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Statistically, we are all six times more likely to become incapacitated in the next 12 months than we are to die. It follows logically, therefore, that planning for incapacity is more important that planning for death. Yet most estate plans provide very little support to individuals who become incapacitated, or to the families of those who become incapacitated.
After the natural grieving that follows the death of a loved one, there is no longer a need to expend money or energy providing care. But in the event of incapacity or declining capacity, the end is often not in sight: Worry and effort and expense all increase.
Hopefully, the person who is ill has family and resources to provide care. It is not just the cost of nursing care (although that is a greater threat than taxes to the wealth of most Americans, and everyone who can afford long term care insurance should have it). It is also the emotional and financial burden on families. The most common scenario is that 60 year olds are supervising the medical and financial affairs of 85 year old parents ... at a time when those caregivers have their own work responsibilities, children in college and perhaps are beginning to experience their own medical issues.
Comprehensive, thoughtful planning can help protect the ill, aging or injured person while minimizing the emotional and financial burdens on loved ones and caregivers.
It begins with organization. What do you have? Where is it? How do you get to it? What are its tax characteristics? Where are your important papers and documents? If you do not have things organized in a manner that others can step in and take over, you and your loved ones are vulnerable to your loss of capacity. We produce a customized asset schedule for all of our clients that helps clients and their successors respond in the event of incapacity.
Our plans ask and answer 5 questions, and a 6th for elderly clients: (1) How do you know if you are disabled? That is, how do you want to define disability? (2) Who takes over (a) you, (b) your health care decisions and (c) your assets? (3) What are they allowed to do? (4) What kind of help do they get? (5) What kind of power do they have? And (6) Where do you want to live if you can't live where you want to live?
We use the standard for Ohio Living Will and Durable Power of Attorney for Health Care, but we believe they are flawed and not entirely sufficient, so we supplement them. First, we add language to those forms, the most important of which makes it clear that medical providers (doctors, hospitals, nursing homes, EMTs) need to provide medical information to anyone you have identified as an agent, not just the first one. In a crisis, your first choice of agent may not be available, or your second or third choice may be closer or more immediately available.
In addition to modifying the standard form Ohio Health documents, we provide (a) stand-alone, limited HIPAA privacy waivers, (b) a letter from you to your primary care physician transmitting your health care documents and instructing the physician to work with your family in the event an incapacity determination is required, (c) a comprehensive power of attorney for financial matters, being very careful of personal circumstances because statistically, financial powers of attorney are misused by agents more than 90% of the time, (d) a guardianship nomination in case your circumstances are such that the Probate courts decides to take jurisdiction of your affairs during lifetime, and (e) organizing checklists for use by caregivers in taking care of you and your assets.
When appropriate for aging or special needs situations, we help our clients work with Geriatric Care Managers to help them through medical issues and housing options.
There is no substitute for thoroughness, thoughtfulness and attention to detail in the preparation of an estate plan. If your plan does not include such planning for declining capacity or loss of capacity, it is not a thorough plan.