Seniors Guide To Legal Wellness

April 2, 2019

Life today is complex and it has never been more important to be prepared. As we reach a “certain age” it is more important than ever to protect yourself and your family from unnecessary legal, financial and emotional burdens. The effects of unexpected death, debilitating illness and family disharmony can all be reduced or ameliorated if you take thetime to put an appropriate estate plan in place. An appropriate estate plan is one that protects you while you are alive and addresses your most pressing needs, be they minimizing estate tax, protecting assets from nursing home expenses, or managing funds for a disabled child. Let’s look at how you do that in four easy steps.

1. Don't Defy the Odds.

The simple truth is the longer we live, the greater the chance of illness and incapacity. You can protect your autonomy and independence by creating your personal plan for incapacity. Without your personal plan in place a legal guardianship will be necessary if you lose mental capacity. So for instance, if you suffered a severe stroke, your family may be unable to access information, make medical decisions, manage your retirement accounts, file income taxes, and the list goes on and on. Then in a state of crisis someone has to petition a court to appoint a guardian for you. Under these conditions the person appointed may or may not be the person you would choose for yourself. And, once a legal guardianship is established, the guardian must get court permission for anything other than ordinary actions and must account to the court on an annual basis for every penny paid on your behalf. As you can imagine, this is inconvenient and expensive.

Your personal plan for incapacity can be established through the use of a number of legal documents called “advance directives.” There are four different documents you need to be aware of. They are:

  • Financial Durable Power of Attorney
  • Healthcare Durable Power of Attorney
  • Living Will
  • HIPAA Authorization

Let’s look at each one.

Financial Durable Power of Attorney.

This legal document allows you to name one or more agents to manage your property and finances in case you become incapacitated. If you become incapacitated, this may be the most important legal document you have. Despite its importance, we frequently see powers that are inadequate when you need them to work. It is critical to have a least two agents named. If you and your spouse only have each other named, and you are in a common accident and incapacitated at the same time, you will not have a functioning agent when you need one. Your agents should also be able to work together harmoniously. If you name two children who constantly butt heads, you are setting them up for constant and potential battles. Special attention needs to be paid to the provisions for gifting your assets. A properly drafted power to make gifts may allow your agent to reduce estate taxes and engage in Medicaid asset protection planning. Lastly, your durable power needs to clearly identify any real estate that you own.

Here’s an example of how a durable power of attorney can work for you and your family. Mrs. Smith is totally incapacitated, suffering from advanced dementia and living in a nursing home. She has spent down her bank accounts and applied for Medicaid. She also has a house worth $350,000. Many years before she entered the nursing home her daughter quit her job and moved into her mother’s home to care for her and to keep her at home. There is a special Medicaid rule for children such as Mrs. Smith’s and it is called the caretaker child rule. Essentially, Medicaid allows the parent to transfer the home to such a child without penalty. But Mrs. Smith is totally incapacitated and unable to sign a deed. Luckily, Mrs. Smith has a durable power of attorney with a legal description of her home, with broad gifting powers and authorization for her daughter to make such a gift. This is how your personal plan for incapacity should work for you and your family.

Healthcare Durable Power of Attorney.

The healthcare power of attorney (or healthcare proxy) allows you to name one or more agents to make medical decisions for you. If you became incapacitated without this important document in place no one would be able to give informed consent on your behalf. Under those circumstances your family may have to get a guardianship in order to manage your medical treatment. Lack of a healthcare durable power of attorney can also lead to serious disagreements with hospital staff as to what care is in your best interests.

Living Will.

A Living Will is a statement of your individual and specific wishes for extraordinary medical procedures. Your Living Will serves as a guide to your family and agents under these circumstances. Absent such a guide your family may be faced with trying to guess what you would want under serious stress and life or death circumstances.

HIPAA Authorization

A HIPAA Authorization provides your agents with specific authority to access medical information that is protected under federal law.

2. Accept the Inevitable.

We all know the truism: Nothing is certain but death and taxes. Yet we frequently ignore and deny the truth. We refuse to think or face the inevitable, but nevertheless, we are all going to leave this wonderful life some day. So take care of yourself and your family. Take care of the estate you labored a lifetime to build. Make sure you have a Will or a Trust that will pass your estate to your intended beneficiaries in the most efficient manner.


Your Will determines who will be in charge of your estate, who will receive your estate and how your beneficiaries will receive their respective shares. Your “executor” is the person in charge. Once appointed by a probate court your executor can collect all of your property and pay your debts and expenses. After that is accomplished your executor distributes your estate to the beneficiaries or heirs as you have provided in your Will. Sometimes you do not want a beneficiary to receive an inheritance outright, for instance a minor child. In those circumstances, your Will may provide for a trust or other means of management for the beneficiary. A Will must be executed according to certain formalities in order to be admitted by a probate court and failure to follow those formalities may result in an invalid Will.


While there are many types of trusts, revocable living trusts are a very popular estate planning tool. They are sometimes referred to as “will substitutes.” A revocable living trust allows you to retain total control of your assets while creating a vehicle that will avoid the need for probate upon your death. Revocable living trusts are especially beneficial if you have:

  • Real estate in more than one state
  • Family issues you prefer to keep private (like a disabled child)
  • A Business
  • A complex estate
  • A large estate

Generally a revocable living trust will save your family time and money and protect your privacy.

3. Plan - Don't Worry.

Once you have reached retirement age your estate plan should include a plan for possible long term care expenses. No one likes to think about spending their last days in a nursing home, but technology today is keeping us living longer and living longer with chronic illnesses. If you or your spouse should need a nursing home, and you have no planning in place, you may be facing a medical, financial and emotional disaster. Nursing homes in Rhode Island cost anywhere from $9,000 to $12,000 a month. That means most of us go broke quickly if we have to pay for that care from our own assets and income.

What does a long term care plan look like?

It might be insurance. It might be an asset protection trust. It might be rearranging your present assets. It might be veteran’s benefits. Each plan is unique. Make sure you have your own plan.

4. Share Your End Game.

A legal guardianship is a formal adjudication that an individual lacks legal capacity in one or more areas. If instituted, a guardianship deprives the individual of his or her ability to act legally in the area of incapacity. Your personal plan for incapacity is designed to avoid the need for a guardianship, however, it is still important for you to name the person or persons you would want as your guardian if a guardianship could not be avoided. You can do that in your durable power of attorney. By making a clear statement of your wishes you can make the process easier for your family and avoid unnecessary conflicts or power struggles between children or other family members. This is especially important for blended families.

Lastly, make sure your loved ones know your wishes regarding end of life planning and extraordinary medical procedures. In addition to your living will, make sure you “have the conversation” with those close to you and provide them with an opportunity to understand what matters most to you in the end.

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