North Carolina Estate Planning Blog : North Carolina Estate Planning Lawyer & Attorney : Trust Counsel, PA : Trust Administration : Serving Chapel Hill, Durham, Raleigh, Pittsboro, Orange County, Chatham County

The Health Care Reconciliation bill sent to the Senate today includes a new 4% medicare tax on investment income, which includes IRA distributions, interest income (including tax exempt), dividends, capital gains, rental income and oil royalties.  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.

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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.

 

 

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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.

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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.

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Check out the Family Care Naivgator from the Family Caregiver Alliance.  North Carolina's page is here.

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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.

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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.

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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!

 

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Listen to this Podcast on the ElderLawAnswers website.

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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.

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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:

• Keep the originals at home in a place that your Health Care Agent knows about.
• Provide a copy to your Health Care Agent, physician and hospital.
• Register the documents with one of these services:

                     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.

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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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Thanks to a client of mine for providing this cartoon!

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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

The guidelines represent decades of cooperation between physicians and lawyers aimed at improving their inter-professional interactions in medical litigation. This relationship dates back to 1956 when the NCMS and the NCBA adopted the original Medico-Legal Code, which has been referred to as the Medico-Legal Guidelines since 1991.

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.

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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).

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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).

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I read in the paper this morning about the case of Janet Rivera, a comatose 46 year old California woman.  A heart attack two years ago caused the condition. The Fresno County Public Guardian's office, who is serving as her guardian, had life support withdrawn on July 11, but Rivera's family was able to get the court to order temporary support until a hearing a hearing schedule for tomorrow.  Five physicians have opined that Rivera will never recover.

Just like with Terry Schiavo, there are many groups weighing in on the case, but regardless of which side one might take, the important message here is for one to make one's wishes about such things known in advance, preferably in writing in the form of a valid Living Will.   Doing so could help avoid a great deal of expense, and more importantly anguish on the part of family members and others involved.

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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.

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Today is National Health Care Decisions Day. I personally encourage everyone who is at least 18 years of age to have a Health Care Power of Attorney and Living Will (also known as Advance Directives).  These documents will help ensure that your wishes, and not someone else's, will be followed should you be in an end of life situation and unable to communicate.

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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.

 

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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

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A committee of the North Carolina House approved a bill changing the Declaration of a Desire for a Natural Death (Living Will) and Health Care Power of Attorney laws and the statutorily approved forms.  The bill was passed by the Senate in May.  The next step is study by the House Judiciary Committee.  I haven't had a chance to review the bill yet, but hope to opine on it once I do. Continue Reading...

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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?

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Why make sure you and your loved have signed authorizations allowing family members access to medical records?  Here's a good example.  Although this story takes place in Massachusetts, HIPAA is a federal law, and similar problems can arise in any state.  I recommend that all of my clients execute HIPAA Authorization Forms.  See my posting on HIPAA.

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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.

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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.

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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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