated, it's too late.
Also, geriatric care managers can provide invaluable assistance, even when an elder is in facility, by monitoring health care, medications, etc.
Thanks to attorney Kathe Joyce for bringing the article to my attention.
On February 2, 2010, in Ododonnabhain v. Commissioner of Internal Revenue, the U.S. Tax Court held that a transgender woman's expenses for hormone therapy and sex reassignment surgery were medically necessary and therefore deductible for federal income tax purposes. The court found that "gender identity disorder" is a disease, and ruled that gender transition-related healthcare is non-cosmetic, medically necessary healthcare. However, expenses for breast augmentation were found to be cosmetic as the surgery did not treat the disease or improve bodily function, and therefore were non-deductible.
This posting is courtesy of attorney Marc Soss of Florida:
The aging demographics of the United States coupled with the Pension and Recovery Act of 2006 (the "PPA”) and Deficit Reduction Act of 2007 (“DRA”) have provided an excellent planning opportunity to create tax efficient vehicles to solve a clients’ long-term care planning needs. Beginning on January 1, 2010, a tax-free planning option will become available for individuals who desire to provide for long-term medical care by utilizing an existing annuity or life insurance contract purchased after 1996. While not a new concept (it dates back to 1997), the 2010 tax-free planning opportunity may be beneficial to an individual with a larger than needed life insurance policy death benefit, unaffordable monthly or annual premiums, an under-performing or matured deferred annuity contract, or the desire to incorporate long-term medical care into his or her estate plan.
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Carolina Donor Service will answer all your questions about organ donation in North Carolina. Also, don't forget that in a Health Care Power of Attorney you can give your agent the power to donate your organs.
Check out the Family Care Naivgator from the Family Caregiver Alliance. North Carolina's page is here.
Make Time to Create an Advance Medical Directive - I recently had the opportunity to hear a presentation by Bill Colby, the attorney who represented Nancy Cruzan's family in the right-to-die case that went all the way to the U.S. Supreme Court. Mr. Colby has written a book Unplugged: reclaiming our right to die in America, which I have purchased but have not yet read. If Mr. Colby writes as well as he speaks, it should be an interesting and information book.
A recent WSJ.com article discusses Advance Directives (Living Wills and Health Care Powers of Attorney) and their important role in end of life situations. I learned that Google now has a free online service for registering such documents.
North Carolina residents should be aware that NC has a statutory form for both an Advance Directive (Living Will) and Health Care Power of Attorney. Both forms were revised in October 2007, although the older statutory forms are still valid. Non-statutory forms may possibly be considered invalid if they do not meet NC's strict witnessing and notarization requirements.
President Obama is visiting Broughton High School in Raleigh today, and conincidently he recently stated in a discussion of health care reform that he and Mrs. Obama have Living Wills and consider them important. Hopefully they also have Wills, Durable Powers of Attorney, Health Care Powers of Attorney and HIPAA Authorization forms.
These are basic documents that every adult should have, whether age 18 or 88. An estate plan can help you maintain your dignity, protect your family, preserve your assets, and even save taxes!
Listen to this Podcast on the ElderLawAnswers website.
In this blog, mostly I write about taxes. Sometimes I write about death or politics. Often somber topics, but ones that will always be current. Here's an article from The Economist dealing with death, end-of-life decision making, and religion, so I now I'm adding that subject into the mix.
So, you've been a responsible adult and have recently completed your estate plan. As part of your plan, you have a Health Care Power of Attorney, Living Will, and HIPAA Authorization. Now what?
Here's what I recommend with regard to those documents:
Legal Directives, LLC - Annual fee, wallet card issued. Available through certain law firms at a reduced cost. Automatically provide copies to your physician if you wish.
Docubank - Annual fee, wallet card issued. Available through certain law firms at a reduced cost.
U.S. Living Will Registry - No charge, but must be submitted through a "Community Partner"
North Carolina Secretary of State - One time fee of $10 per document. The cheapest, but a "no-frills" version.
Registration is especially important for those who travel a lot. Folks who regularly spend extended periods in other states should consider having advance directives prepared for that state as well, taking care not to revoke the primary state's forms.
Nursing home coverage for veterans is available from two sources within the Department of Veterans Affairs -- the veterans health care system and the state veterans homes system.
Nursing Home Coverage through the VA Health Care System
Nursing home coverage along with other long term care services such as home care and assisted living as well as geriatric care management are available through the Veterans Health Administration for qualifying veterans.
In order to get into the veterans health care program, the veteran must have service-connected disabilities, or be below a qualifying income level or be receiving Veterans Pension income. Once in the system, veterans are not guaranteed long term care services, including nursing home care, unless they meet specific requirements. Here is a list of these requirements for nursing home coverage.
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MY LIVING WILL
Last night, my friend and I were sitting in the living room and I said to her,
'I never want to live in a vegetative state, dependent on some machine
and fluids from a bottle. If that ever happens, just pull the plug.'
She got up, unplugged the Computer, and threw out my wine.
She's such a bitch...
Thanks to a client of mine for providing this cartoon!
From the North Carolina Bar Association website:
The North Carolina Bar Association and the North Carolina Medical Society are pleased to announce the publication of their revised Medico-Legal Guidelines.
| CLICK HERE TO ACCESS REVISED MEDICO- LEGAL GUIDELINES |
Six substantive revisions have been incorporated into the 2008 Medico-Legal Guidelines, four of which apply to the proper release of mental health, substance abuse or psychotherapy records and notes. A listing of N.C. statutes pertaining to the disclosure of confidential or protected health information has been added, as has a sample court order for trial judges that allows medical providers to release mental health, substance abuse or psychotherapy records pursuant to federal law.
The guidelines are not intended to supplant, nor do they supersede, mandatory rules, laws or regulations, such as the Rules for Professional Conduct, the N.C. Rules of Civil Procedure or the N.C. Rules of Evidence. They are provided to help clearly define the responsibilities of physicians and attorneys, thereby promoting inter-professional cooperation and courtesy.
“These guidelines continue to serve a vital role in our efforts to promote collaboration between the North Carolina Medical Society and the North Carolina Bar Association,” said NCBA President Charles Becton. “We are grateful to the NCBA Medico-Legal Liaison Committee for its efforts in sustaining this important relationship between members of the medical community and the bar.”
“The Medico Legal Guidelines provide physicians much needed information concerning appropriate handling of many issues that arise in litigation involving our patients,” NCMS President Albert J. Osbahr, MD, said. “We appreciate the Bar Association’s ongoing commitment to ensuring these guidelines include updated federal and state laws and other important information.”
Members of the Medico-Legal Liaison Committee, myself included, are available to give presentations on the new guidelines to health care provider groups. Please contact me at ghgiddens@trustcounselpa.com for more information.Lawyers routinely prepare advance directives for their clients - in North Carolina the statutory form was previously called a "Declaration of a Desire for a Natural Death, "and is now just known as an "Advance Directive (Living Will)." Also used, to a lesser extent, is the "Advance Instruction for Mental Health Treatment."
I am often asked about the Do Not Resuscitate (DNR) form, and sometimes people confuse it with the Living Will advance directive. There is also a newer form called the Medical Order for Scope of Treatment (MOST). There are significant differences in these two forms and the Living Will. First of all, the yellow DNR and pink MOST forms are only available to and must be signed by physicians. The DNR and MOST are sometimes referred to as "portable" medical orders because patients can keep copies at home or on their person. The DNR contains an order to not resuscitate in the event of pulmonary or cardiac arrest, while the MOST form is much broader. It has sections dealing with cardiopulmonary arrest, medical interventions, antibiotics, and artificial hydration and nutrition, and describes the treatment(s) the patient may want or not want. The DNR and MOST are generally used only by elderly or seriously ill persons.
As I tell my clients, the DNR and MOST forms deal with acute situations, while the Living Will deals with chronic situations. Not everyone should have a DNR or even a MOST, but to round out a complete health care plan everyone should have a Health Care Power of Attorney, Living Will and HIPAA form (Authorization for Use and Disclosure of Protected Health Care Information).
From the most recent NAELA eNewsletter:
By Terri Tersteeg
Overview
After the conclusion of World War II, employer provided health care benefits had become commonplace and employees had come to expect the benefit as part of their overall employment package.1 By the mid-1950’s, almost seventy percent of Americans had health insurance through their employer.2 This phenomenon helped to create the impetus for Medicare for retirees. In 1965, the United States enacted Medicare which provided coverage for Americans aged sixty-five and older.
When Medicare was enacted, outpatient prescription drugs played a much less significant role in health care costs and treatment plans than they do now. Medicare provided only very limited coverage for prescription drugs – typically physician administered drugs in the inpatient setting.3 At that time, most other health insurance plans – employer and individual – did not cover outpatient prescription drugs. Over the years, that has changed and prescription drugs have come to play an important part in improving treatment outcomes as well as overall patient quality of life.4
By the late 1990’s, spending for prescription drugs was becoming the fastest growing segment of U.S. health care costs. According to a 2002 Congressional Budget Office (CBO) report, Medicare beneficiaries accounted for almost 40 percent of the increase in costs.5 As prescription drug spending by the elderly continued to increase, pressure grew for the addition of a prescription drug benefit to Medicare.
After an extended debate, Congress narrowly passed the Medicare Prescription Drug, Improvement and Modernization Act (MMA), Public Law No. 108-173, which President Bush signed into law in December 2003.6 The Medicare Modernization Act of 2003 (MMA) established a voluntary outpatient prescription drug benefit for Medicare participants. The Medicare Prescription Drug Benefit went into effect on January 1, 2006.7
The Medicare Prescription Drug Benefit, known as Part D Plans, is administered by private health plans that have been approved by the Centers for Medicare and Medicaid Services (CMS). Medicare and Medicaid beneficiaries in most states have access to the drug benefit through stand-alone prescription drug plans (PDPs) or multiple Medicare Advantage prescription drug (MA-PD) plans (similar to HMOs that cover all Medicare benefits including drugs).
Most North Carolinians know that when they renew their driver's license, they can indicate their desire to be an organ donor by having a red heart placed on the license. This alone is now sufficient to establish ones' intent to donate organs (but not tissue). Signing a donor card and placing one's name on a donor registry is also sufficient - no witnesses or separate verification is required.
16 and 17 year old drivers can also indicate their desire to be a donor, subject to a parent's right to override the minor's wishes.
The North Carolina statuutory Health Care Power of Attorney forms also contain a provision for granting one's Agent the authority to donate organs.
If one does not wish to be a donor, any recorded statement to this effect is legally sufficient to bar others from making a gift of one's organs.
N.C.G.S. 130A-412.3 et seq.
The North Carolina Legislature has revised (long overdue, in my opinion) the statutory Health Care Power of Attorney (HCPOA) and Declaration of a Desire for a Natural Death forms. The Living Will (LW) is now called "Advanced Directive for a Natural Death." Both forms offer more choices in terms of treatment options, etc., and allow one to designate whether or not the agent under the HCPOA can override the instructions in the LW.
Since these new forms are improvements on the old ones, I recommend that everyone execute a new HCPOA and LW, as well as a separate Authorization for Disclosure of Protected Health Care Information under HIPAA. These are important legal documents, so it's a good idea to consult with your attorney and physician prior to signing them. It is also important to make sure that the strict witnessing and notarization requirements are met.
North Carolina residents who wish to donate their organs after their death will now have more assurance that their wishes will be respected. For years, NC organ donors have been able to have a red heart placed of their drivers license to indicate their intent. Effective October 1, donors' intent will be legally binding, meaning that, theoretically at least, family members cannot override the decision.
However, I believe that the law will not always be respected when health care providers are faced with objecting family members. After all, they can file a lawsuit if they feel strongly enough, while the donor obviously can't!
See this article on Charlotte.com
This article is from the website of the National Care Planning Council.
Services from care managers should be something that every family takes advantage of, but in reality very few families use them. Care managers could go a long ways towards helping the family find better and more efficient ways of providing care for a loved one.
The concept is simple. The family hires a professional adviser to act as a guide through the maze of long term care services and providers. The care manager has been there many times. The family is experiencing it usually for the first time.
Hiring a care manager should be no different than hiring an attorney to help with legal problems or a CPA to help with tax problems. Most people don't attempt to solve legal problems on their own. And the use of professional tax advice can be an invaluable investment. The same is true of using a care manager.
Unfortunately there are too few care managers and the public is so poorly informed about the services of a care manager, that valuable resources that could be provided go lacking.
The irony of not using a care manager is that most families -- when given the opportunity to use the care manager -- think they can do it themselves and will not pay the money. Yet the services of a care manager most likely will save them considerably more money then do-it-yourself. The cost of the care manager might be only a fraction of the savings the care manager could produce. Care manager services can also greatly reduce family and caregiver stress and help eliminate family disputes and disagreements.
Even the Yellow Pages do not cooperate in helping the public find care managers. To find a care manager one must look in the Yellow Pages under "Senior Services". Who is going to know to look under that subject?
Continue Reading...The recent highly publicized disputes over of the disposition of the bodies of James Brown and Anna Nicole Smith has lead me make an extra effort to ask clients about their wishes for cremation and/or burial. The wishes should not only be communicated to family members, but reduced to writing to provide evidence should family members later disagree. Besides including the instructions in a Will, it may make sense to include them in a Health Care Power of Attorney.
In North Carolina, a person can only authorize his or her own cremation in a Will, Health Care Power of Attorney, Preneed funeral contract, offical cremation authorization form, or a written statement witnessed by two people. In other words, a simple note in one's own handwriting, with no witnesses, is not valid. Click "Continue Reading" to view the NC law on cremation authorization.
Continue Reading...In 2003 the U.S. Department of Health and Human Services finalized regulations under the Health Insurance Portability and Accountability Act of 1996 (“HIPAA”). Under HIPAA, medical providers can face sanctions and monetary fines for unauthorized release of “Protected Health Information”. As a result, medical providers are very reluctant to release records to anyone other than the patient.
What Information is Protected?
Under HIPAA, protected health information includes anything created or received by a “covered entity” relating to an individual’s physical or mental conditions or health care, and that could be used to identify the individual. Covered entities include health care providers, pharmacies, nursing facilities, and insurance companies, as well as other health care-related entities.
Since the definitions under HIPAA are so broad and, as a result, medical providers will not release information to anyone other than a patient, a complete estate plan should always include a HIPAA authorization.
How to Authorize Release of Protected Information
A traditional Health Care Power of Attorney (HCPOA) allows an individual to name an agent to make health care decisions when and if the individual is incapacitated and cannot make such decisions. Even if the document was prepared during or after 2004 and HIPAA release language is included, the authorization arguably does not become effective until the HCPOA becomes effective, thus limiting its utility. In addition, a stand-alone HIPAA authorization is now viewed as the preferred method per the regulations. Without a signed HIPPA authorization, even a spouse or adult child of an incapacitated patient will not be able to receive information on the patient’s condition.
HIPAA authorizations allow individuals to name specific people to whom medical providers may release records. An authorization should, at the very least, allow medical providers to release records to an individual’s agent under a HCPOA. An authorization may also include an agent under a Durable Power of Attorney, a trustee of a trust or an individual’s attorney for the purpose of determining incapacity.
Conclusion
If you would like to make sure that your family members will be able to access your medical records so that they make informed decisions on your behalf in the event of your incapacity, it is imperative to have both a valid HCPOA and HIPAA authorization. Have an estate planning attorney prepare the documents for you ensure that they are properly drafted and signed.
Continue Reading...Yesterday a client brought in a copy of this New Times Article by Jane Brody: Medical Due Diligence: A Living Will Should Spell Out the Specifics. As an elderly man, he was concerned that his wishes might not be respected under his North Carolina statutory living will. He was right to be concerned. North Carolina's standard form, entitled Declaration of a Desire for a Natural Death, contains only statements that "extraordinary means" for keeping one alive are not desired and allows a choice as to whether artificial nutrition and hydration should be withheld or discontinued. There are no provisions for more detailed instructions. In my opinion, the state should revise the form to allow much more specificity. Many states have such forms.
Because of the limitations of the North Carolina statutory form, I often provide clients with a "Medical Directive" which is designed to meet the requirements of NC law, but allows one to specify whether certain procedures or medications are desired or not. The Medical Directive is often used with the Living Will.
Finally, it is imperative that each person also have a Health Care Power of Attorney. The Health Care Agent can give direction to health care providers regarding end-of-life care.
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