True Stories Offer Sober Disability Planning Lessons.
By Christopher J. Godfrey
Wills and trusts capture most of a family’s attention in the estate planning process. Few families
understand the crucial role disability directives can play in their lives. Here are some stories that illustrate the need for good disability planning. These should help you better appreciate the essential elements to be found in a comprehensive estate plan. In other words a plan that works the way you would expect it to work.
A competent 95 year-old widow with appendicitis signed a medical consent form for an emergency appendectomy. Once inside, the surgeon discovered that her appendix had been previously removed. Obviously her problem stemmed from something other than her appendix. Even though the surgeon was already in position to help, he was not authorized to do any other procedure. The woman had no health care power of attorney, and therefore no healthcare agent empowered to sign the necessary forms for a different
procedure. Instead the surgeon had to wait for the widow to recover from anesthesia before she could authorize the surgeon to perform further surgery.
An adult child was living with her elderly and incompetent father. The child could no longer postpone her father’s need to enter a nursing home. Medicaid permits transfer of house to caregiver child without penalty. But the financial power of attorney father had signed did not allow daughter to make gifts to herself as dad’s agent. Daughter had to first get authority to transfer the house from the Guardianship court which was not obligated to follow Medicaid rules. In other words, it may not have been granted as they had planned.
The parents of unmarried adult child recovering from head injuries suffered in a car accident were named healthcare agents in his health care power of attorney. But the medical insurance carrier and physicians would not cooperate on a billing matter because the medical power of attorney did not include a “HIPAA compliant” authorization form. The parents were then forced to go to a Guardianship court to get the necessary authority. Do you remember young Terry Schiavo who was in a persistent vegetative state for many years? She had no Living Will, or other healthcare power of attorney from which her intent could be gleaned. The ensuing legal battle between her husband and her parents became a media circus - all of which could have been avoided.
Beyond confirming that every client has a Living Will, Health Care Power Of Attorney (sometimes called a Healthcare Proxy or Appointment of Healthcare Representative), HIPAA authorization & Durable Financial Power of Attorney - ask yourself four additional questions to identify whether or not these directives will fully meet your needs:
Are the forms you are relying upon reasonably current?
Has your condition changed such that your agent will need expanded powers to authorize actions under Medicaid or Veterans rules?
Do your documents name at least one alternate agent in case your first choice is unwilling or unable to serve?
How will your forms be retrieved in an emergency, will they be available when needed?
Advisors who assist in this way perform a valuable service for their clients and help them reduce the potential for problems should a disability strike.
The disability directives we have discussed here tend to differ from state to state. And since they differ as a matter of state law, you should consider meeting with an attorney or some other knowledgeable professional to find out more about your State’s unique disability directive laws and processes.