Planning for Incapacity

Planning for Incapacity

Law Office of Claire E. Lewis

115 N. Girls School Rd.

Indianapolis, IN 46214

(317) 484-8115

www.clairelewis.net

Planning For Incapacity

1. Power of Attorney IC 30-5-1, including Health Care Power of Attorney. 2. Appointment of Health Care

Representative IC 16-36-1 3. Living Will and Life Prolonging

Procedures Declaration IC 16-36-4

Planning For Incapacity (cont.)

4. POST IC 16-36-6

5. Out of Hospital Do Not Resuscitate (DNR) Declaration IC 16-36-5

What is a Power of Attorney?

• A document in which the “principal” gives authority to the “attorney in fact” or “agent” to manage the principal’s affairs. •A means to direct what happens if the

principal is incapacitated or unable to handle his or her affairs.

Durable Power of Attorney

ALL POAS IN INDIANA

ARE DURABLE:

THEY SURVIVE YOUR

INCAPACITY – UNLESS

YOU STATE OTHERWISE

IN THE DOCUMENT.

Incorporation by reference

•Refer to the descriptive language in sections 2 through 19 of the Powers chapter at IC 30-5-5.

•Cite a specific section of sections 2 through 19 of the Powers chapter to cover the specific provisions of the chapter.

Introductory Section of POA

Powers Chapter:

A power of attorney may in writing

delete from, add to, or modify in any

manner

a

power

incorporated

by

reference, including the power to make

gifts under section 9 of this chapter.

DOCUMENT DRAFTING

Power of Attorney: Make the right choice • Springing vs. effective now

• Fees for services by attorney in fact • Limitations on gifting

EFFECTIVE NOW OR SPRINGING?

This Power of Attorney (select one option and initial):

• shall become effective immediately following its execution.

• shall become effective upon my

incapacity to manage my own affairs as certified in writing by my attending physician.

SPECIAL PUBLIC BENEFITS

OR MEDICAID POWER

General authority to apply for public benefits of any kind, to represent my interests in obtaining and maintaining benefits, to create a Qualified Income (“Miller”) trust, and to make assignment of medical rights in a Medicaid application or redetermination process.

Who can be named as Attorney in Fact?

• Single AIF with successors

• Multiple independent AIFs

• Multiple joint AIFs

Joint agents

I expressly authorize my agents to

act independently such that the

signature or other action by one

of my agents shall be absolutely

binding and not require the action

or signature of the other agent.

Medical Directives

•Living Will

•Health Care Representative

•Health Care Power of Attorney

•Out-of-Hospital DNR

Health Care Powers of Attorney

•Limited to very few powers unless an

“Appointment

of

Health

Care

Representative” is attached.

•Specific statutory language must be

included to consent to or refuse health

care

Health Care Representative

•I.C. 16-36-1 et. seq.

•Requirements

•In writing

•Signed by appointor

•Witnessed by one adult other than representative

•Not effective until appointor incapable of acting

•Representative must act in good faith

•Typically gives more of the “day-to day” decision-making authority

Living Will

•I.C. 16-36-4 et. seq.

•Terminal condition certified by physician

•Life prolonging procedure •Artificial means

•Prolong dying process

Pros & Cons of Living Wills

Pros:

•Provides psychological comfort

•Open door to discussion

•Between Patient and Doctor

•Between Patient and Family

Pros & Cons of Living Wills

Cons:

•Rarely triggered – when is it hopeless? •Vague (by necessity?)

•Often executed years before need arises

•People rarely travel with their planning documents

POST

Physicians Orders for

Scope of Treatment

Orders for Life Sustaining Treatment)

POST Paradigm Programs

Source: www.polst.org Mature Programs Endorsed Developing Programs No Program

POST

•POST = communication tool written by and for health care providers.

•POST form = medical order form documenting patient treatment preference

•More specificity; more thoughtful process

The POST Program

POST = Physician Orders for Scope of Treatment

•Converts treatment preferences into immediately actionable medical orders

•Advanced chronic progressive disease and frailty; terminal illness

•Preferences to have or decline treatments

•Transfers across treatment settings with patient

•Recognizable, standardized form

22

Who can have a POST?

Qualified Persons

•An advanced chronic progressive illness;

•An advanced chronic progressive frailty;

•Terminal condition; or •Unlikely to benefit from CPR.

Who can prepare a POST form?

•Physician or his/her designee

(TBD by physician)

•Requires treating physician

signature to execute

•Also requires signature of patient

How does the POST work?

•Form is property of patient

•Orders legally valid in all setting

•Patient can change his/her mind

•Re-evaluate when condition

changes

26

POST vs. Living Wills

POST Paradigm Living Wills Population: Advanced

progressive illness

All adults Timeframe: Current care/ current

condition

Future care/ future conditions Where completed: In medical setting In any setting Resulting product: Medical orders Advance directive Surrogate role: Can consent if

patient lacks capacity Cannot do Portability: Provider

responsibility

Patient/family responsibility Periodic review: Provider

responsibility

Patient/family responsibility

Can POST be overridden? Healthcare providers can refuse to honor POST in some situations

•Questions about validity of form

•Voiding or request for alternate treatment

•Treatment is not medically appropriate

•Conflicting moral or religious beliefs* *must attempt to transfer POST is not an advance directive!!!

•It is an advance care planning tool

IC 16-36-5: Out of Hospital DNR Declaration

Declarant must be a “qualified person.”

•Has terminal condition

•Has a medical condition such that, if the person were to suffer cardiac or pulmonary failure, resuscitation would be unsuccessful or within a short period the person would experience repeated cardiac or pulmonary failure resulting in death.

Out of Hospital DNR Order

•Can be issued only by Declarant’s attending Physician

•Can be issued only if Physician

•Finds Declarant to be a Qualified Person AND

•Patient has executed an Out of Hospital DNR Declaration

WHO NEEDS LONG TERM CARE?

•Women: make up 85% of nursing home population

•20% of today’s 65 year olds will need long term care for more than 5 years

•Someone turning age 65 today has almost a 70% chance of needing some type of long term care services and supports in their remaining years

T

he

Costs of Care?

• Assisted living facilities = $33,000-$54,000

• Home and community-based care = $26,000 - $35,000at 4 hours/day

PAYING FOR LONG-TERM CARE  Private Payments

 Nursing Home Insurance  Medicare

 Medicaid

 Veterans Special Pension Benefit (Aid & Attendance/ Housebound)

Partnership Long Term Care Insurance Plans Offer Resource Disregard

• Dollar for Dollar Disregard – Resource limit increases by amount of benefits paid under policy

• No resource limit if purchase policy with sufficient maximum benefits and that amount is paid out

• 2014 - $305,603 • 2015 - $320,883 • 2016 - $336,927

INDIANA PARTNERSHIP COMPANIES

•Bankers Life & Casualty

•Genworth Life Insurance

•John Hancock

•MassMutual

•TransAmerica

•Thrivent Financial for Lutherans

MEDICARE

• Three Days Hospital Stay

• Up to 100 days of SNF coverage: •20 Days Coverage

•80 Days Co-Payment $152/day 2014 • No Financial Requirements

Medicaid versus Medicare

Medicaid Medicare

Qualifications Categorical & Financial eligibility requirements

Age or Disability requirements Administration Federal & State

DFR & Private Contractors

Federal SSA & Private Companies Coverage Varies state to state Same Services Many medical and

non-medical services

Limited services and time frames

Can Medicaid pay for:

•Home Care – YES! •Adult Foster Care – YES!

•Assisted Living – YES! •Nursing Facility – YES!

The Medicaid Basics

• Knowledge of the complex transfer of asset laws and evaluation

of gifts the applicant may have made

• Preparation of good legal documents, including a will with

special needs trust for the applicant spouse, and review of existing documents

• Asset preservation, including protection against estate recovery

by the State

• Ensuring the proper budgeting is done and that all allowances to

which the applicant is entitled are being offered (e.g., tax withholding issues, assuring proper shelter allowance for community spouse in spousal cases)

MEDICAID IN INDIANA Resource Rules:

• Single person – no > $2,000 in resources • Married couple – no > $3,000 in resources

BUT

Big exception in situations in which one spouse is in a nursing home or at home needing “waiver” services.

Spousal Share – Resource Limits

• Minimum/floor $23,448 • Maximum $117,240 • ½ the total countable

resources • Indexed to inflation $234,480 or greater Maximum: $117,240 $50,000 $25,000 $23,448 to $46,896 Minimum $23,448 or less All

Deficit Reduction Act (DRA) Signed February 8, 2006 :

The Penalty That Lurks

Transfers of Assets

•Many misconceptions about the gift rules. •Not all gifts are subject to penalty

•Beware the IRS “exclusion” gift of $14,000 per year per person

•You can’t just “get everything out of Mom’s name” to make her eligible for Medicaid!

Penalty for Any Transfer?

•Charitable gifts?

•Gifts to church?

•Gifts for Christmas?

•Birthday gifts?

NEW TRANSFER PENALTIES

• 5-Year look back period (not fully in effect until

11-1-14)

• Current look back – looks back to 11/1/09 except

for transfers to and from trusts

• Penalty runs from

• Date of Institutionalization • Otherwise Medicaid eligible

Remember Forward Effect of Transfer

• Transfer on or after November 1, 2009 will be considered for 5 years forward

11/1/09 12/05/12 12/05/17

Transfer 12/5/12 will be an issue for Application Filed Within Five Years