By James S. Rizzo, Esq.*
“Out of crisis comes clarity.”
– Randolph O’Toole
I’m sure by now most people have had their fill of quarantine, health fears and/or much worse, having to deal with a loved one who has fallen ill or passed away during this pandemic. Many feel anxiety about the real or perceived loss of control over our daily freedoms, gatherings with friends and family and loss or changes in employment. For better or worse, health scares like the present pandemic bring clarity to at least one area you can take control and give yourself and your family peace of mind: getting your estate documents in order.
While not exhaustive, the following is a list of five estate planning documents to review with a professional and seriously consider:
A Will. This is usually the first thing that comes to one’s mind when thinking of estate planning but also the most neglected and high on the procrastination scale. Let’s face it, for a lot of people focusing on every day life is enough without wanting to think about what happens after death. However, if you die without a Will, generally you are putting the burden upon your loved ones to engage a lawyer and begin the process of establishing and administering your estate. If your death is sudden and unexpected, the stress, turmoil and additional fees and expenses of settling your estate and determining guardians for minor children only compound the emotional upheaval. You are also allowing/requiring the government to determine, via State law and the court system, not only the care and control of any minor children but how your assets are to be distributed and to whom.
A Power of Attorney with Statutory Gift Rider. Having a valid Power of Attorney is arguably the most important or “urgent” document you should complete in order to preserve and protect your assets and general well-being during your lifetime. If you become incapacitated without a Power of Attorney, you run the risk of bills not being paid, insurance policies lapsing, services discontinued, house foreclosure, benefits lost (including Medicare and Medicaid coverage) and a host of other financial pitfalls. These risks are exacerbated if you are single and/or have accounts, funds and real property solely in your name. Without a Power of Attorney, your loved ones may be forced to undertake a guardianship proceeding in order to have court appointed authority to act on your behalf.
The Statutory Gift Rider section of the Power of Attorney can authorize your agent to both gift and make asset transfers on your behalf in conjunction with a nursing home application, long term hospital stay or to assist with estate tax issues. Since the Gift Rider can provide expansive asset transfer powers, it should be reviewed with an estate planning attorney to understand its benefits and provide additional safeguards if necessary.
Health Care Proxy. For most people, the thought of being kept alive by artificial means with no mental capacity is a repugnant thought. A Health Care Proxy authorizes another individual (usually a spouse, significant other or adult child) to carry out your health care wishes and, among other powers, allows him or her to enter a “Do Not Resuscitate Order” (“DNR”) on your behalf to relieve an end of life situation. Generally, without a Health Care Proxy and/or DNR in place, all reasonable medical treatments will continue and a person may be kept alive indefinitely (with ever growing medical and legal costs) or until a court order can be obtained to remove such measures.
Revocable or Irrevocable Trust. While an estate planning attorney should carefully review which type of trust is best suited to your specific needs, the benefits of these trusts can provide asset protection for your family for decades to come. Irrevocable trusts generally protect your assets from ever escalating and financially crushing nursing home costs, as long as the assets are titled into the trust at least five years before a nursing home event. Revocable trusts can be an effective estate planning tool for, among other examples, people who own multiple properties or real property in different states, as well as avoiding estate tax (for wealthy individuals). Generally, assets placed into either of these types of trusts can avoid expensive legal fees, court costs and lengthy probate proceedings after one passes away.
HIPAA Authorization – This form specifically allows you to authorize an individual or other persons to obtain and review your medical records in compliance with the strict Health Insurance Portability and Accountability Act of 1996 (HIPAA) privacy regulations. This allows your appointed agent(s) the discretion, among other powers, to confirm the severity of your medical condition to family members and/or seek a second opinion if warranted. While the HIPAA authorization may be combined within your Health Care Proxy, there may be situations where a person wants one agent’s authority to obtain medical records kept separate from another agent’s ability to make an end of life determination.
Times of crisis remind us how important it is to prioritize and complete what is within our control. Making sure you are properly cared for if you become incapacitated while not dissolving all your hard earned assets and providing for your loved ones upon your passing, are essential goals that provide peace of mind in an ever changing and anxiety ridden world.
This article is for informational purposes only and should not be construed as legal advice. James S. Rizzo is an attorney with the law firm of Rheinhardt and Bray, P.C., with offices in Rome, Ilion and serving the Central New York area. He has over 25 years of legal experience and concentrates in Estate Planning matters including Wills, Revocable and Irrevocable Trusts, Powers of Attorney, Health Care Proxies, Asset Protection, Nursing Home/Medicaid planning & Probate issues. He can be reached at (315) 339-0503 or jrizzo@cnyelderlaw.com for a free, confidential initial consultation. Visit us on the web at: www.cnyelderlaw.com.