Estate Planning for Life

1. Estate Planning for Life • The Fairfax County Bar has a section on Elder Law. • www.fairfaxbar.org 703-246-2084 • The National Academy of Elder Law Attorneys is based here near Tyson’s Corner. • www.naela.org 703-942-5711 • The information in this packet is for educational purposes and is not meant to provide “legal advice” to any reader. Buckley Fricker, J.D. GCM buckley@buckleys4seniors.com

2. Types • Power of Attorney • Durable, or Not Durable • General/Financial or Limited • Advance Medical Directive (AMD) combines: Health Care Power of Attorney and Living Will • Do Not Resuscitate Order (DNR) • (There is a push to rename a DNR as AND – “Allow Natural Death)

3. What If . . . • Imagine you have a stroke, and for a few months you cannot speak, and you never regain the ability to walk. • In 2010, you can live for years this way, maybe longer. • Who will speak for you? Who will walk to the store and the post office for you? • Who will manage to pay your bills, your taxes, and decide where you will live, what therapies you get and which care company changes your diapers and bathes you…

4. In The Past . . . • In the “olden days” if you did become incapacitated, your family took care of you in some way, or you lived as an invalid under some charitable program, if there was one. • (Picture the Old West for instance, or life during the Industrial Revolution.) • Somehow, those who were old and sick and disabled were cared for, or not, until they passed away.

5. A New Need . . . • There was no need to designate a person to decide your financial and health decisions when there was no such thing as living in a vegetative state, or living for years with Alzheimer's. • People just did not live that long, and we did not have the medical machinery to keep us alive, at least for very long, through incapacitation. • Estate Planning for “life” became a “new age” necessity by the 1980’s.

6. Who Comes In Contact With These Documents? • Financial Planners • Care Managers • Social Workers • Attorneys • Health Care Providers • People with Elderly Parents • People with Special Needs Children • EVERYONE!

7. The Statutory “Fall Back” • Please note that without executing a Financial Power of Attorney, a person who becomes mentally incapacitated will have to go through a court process to have a Conservator named by the court to act on their behalf for all financial decisions and obligations. • Without an Advanced Medical Directive naming a Health care Power of Attorney, a Guardian will have to be named by the court to make any medically or health care related decisions.

8. Guardian/Conservator • The court can appoint the same person to be both Guardian and Conservator. A suitable family member will be sought out, and if none is available, a local lawyer will probably be appointed. • Quite simply this means that if you do not take the time to choose WHO will have complete and utter control over you if you have a stroke, develop dementia or have a brain injury, a Judge will choose that person for you. (Scary huh?)

9. Power of Attorney (POA) • Technically, an person who is an Agent/Attorney in Fact is given a “Power of Attorney,” (the power to act legally). The POA is a document. • However, it is easier and widely accepted to refer to the “agent”as the Power of Attorney for financial POAs, or Healthcare Power of Attorney for HPOAs. • I will use “POA” and “HPOA” as nouns referring to the individual who is the Agent/Attorney in Fact, as well as the name of the document.

10. POA • A Power of Attorney is an authorization to act on someone else's behalf - “stand in his shoes” - in a legal or business matter. • Imagine way back in history. A business owner needed to be able to send an Agent on a ship far away to place an order for goods. That Agent needed a legally binding document to persuade the seller that he had authority to act for his boss, hence a Power of Attorney document. • This type is called a “common law” POA. • It became invalid upon the Principal’s death or incapacity. • Modern POAs become invalid only at death.

11. POA • The Grantor of the power, who is called the Principal, gives another person (the Agent or Attorney in Fact - the POA) a legal right to act on the principal’s behalf. • There can be multiple originals of a POA (unlike for a Will).

12. Example • Having 2 originals of the Power of Attorney document can be handy, for instance: • Your POA buys property in your name. The POA document must be filed with the deed at the Courthouse. The Courthouse can take a long time to get the original back you. • In the meantime your POA needs to open an account in your name and a bank wants to see an original document.

13. Successor and Joint • It is a good idea to name a back-up POA or HPOA. The document can say “If Jane Doe does not act, I appoint John Doe.” • That way if one POA or HPOA is out of town or not reachable, the other person can make decisions. • Alternatively, a Principal (person granting the authority) can require that two or more people act together or “jointly” for all decisions. (This can lead to arguments, but can be a good idea depending on the circumstances – discuss with your family and your attorney.)

14. POA The POA can do such things as: • Sign your checks • Agree to pay for new services for you from your funds (such as agree to pay the bill for an Assisted Living Facility or a new wheelchair). • Open a new bank account and transfer funds for you. • Possibly “make gifts” (although this requires specific language and could affect Medicaid planning for LTC and annual allowable gifts under tax laws). • POAs cannot give gifts to themselves or “self deal” without explicit authorization in the POA document.

15. Limited or Special POA • POA documents can have narrow language - such as granting a POA legal authority for the sole purpose of signing closing documents on a property sale. • Ex: John Smith is buying real property here but he lives overseas. He doesn’t want to fly over here just to sign the closing documents, so he grants a POA to Mary Jones, a local, to sign the closing documents for him. • She would sign: John Smith, by Mary Jones Attorney in Fact.

16. Durable POAs Because of the length of the signature, POA’s who need to sign checks frequently might choose to order checks in the account owner’s name and their name as POA so they can just sign their name. Today, most financial POA documents are 1. Durable (survive incapacity) 2. General (not limited) 3. Effective Immediately (not “springing”)

17. When Does the POA Take Effect? • Most are effective immediately because 3rd parties like banks need to be able to rely on them immediately without proof you are incapacitated. A “springing” POA does not become effective UNTIL you become incapacitated (as discussed below). • What if your POA decides to clean out your bank accounts? • If your POA robs you, presumably, you would notice, revoke the POA, and press charges/sue them. • This is why you must choose someone Trustworthy!

18. Example • The POA has a legal fiduciary duty to act on your behalf and can be held liable in court for violating that obligation. Choose someone you trust and preferably a back-up successor as well, in case something happens to your first choice. Most family member POAs are usually not paid, but payment of a fee for this service can be provided for in the document. Payment of POAs is a growing trend. It must be worded correctly in the document or the POA won’t be able to pay themselves (Self-Dealing!)

19. Springing POA • A POA (or HPOA) can also be what is called “Springing”, which means the document has a clause in it saying that it does not become effective until you are deemed to be incapacitated by some explicitly stated means. (Such as: 2 doctors verify in writing that you are not competent). One problem is this defeats the purpose of using a POA to avoid the uncomfortable “process” by which you are proven incapable of handling your own affairs, like what happens in a Guardian/Conservator court process!

20. Uniform Power of Attorney Act • Virginia has adopted the Uniform Power of Attorney Act (one of 48 states, plus the Virgin Islands) proposed in 2006 by the National Conference of Commissioners on Uniform State Laws. • While the Uniform Power of Attorney Act (UPOAA) substantially clarifies Virginia law related to Durable Powers of Attorney (DPAs), it also makes several key changes to the law.  A few key points are the following:

21. UPOAA • All powers of attorney are presumed durable (survive the incapacity of the Grantor) unless stated otherwise in the document. • The UPOAA provides protections for third parties who in good faith accept a purportedly acknowledged (signed with the correct witness and notary requirements) power of attorney.

22. UPOAA • The UPOAA provides sanctions against third parties for their unreasonable refusals of POAs. • The UPOAA identifies certain powers (e.g., gifting and changing designations of beneficiary) that must be specifically granted.

23. Example Cinderella’s Dad is alive and well. He is 85 and planning ahead. He grants a durable, general, financial POA to Cinderella. He can still act on his own behalf. Although he still pays some of his bills, he finds it tiring, so he often passes them on to Cinderella and she pays some of them from his bank account. Cinderella prefers online bill paying, so she sets up his online account, pays some bills that way, while he still writes paper checks.

24. Time Passes. . . • Cinderella’s Dad is now nearing 90 years old. He has developed Alzheimer’s disease. Cinderella, as his POA, is now responsible for handling all of his finances and assets. The transition was smooth because of the Power of Attorney document, and there is no need for a court hearing to appoint Cinderella or anyone else as the Conservator. She has had the stand-by power all this time.

25. Bank Accounts • When a person is appointed as a POA, they should take the document to the bank, or banks where the Grantor’s accounts are held. Each bank has a process by which they “approve” the appointment, which paves the way to set up online banking or order checks, either at that time or in the future.

26. In Addition • Some Banks and Most Brokerage Firms have their own Power of Attorney forms. • In addition to the POA you sign that an attorney draws up, which will likely authorize your Agent to act on your behalf in all financial matters, be sure to inquire with your financial planner or broker as to whether they have additional forms.

27. Medical Advance Directives The three legally binding documents that pertain to your health are: 1. Health Care Power of Attorney (HPOA) (always “durable.”) 2. Living Will HPOA and Living Will can be combined in a single Advance Medical Directive (AMD). 3. Do Not Resuscitate Order (DNR)

28. Health Care Power of Attorney (HPOA) • Similar to when a person appoints another person to be their Financial Power of Attorney, one can also appoint another person to be their Health Care Power of Attorney. • Most people appoint family members or close friends, although you can appoint anyone you feel can follow through on your medical directive if you are unable.

29. Health Care POA • A Durable Health Care Power of Attorney document is used when/if the Principal cannot communicate an informed decision on their own. (Either physically cannot speak or write, or is mentally unable to communicate a competent wish or desire). • An HPOA usually states that if an attending doctor and one other doctor or licensed psychologist deems a person unable to communicate an informed decision, they will follow the direction of the HPOA. • (So, you do not need to have a court hearing stating you lack capacity to make decisions.)

30. HPOA Depending on a specific State’s rules: • The document can be narrow or Limited, such as granting a HPOA just for a single event - such as while you are in surgery. • It can be broad, such as deciding any and all “health-related” decisions for you, including signing a Do Not Resuscitate Order (discussed below).

31. HPOA • Recently some states (including Virginia) have broadened the application of directives from “Medical” to “Health Care” to make sure an HPOA can make decisions about such things as admission to Assisted Living or Nursing Home Facilities and who can visit a patient. These were not seen as being “Medical” per se, but needed to be included.

32. HPOA • Currently the default position is that a HPOA cannot restrict who may visit a patient in a health care facility unless the HPOA document specifically grants that right to the HPOA agent. • Additionally, absent an HPOA document, if the facility has to go by the state’s statutory default for who gets to be the HPOA, that person cannot restrict who may visit.

33. HPOA • It is crucial to discuss your desires with your HPOA. They are supposed to be acting for you, as you would act yourself, and not insert their own wishes. • The HPOA cannot do this job if they don’t know your wishes.

34. EXAMPLE • Cinderella’s Dad appoints her as HPOA when he is 85 and feeling fine. • He decides to go jet skiing at the local inlet. While doing so he collides with another jet skier and is taken to the hospital unconscious.

35. HPOA • Cinderella’s Dad needs surgery. There are pros and cons regarding the treatment options. One is to amputate the leg; another is to try to save it. Both have risks and repercussions and someone needs to make a decision. Dad is unconscious and unable to make this decision, so it falls on Cinderella, the HPOA.

36. Communication is Everything • Lucky for Cinderella, her Dad had talked about the “What Ifs” with her. • He said that being active is so important to him, that he would rather have a shorter life than an in-active one. • Therefore, Cinderella directs the doctors to keep the leg, even though that treatment method could result in more complications leading to death.

37. HPOA • As Dad nears 90 and develops Alzheimer’s disease, he cannot live alone. Cinderella can, for instance, decide to admit him to an Assisted Living Facility, or hire the necessary medical assistance for him to remain at home. • She can decide many things regarding her Dad’s health care, such as which medical treatments and therapies to try.

38. HPOA • As Dad nears death, Cinderella recalls he did not want to be kept alive artificially. • Cinderella directs medical personnel NOT to administer artificial fluids and nutrition to her father, for she is obligated to follow his wishes. He will receive “comfort care”. • If Dad has a Living Will, that document will direct the Doctor outright, and the HPOA doesn’t have to actually make this decision. See below.

39. Living Will • A Living Will has nothing to do with a regular “Will” and it is NOT a Living Trust or Pour Over Will. ~~Don’t confuse the identity of the Living Will!~~ • A Living Will, is an advance directive, a decision made in advance. It is a legal document that a person signs in order to express to medical personnel what kind of treatment they do or do not want if treatment would only prolong the dying process.

40. Living Will • A Living Will got the name because just as with a regular Will where you direct what you want to be done with your belongings and property after you die, a Living Will directs what you want done with your “Self” while you are still Living.

41. Living Will • These documents were not really accepted by the medical community until the 1990’s because they seemed to conflict with the Hippocratic Oath, to do no harm, i.e., do everything medically necessary to keep a person alive. • At first, attorneys would have to threaten to sue doctors who refused to follow the directives that a patient had signed.

42. Example • Cinderella gets the news that Dad’s Alzheimer’s disease has progressed and he is unable to eat or drink. He will not live long unless he is given IV fluids and a feeding tube for nutrition. • Dad’s Living Will says that he does not want artificial nutrition or fluids to be kept alive, and it also says he wants to be made as comfortable as possible until he dies.

43. Example • Cinderella should ensure that Dad is receiving: • Palliative Care - “a form of medical care or treatment that concentrates on reducing the severity of disease symptoms, rather than striving to halt, delay, or reverse progression of the disease itself or provide a cure.” (Wikipedia) • And/Or • Comfort Care - getting the necessary pain medications to make his last few days/months as comfortable as possible. (Usually provided by Hospice Services at home or in a facility.)

44. Example • Given the directions in Dad’s Living Will, Cinderella is legally not permitted to decide, as HPOA, that she wants to have the doctors keep Dad alive through artificial means because his Living Will states his wishes, and her HPOA: 1. Does not trump the Living Will 2. Her obligation as HPOA is to follow his wishes, which, even without a Living Will, he has hopefully communicated to her.

45. IMPORTANT! • As you can see, it is crucial to sit down and talk to your loved ones and/or HPOA about your wishes concerning your health care. • To the extent reasonable, incorporate those wishes in your HPOA document. • If you do not, your HPOA will be left to guess what you would have wanted, and that can cause an emotional burden.

46. Do Not Resuscitate Order • A DNR is used when a patient is near death in an emergency situation, usually from cardiac or respiratory arrest. • This document can be obtained only from a doctor, not an attorney. • This document is signed at a doctor’s office or in a hospital. It is printed on the same paper as Bonds to deter counterfeiters (e.g., greedy kids who want their inheritance as soon as possible!)

47. DNR • People living in their own homes with an emergency DNR often place the DNR on their refrigerators. If an ambulance is called, the medical personnel will likely look there to see if CPR, electric heart shocks or other treatments should be started. • A person may also opt to have a DNR bracelet. • An HPOA can sign a DNR order for a person.

48. The Five Wishes • Virginia is a State in which you can use the Five Wishes document in lieu of an Advanced Medical Directive, but regardless of whether you choose an Advanced Medical Directive or the Five Wishes, the Five Wishes is an excellent platform to help you make decisions and talk about them with your family or HPOA. • Go to http://www.agingwithdignity.org for more information.