Don't put off the tough conversation

By Bennett Loudon
BridgeTower Media Newswires

Only about a third of Americans have end-of-life plans for their assets and health-care decisions.

Unfortunately, even when plans are made they often include costly mistakes, said Lisa Powers, senior counsel and elder law attorney at Harris Beach PLLC.

Powers frequently delivers presentations to community groups about wealth planning, health-care proxies and powers of attorney.

“Most people know that they should have those as their basic planning documents, whether or not they truly understand what each of them can do,” Powers said.

Tricky topics

Powers views elder law as a holistic practice of planning and dealing with the aging process. Estate planning is much more focused on what happens when you pass away, but elder law attorneys are “focused on all adults who are dealing with the aging process and the things that come up within that context,” she said.

Planning should include dealing with potential disabilities, making sure that your wishes are honored, and reducing to writing what your health care wishes are, in terms of medical treatment options, or if you don’t want medical treatment options.

And they also deal with what happens after you’ve passed away.

A major part of her practice deals with clients’ disability concerns and long-term care planning in terms of how you will pay for it if you need someone else to care for you.

That includes guiding “a real heart-to-heart conversation with people in your life who you love and trust,” Power said.

Tax issues and finances and other assets are part of the conversation, but the discussion also should involve the “tricky topics that come up associated with aging,” Powers said.

It’s important to consider questions such as these: What would you want to happen if you had a very serious illness? Do you want every possible medical treatment? Do you want experimental things done?

“The best thing we can do is to make sure that your wishes are reduced to writing in legal documents that are comprehensive, yet flexible,” Power said.

‘I took care of that’

One of the most common problem areas Powers encounters is related to powers of attorney.

Online low-cost legal service providers also can be problematic. Powers tested an online service by using one to prepare a power of attorney “and was astonished at how bad the resulting product was,” she said.

“It’s formatted very nicely, so if you didn’t know what you were looking at you would think you were perfectly fine,” she said.

Notaries verify the identity of the person signing the power of attorney, but they are not responsible for the contents.

“You’re likely going on your way thinking, ‘I took care of that; I have a power of attorney in place,’” Powers said.

Inevitably, an improperly prepared power of attorney can have devastating consequences. If you can’t find a way to get a proper new power of attorney signed, the only more complicated option would be to seek guardianship in court.

Another financial planning tool that troubles Powers is the life estate deed, which is designed for people who fear losing their home.

“They’re worried that if they get sick the house will have to be sold to pay for long-term care expenses,” Powers said.

A life estate deed transfers an interest in your house to someone you choose while allowing you to live there and continue to get the property tax
exemptions for which you qualify. When the owner dies, the home is transferred to the person designated.

The problem is that the person you designate becomes a co-owner of the home; if they get sued or go bankrupt, you could still lose the home.

Although the best option depends on an individual set of circumstances, many elder law attorneys prefer to use a Medicaid asset protection trust, which keeps the home out of reach of creditors.