Estate Planning When Faced with a Serious Illness

More young and middle-aged workers find themselves in the role of family caregiver.
Everyone needs estate planning documents, but a serious illness makes that need more urgent. 

More than 130 million Americans are living with chronic illness. Forbes’ recent article, “Estate Planning Musts When You Or A Or A Loved One Has A Chronic Illness,” says that if you (or a loved one) are living with a chronic illness, you’ll likely need the same estate planning documents most people should have.

The article discusses these key estate planning documents, along with some suggestions that might help you customize them to your unique challenges because of chronic illness. These documents need to be tailored to your specific needs, so you should consult your estate planning and elder law attorney about what works best for you.  It’s also best to put your estate planning documents in place soon after your diagnosis, so that you can return your focus to your health, family and well-being.

HIPAA Release. The Health Insurance Portability and Accountability Act of 1996 governs the requirements for maintaining the confidentiality of protected or personal health information (PHI). A HIPAA Release lets someone you trust access your protected health information.  This is an important estate planning document because it provides your decision makers with information about your condition so they can best serve your needs.

Living Will. This is a statement of your health care wishes and can address end of life decisions, as well as many other matters. If you’re living with a chronic illness, there are special considerations you might want to make in having a living will prepared. For example, you might explain your specific disease while continuing to address other health issues.  You can address the disease you have, at what stage and with what anticipated disease course, and how if at all these matters should be reflected. It is also critically important to discuss these wishes with your loved ones before the issue arises so they understand what you want.

Medical Power of Attorney. This is sometimes known as a medical proxy. It is an estate planning document in which you designate a trusted person to make medical decisions for you if you’re unable to do so. You can give guidance to your medical agent about your preferences, goals and concerns in your medical care.

Financial Power of Attorney. This estate planning document lets you designate a trusted person to handle your legal, tax, and financial matters if you can’t or if it becomes difficult to do so. There are some unique considerations for those living with chronic illnesses to consider. One is the amount of control that should be given up now or at what stage. Another key issue in a power of attorney is if you should sign a special power that restricts the agent’s authority to certain specified items or sign a general power that provides broad and almost unlimited powers to the agent.  It is especially importantly that your power of attorney include authority to handle Medicaid and other long term care benefits if you are facing a serious illness.

Appointment for the Disposition of Remains.  This is a basic estate planning document by which you choose a person to execute your burial wishes and let them know what those wishes are.

Declaration of Guardians.  This is an estate planning document in which you name a person to serve as a court appointed guardian should you need one.  If you have the other documents in place you’ll likely never need this, but it is important to have as a safety net naming someone you trust to be guardian instead of a court appointed agency or lawyer if the need ever arises.

Will and Revocable Trust. Finally, Wills and  Revocable Trusts are estate planning documents which control the flow of assets at your passing.  You should speak with your attorney about which is right for you, but if you or a family member has a chronic illness, using a revocable trust may be a good way to provide for succession of your financial management.  A revocable trust allows the successor trustee to act quickly to manage the finances if you cannot do so yourself and under the guidelines you create.  This way, the trustee can pay for the care you need.

Everyone should have these estate planning documents as part of a well-crafted legacy plan, but if you or a loved one is facing a serious or chronic illness, you may be facing additional challenges that make this planning more critical.

Reference: Forbes (July 5, 2019) “Estate Planning Musts When You Or A Or A Loved One Has A Chronic Illness”

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When You Need an Elder Law Attorney

An elder law attorney can guide you through the issues that affect us as we age.
An elder law attorney can guide you through the issues that affect us as we age.

The conversation that you have with an estate planning attorney, when you are in your thirties with a new house, young children, and many years ahead of you is different from the one you’ll have when you are much older. That’s the time to consult an elder law attorney. When you are older, you face a whole new set of issues, including rising health costs and the possibility of needing long term care. An elder law attorney knows that you are about to enter a time in your life when your estate planning documents are more likely to be used, says the article “Learn about legal documents and Medicaid” from the Houston Chronicle.

As we get older, the need to address long term care becomes more important. Elder law attorneys warn that there are many options that may be foreclosed if planning is not done ahead of the time. This is the time to talk to an elder law attorney to create a road map that anticipates the care you may require as you get older and how to pay for it. Making the right decisions now, could have a big impact on the quality of your life in the future.

This is also the time to update your financial and medical powers of attorney. Because of your experiences, there may be certain preferences you have for health care treatment. In addition, your elder law attorney may advise you to include a broad gifting power in your financial power of attorney which may be necessary to help you qualify for government assistance.

You should also review your other estate planning documents to make sure that they still reflect how you wish your estate to pass at your death. Your elder law attorney may suggest adding provisions to protect a surviving spouse’s eligibility for Medicaid or other government assistance in case it is needed.

It may be that your estate plan will include trusts, or that certain assets will need to be retitled. An elder law attorney can guide you through this stage of your life to make sure that you are prepared for what the future holds.

Learn more about elder law and medicaid at our website.

Reference: The Houston Chronicle (April 19, 2019) “Learn about legal documents and Medicaid”

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Probate Lawyers Say Talk to Your Parents About Estate Planning

Probate lawyers say it's important to talk to your parents about estate planning.
Probate lawyers say it’s important to talk to your parents about estate planning.

Probate lawyers often meet with adult children who are trying to settle their parents’ estates. Many times these children are surprised by their parents’ financial situation and the lack of estate planning that their parents have done. When little or no estate planning has been done, it can be expensive and time consuming to deal with all the unresolved issues that  result. That’s why probate lawyers strongly encourage adult children to talk to their aging parents about their finances, their feelings about health care decisions, and whether they have an estate plan in place. But this is easier said than done. How do you start a conversation that includes a discussion of a family member’s mortality?

Sometimes the way to ease into a conversation with aging parents about money and their estate plan, is to discuss your own. If you want to know about their will or estate plan, start by explaining your own estate plan, how you’ve decided to set up your estate and then ask what they’ve done for themselves.

The conversation may feel awkward the first time you start it, says the Daily Local News in the article “Ask your folks about their financial plans,” but you need to get to where everyone is comfortable having the conversation. Your parents’ plans might impact yours, and visa versa. So, it’s good to talk “early and often” not only about your parents’ estate plan, but how they are planning for the costs of retirement, including health care.

It’s important for aging parents to understand that, if something happens to them, their children are the most likely ones to step in and take charge. Your parents need to understand that the more you know in advance, the better equipped you’ll be to make sure that their wishes are followed.

A good opening is to talk about your plans to save for retirement. Ask your parents what they did, or do, about 401(k) contributions. This will give you insight into how well-prepared and knowledgeable they are about retirement savings. If you’re house hunting, that’s an excellent opportunity to get them talking about their furture plans for living arrangements. Do you need to buy a home with a possible “in-law” suite in mind? It’s not a bad question to ask. It shows that you are thinking about their future needs.

Probate lawyers have seen how untangling an estate when there’s no will and no advance planning has been done can tear a family apart. That’s the last thing you or your parents want. Talking openly with them about money, trusts, wills, life insurance and advance medical directives, will give you an idea of what they have or have not done to plan for the future. It may spur your parents on to move forward with their estate plan, if they have been procrastinating.

Even if you learn that they haven’t done any planning and don’t have a will, that is better than not knowing until it’s too late. If you learn that this is the case, you can start educating them about what will happen if they don’t meet with an estate planning attorney. You can offer to take them to meet your estate planning attorney or to give them a few names so that they can decide who they are most comfortable with. This could help them avoid some common estate planning mistakes.

Setting up your own estate plan is another opportunity to ask your parents what they did and what their thoughts are about your  estate plan. Their family may have never done any estate planning, and they might have more than a few family horror stories to share. In that case, you can help them change the family’s dynamic by encouraging them to take a different path.

Reference: Barchart (April 16, 2019) “Ask your folks about their financial plans”

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