Avoid Disagreements Between Your Power of Attorney Holder and Health Care Proxy

A durable power of attorney and a health care proxy/patient advocate are two very important estate planning documents. Both allow other people to make decisions for you in the event you are incapacitated. Because the individuals chosen will have to coordinate your care, it is important to pick two people who will get along.

A power of attorney allows a person you appoint — your agent or “attorney-in-fact” — to act in your place for financial purposes when and if you ever become incapacitated. A health care proxy is a document that gives an agent the authority to make health care decisions for you if you are unable to communicate such decisions.

While the health care patient advocate is the one who makes the health care decisions, the person who holds the power of attorney is the one who needs to pay for the health care. If the two agents disagree, it can spell trouble. For example, suppose your health care agent decides that you need 24-hour care at home, but your power of attorney thinks a nursing home is the best option and refuses to pay for the at-home care. Any disagreements would have to be settled by a court, which will take time and drain your resources in the process.

The easiest way to avoid conflicts is to choose the same person to do both jobs. But this may not always be feasible — for example, perhaps the person you would choose as health care proxy is not good with finances. If you pick different people for both roles, then you should think about picking two people who can get along and work together. You should also talk to both agents about your wishes for medical care so that they both understand what you want.

Are You Disabled? Do you have a Disabled Child? If so, did you know an inheritance could cost you your benefits?

People with disabilities have special needs. Often the person on disability relies on certain governmental benefit programs such as Medicaid or Supplemental Security Income (SSI) for support and medical insurance. These programs have strict income and asset eligibility requirements. A well intended inheritance could in fact cause the person to lose important benefits. Proper planning can avoid these problems.

In our office, we often have parents of a disabled child tell us that they plan to disinherit the disabled child and leave their estate to another “well” child whom they expect will “look after” the disabled child. While these parents have good intentions, this can be a recipe for disaster. The healthy child has no obligation of support for the disabled child and could, without any legal consequences, keep all of the inheritance.

Parents will then tell us “my child would never do that.” But then we ask: what if your child gets divorced, dies, is disabled or is in a car accident? The money could then be lost through no fault of the well child. Are you willing to take this chance when there is a safer solution?

The safer solution is to create a Supplemental Needs Trust (SNT) for the benefit of the disabled child. In the parent’s Will or Trust the parent leaves the disabled child’s share to the SNT rather than directly to the disabled child. The funds in a properly crafted SNT should not disqualify the disabled child from benefits. The funds should then be available to help pay for services and “extras” not paid for by the programs. It creates a nest egg for the disabled child and should be protected from the claims of the Trustee’s creditors.

For example, Mom and Dad, in their Wills, leave $50,000 to a SNT created by them for the benefit of their child, Mary, who has Down’s Syndrome and is dependent upon Medicaid for her health insurance. The Trust assets should not disqualify Mary and can be used to pay for things such as extra medical care not covered by Medicaid, or a vacation, or clothing, or perhaps even a car! After Mary dies, any money remaining in the trust will be paid out to whomever Mom and Dad designated when they created the SNT.

A competent elder and special needs attorney can guide families through the difficult issues to create an estate plan that follows the family’s wishes, cares for the disabled individual properly and allows for continuation of government benefits. If you have a loved one dependent on government benefits for support, we encourage you to call our office because we have experience in special needs.

When a Loved One Dies

After a loved one dies, there are many issues which need to be addressed to wrap up the person’s legal and financial affairs. The following is a checklist of issues to consider:

The funeral home should take care of providing you with certified copies of the death certificate. The number of death certificates you need will depend on the assets remaining at the time of death.

The funeral home should contact the Social Security Administration to report the death. If there is a surviving spouse, the spouse will be entitled to a one-time death benefit of approximately $250. In addition, the surviving spouse may begin receiving the deceased spouse’s monthly social security payment if it was higher than their own.

Regarding any life insurance, you will need to call the insurance company to report the death. The company will send you a claim form to complete and will request a certified copy of the death certificate. The death benefit proceeds will then be issued to the beneficiaries. (Retirement plans, such as IRA’s and annuities, work much the same way. You must contact the appropriate company to report the death, complete the necessary claim forms and submit a death certificate before the proceeds will be distributed to the beneficiaries.)

If your loved one was receiving a pension from the VA or a former employer, you should contact the institution and report the death. If there is a surviving spouse, it is possible that the spouse may receive a death benefit or may begin receiving a monthly pension check.

If your loved one owned real estate in joint tenancy with another individual, a certified copy of the death certificate should be filed with the county registry of deeds office. The same is true if they owned the real estate alone but had designated a beneficiary. (Keep in mind, if the home is now vacant, there will most likely be a limit on how long the home will continue to be insured—you should check with the insurance company.)

If your loved one owned a car, a death certificate should be presented to the local Secretary of State office.

Any other assets remaining, like bank accounts, CD’s, stocks and bonds should be handled similarly to the real estate and car. Those assets with Payable on Death (POD) or Transfer on Death (TOD) beneficiary designations will require that a death certificate be provided to the appropriate financial institution or company.

Finally, you may be wondering if anything will have to go through probate. Those assets that were titled in your loved one’s name alone with no beneficiary designation at the time of death will need to be probated. If there was such an asset, then your loved one’s Last Will and Testament will need to be filed with the probate court. If there was no Last Will and Testament in place, a probate estate will need to be opened and state law will determine the distribution of the assets. (There are exceptions to this procedure which may simplify the process if the assets remaining in the deceased person’s name at the time of death are relatively minimal.) If, on the other hand, some of the deceased person’s assets were held in Trust, a trust administration will have to be conducted.

Regardless of the amount of assets and how they are titled, it is always wise to contact an elder law attorney for guidance after the loss of a loved one. The Wall Law Group offers a free initial consultation. For your appointment please call 888-829-0894 or click here.

10 Facts Funeral Directors Don’t Want You to Know

Funerals are among the most expensive purchases many consumers will ever make, ranking only behind the purchase of a home and an automobile. A traditional funeral, including a casket and vault, costs about $6,000, although “extras” like flowers, obituary notices, acknowledgment cards or limousines can add thousands of dollars to the bottom line. Many funerals run well over $10,000.

But it’s possible to spend much less if you don’t let funeral directors pressure you into buying goods or services you don’t want or need. To help consumers resist such pressure and become more informed, the Web site Bankrate.com has compiled a list of “10 facts funeral directors don’t want you to know.” The list is summarized below. For the full list with explanations, visit: www.bankrate.com/brm/news/cheap/20031118a1.asp

1. Shopping around for funeral services can save you thousands of dollars.
2. Funeral directors are not clergy. Although consumers tend to trust them implicitly and believe everything they say, it is well to remember that funeral homes are in business to make money.
3. Embalming is rarely required when the person will be buried within 24 to 48 hours.
4. Seeing your loved one prior to burial without the benefit of embalming will not leave you with unresolved grief issues. “If more people knew what embalming entailed, they would not choose to do it,” says Joshua Slocum, executive director of the Vermont-based Funeral Consumers Alliance, a not-for-profit consumer information and advocacy group.
5. Sealed caskets, which add considerable cost, cannot preserve a body.
6. A funeral provider may not refuse or charge a fee to handle a casket you bought elsewhere.
7. You don’t need to spend more than $400 to $600 for a modest casket.
8. You do not have to buy the funeral home’s entire package of services. You may pick and choose the services you want.
9. You can plan and carry out many things on your own to honor your loved one without paying for services from a funeral home.
10. Local funeral and memorial societies can help consumers find ethical establishments and often negotiate discounts for their members. For example, the Funeral Consumers Alliance has 115 chapters in 46 states around the country.

All funeral homes must comply with the Federal Trade Commission’s Funeral Rule. The Funeral Rule requires all funeral homes to supply customers with a general price list that details prices for all possible goods or services. The rule also stipulates what kinds of misrepresentations are prohibited and explains what items consumers cannot be required to purchase, among other things. Also, be careful when considering whether to purchase a pre-paid funeral plan.