Planning for Incapacity and

Healthcare Needs

Wednesday, October 24, 2012

• Jason C. Walker – B.S. Accounting : Weber State University

– Masters of Accountancy (Tax): Weber State University

– J.D.: University of Wyoming College of Law

– LL.M. (Tax): University of Florida

– Law license in NV and UT

About JEFFREY BURR, LTD. – 7 attorneys, + 3 attorneys Of Counsel

– Estate Planning & Asset Preservation – Jeff Burr, Jason Walker, Collins Hunsaker, Rick Cunningham

– All Estate Planning attorneys have CPA, Masters of Accounting, or LLM degrees

– Probate, Trust Administration – Corey Schmutz, John Mugan, Kari Stephens

– Elder Law & Guardianship – Corey Schmutz

– 2 Locations: Green Valley & Summerlin

– 27+ years of practice in this specific industry

•The importance of Advanced Directives and Powers of

Attorney.

•Planning to avoid the need for guardianship

•Long-tem care planning

•There are 39.6 Million persons aged 65+ (2009)

•24.4% of noninstitutional persons >65 are in fair or poor

health (2010)

•1.3 Million nursing home residents aged 65+ (2004)

•1.0 Million home health care patients aged 65+ (2007)

•Translated results:

•1 in 4 chance of seniors having “fair to poor health”

•1 in 20 chance of seniors needing nursing home care or

home health care

Various surveys @ www.cdc.gov

•Who has an Advanced Directive?

•28% of Home Health Care Patients

•65% of Nursing Home Residents

•88% of discharged Hospice Care Patients

•Age becomes a factor – the older the resident/patient,

the higher chance that they will have an Advanced

Directive in Place.

Source: 2004 National Nursing Home Survey & 2007 National Home

and Hospice Care Survey ww.cdc.gov

•More people need to have these important documents in place

•Chances of needing these documents for poor health (or at least some medical event) are fairly high

•Preparation and implementation of these documents is easy and often very inexpensive

•An individual is able to make his own healthcare decisions if he can give “informed consent” – understands:

•Suggested course of action or the medical treatment to be provided and/or continued and if the burdens of the treatment out weigh the expected benefits •Full impact of the proposed financial transaction or the relief of suffering •Full impact preservation or restoration of functioning •Quality of his or her life should it be prolonged

•E.g., Kenneth McKay: 31 year old non-terminal, competent, quadriplegic

•Wanted respirator removed •Court: Kenneth was competent and had a right to refuse life-prolonging treatment

•“Right to die” for incompetent individuals

•Nancy Cruzan: •In a coma for 4 years •Family wanted feeding tubes removed •Court said there was no “clear and convincing evidence” of her desires; denied family’s petition

•Terri Schiavo

•In a persistent vegetative state •1998: husband petitioned to remove feeding tubes; parents opposed •7 years of litigation and government intervention before permission was granted to remove life support

•“Contractual Capacity:”

•Capacity required to execute a healthcare directive or, powers of attorney for healthcare or financial matters, and trusts

•Client must be able to: •Participate in outlining his or her wishes •Understand the significance of the documents to be signed

•Make sure all are up-to-date

•Out-of-state healthcare documents may not work

•Use “in-house” Financial POAs where necessary •Many banks, insurance companies, etc. will only accept their own POA form •Updated Nevada law (2009) helps this problem

•Provides a specific form for your Directive to Physicians (“Living Will”)

•Your preferences re life-sustaining medical treatment

•What types of life-prolonging treatment you would not want to receive if confronted with a life-threatening condition making you incapable of communicating your wishes

•Spares a person who is incompetent and near death: •Unwanted suffering, medical treatment •Healthcare expenses

•Healthcare Powers of Attorney

•You designate a person to make healthcare decisions on your behalf when you can no longer make those decisions

•Includes your desires regarding artificial life support and the removal of life support – what you want, and what you DON’T want

•NV Secretary of State will keep a copy of your living will in electronic form

•You get a registration card for your wallet, which has the number to be used for access

•Your healthcare documents can be pulled up for view by healthcare providers

•Will be available to you and your healthcare provider 24 hours a day, 7 days a week

•Your family will have to make difficult decisions

•Could incur large expenses/delays if legal guardianship or conservatorship is needed

•If there is a disagreement as to your care, may have to go to court

•Mental incapacity is the trigger for most of our guardianship cases.

•It is estimated that 4.5 million Americans have Alzheimer’s disease and this figure is expected to more than double to 9.6 million by 2030 (Alzheimer’s Assoc. 2006)

•But what is guardianship?

•Guardianship is a relationship established by a court giving one person the power and duty to care for another.

•Guardianship can be established for the “person” or the “estate” but more often guardianship is established for both of these categories

•Guardianship can often be avoided when the proper estate planning documents have been put in place.

•Trust (estate) •Healthcare Power of Attorney (person) •Financial Power of Attorney (estate)

•Guardianship is like probate while the person is living, and it never ends until the person passes away.

•Guardianship is expensive; $5,000 to $10,000 in legal fees for a guardianship to be established, plus, annual reporting requirements to the court which are also often prepared by the attorney that helped with establishing the guardianship.

•From an estate planner’s point of view, guardianship is a last resort because the traditional estate planning documents usually help a client avoid guardianship.

•Avoiding Guardianship will require steps to make sure that someone has the authority to take over control of the person’s estate and that someone has the authority to make the person’s health care decisions.

•Revocable Trust •Financial Power of Attorney •Health Care Power of Attorney •Directive to Physicians/Living Will

Serious health issues, such as Alzheimers (and many others) can result in the need for care at home or in an institution for long periods of time. Medicare will cover only a relatively short period of time, after which a patient must be able to cover expenses on their own or look to State Medicaid benefits.

•Remember: you can’t do this alone

•Alzheimer’s patient: $375,000 for lifetime care

•Government help is limited •Medicaid:

•You have to have little to no income/assets to be covered •The State can come after your non-exempt assets for payment

•Only if you will need it, AND you can afford it

•If debilitating illness runs in your family

•Lengthy nursing-home stay would financially devastate your family

•Call around and find out how much it would cost to be in a nursing home/assisted living facility to accurately predict required benefits.

•Only use an established company •Make sure the policy covers nursing homes, assisted living facilities, and home care •Can you afford a premium hike of 10-20% and keep current on payments? •Spend no more than 7% of your income on premiums •90 day elimination period (like a deductible) will keep premium down: you pay for the first 90 days yourself •5% “compounding” inflation will help your coverage keep up with the price hikes •Keep saving – average policy only pays about 70% of costs of care •Call State Health Insurance Assistance Program for free counseling and information (702-486-3478)

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