Christopher B. Kroll & Associates – Elder Law Solutions

     Elder Law attorneys focus on the various problems and issues that concern the elderly and their families.        

     The typical issues that an Elder Law attorney can assist with are:

• A loved one needs to be placed in a nursing home.

• A determination needs to be made regarding Medicaid qualification and planning the preservation of assets to avoid spousal poverty

• Incapacity planning, including the preparation of Financial and Medical Powers of Attorney

• Probate issues, including guardianship and conservatorship, and estate administration

• Estate planning, both during one’s lifetime and planning for the distribution to beneficiaries after death

     Professional planning for possible disability or eventual death is necessary for everyone.  An experienced Elder Law  attorney can assist with the necessary planning and prepare any documents that are needed.

     Whether or not a person has capacity is a determination made by the Court.  It is a legal concept and the definition varies by jurisdiction.  A doctor’s opinion on capacity remains an opinion until a judicial ruling on the evidence is given.  All adults are presumed to be competent until proven otherwise.

          Under current Michigan law, an “incapacitated person” is defined as an individual who is impaired by reason of mental illness, mental deficiency, physical illness or disability, chronic use of drugs, chronic intoxication, or other cause, to the extent of lacking sufficient understanding or capacity to make or communicate informed decisions. MCL 700.1105(a).  If a person (other than a minor) is determined by a Court to be legally incapacitated, then a guardian is appointed to provide continuing care and supervision for that individual.

     The law recognizes that a person is rarely totally incapacitated.  Capacity may depend on the type of decision that needs to be made or the surrounding circumstances.  For instance, a person may be capable of handling personal safety issues but not money matters.  Often the Court will consider appointment of a limited guardian that is only allowed to assist the incapacitated individual under specific circumstances.

     Many people bypass lawyers and create their own wills, trusts, powers of attorney and other estate planning documents with the help of online tools and books.  Does this approach breed mistakes?  When it comes to legal issues, does one size fit all?

      There are many risks involved with preparing estate planning documents yourself.  One risk of the do-it-yourself approach is that self-written documents may contain holes that can lead to costly errors.  If the documents are  not properly witnessed or notarized, then the documents could be considered invalid.  In addition, a self-written documents may  inadvertently give someone more power than you want (when writing a durable power of attorney).  The do-it-yourself approach to estate planning can lead to a  false sense of security; answering one question incorrectly or overlooking something such as appointing a guardian for children can lead to major problems down the road.

     Bottom line:  consult an attorney that is knowledgeable in estate planning when preparing your estate planning documents.  Spending a few dollars now may save your estate  thousands of dollars later to fix problems that your do-it-yourself documents created.

     A Living Will is a declaration to physicians that you wish life-sustaining procedures to be withheld or withdrawn if you are in an incurable condition and your death is imminent or if you are in a persistent vegetative state. It is a document that outlines your wishes to your physicians and the patient advocate (agent) designated in your health care Power of Attorney. 

     A Power of Attorney for Health Care appoints an agent to make most decisions related to your health care if and when you are unable to make those decisions yourself. If you specifically grant the power, your agent can decide to withhold or withdraw non-orally ingested nutritional support and fluid maintenance, admit you to a nursing home or community-based residential facility, and make other health care decisions.

     If you have both a Living Will and a Power of Attorney for Health Care, the Power of Attorney for Health Care controls if there is any conflict between the two.

A guardian is a person appointed by a court to serve as a substitute decision maker for a person called a ward who, because of an impairment, is found by a court to be incompetent.   

The court may appoint one or more persons to meet the ward’s needs. The court may give the guardian authority to make personal decisions for the ward, including providing informed consent for health care and medication, deciding where the ward will live, and deciding who will provide social and supportive services for the ward. This type of guardian is a “guardian of the person.” The court also can give the guardian authority to manage the ward’s money and other property. This type of guardian is a “guardian of the estate”  or more commonly referred to as a conservator.

The court has broad discretion in deciding whom to appoint as guardian and/or conservator. The court makes the decision based on what it believes to be in the best interest of the proposed ward. The judge will consider the preference of the proposed ward or  adult relatives or friends of the proposed ward.  Often, an adult family member or a family friend is the best choice to be appointed as guardian and/or conservator; however, non-family members are often appointed as well.

     Many seniors mistakenly believe that Medicare covers nursing home stays. In fact, Medicare’s coverage for nursing home care is quite limited. Medicare only provides up to 100 days of “skilled nursing care” per illness, and there are a number of requirements that must be met before the nursing home stay will be covered.

     In order for a nursing home stay to be covered by Medicare, the individual must enter a Medicare approved “skilled nursing facility” or nursing home within 30 days of a hospital stay.  The hospital stay must have lasted at least three days, not including the date of discharge. The care in the nursing home must be for the same condition as the hospital stay. In addition, the individual must need “skilled care.” This means a physician must order the treatment, and the treatment must be provided daily by a registered nurse, physical therapist, or licensed practical nurse. Finally, Medicare only covers “acute” care as opposed to custodial care. This means that Medicare only covers care for individuals who are likely to recover from their medical conditions, not care for individuals who only need assistance with activities of daily living, including: eating, bathing, continence, dressing, toileting, and transferring.

     Once the individual is in a nursing facility, Medicare will cover the cost of a semi-private room, meals, skilled nursing and rehabilitative services, and medically necessary supplies.  For the first 20 days, Medicare covers 100 percent of the costs.  Beginning on day 21, the individual is responsible for a daily co-payment amount.  This daily copayment amount may be covered by the individual’s Medicare supplemental insurance policy, assuming he or she already has one.  After the 100 days are up, Medicare nursing home benefits end, and the individual is then responsible for all costs moving forward.  At that point, many individuals will turn to Medicaid for assistance.

     Advance directives are legal documents that allow you to put in writing what kind of health care you would want if you were too ill to speak for yourself.  Advance directives most often include the following:

• A health care proxy (durable power of attorney)

• A living will

• After-death wishes

      A health care power of attorney is used to name the person you wish to make health care decisions for you if you aren’t able to make them yourself.  A living will states which medical treatment you would accept or refuse if your life is threatened.  After-death wishes include choices such as organ and tissue donation.    

     Talking with your family, friends, and health care providers about your wishes is important, but these legal documents ensure that decisions are followed.  It’s better to think about these important decisions before you are ill or a crisis strikes.

Question:  My Will was drafted ten years ago and the witnesses worked at a bank that is no longer in business.  Is my will still valid?

Answer:  It’s unlikely that the witnesses will ever be involved in your estate unless the will is contested. If you’re still concerned, you should consult with an estate planning attorney. On the other hand, since your will was prepared a decade ago and has not been reviewed, perhaps it’s time to ask a lawyer to review it to make sure it’s still valid. Much has happened in the last 10 years. Even if your family and financial situation haven’t changed, the estate tax regulations and the inheritance tax regulations in many states have changed.

In addition to a will, a basic estate plan usually includes a “durable power of attorney,” which delegates the power to legally handle your financial affairs should you become incapacitated, and an “advance directive,” which lets you legally direct your health care preferences in the event of your incapacity or terminal illness. Involving a lawyer, which may not cost as much as you think, gives you the added advantage of having someone to consult if your situation changes or if you hear about a change in the regulations that might apply to you.

     With Senate Democrats unable to persuade Republicans to extend the 2009 estate tax law for even a couple of months until a more permanent solution could be devised, there is currently no tax on the estates of those dying during 2010.  Although congress may reinstate the tax retroactively in 2010, perhaps as part of broader tax reform, this is by no means a certainty.

     If Congress fails to act, a few thousand very wealthy families will have reason to celebrate, while tens of thousands of taxpayers of more modest means will pay capital gains on inherited assets–and executors will face additional and confusing administrative burdens.  And if Congress does change the law retroactively, extensive litigation over inheritances is almost guaranteed.

     Congress has had nine years to prevent this from happening but hasn’t been able to.  Under the provisions of a bill enacted in 2001, the value of estates exempt from the tax has been gradually raised over the past eight years while the tax rate on estates has been reduced.  In 2009, only estates valued at $3.5 million or more were taxed at a rate of 45 percent.  For 2010, according to the 2001 law, the estate tax disappears entirely, only to be restored in 2011 at a rate of 55 percent on estates of $1 million or more.

Under Michigan law, funeral arrangements can be made only by the next-of-kin.  Their wishes supersede the expressed wishes of the deceased contained in the deceased’s Will or other written or oral communication.  The only exception to this is if the deceased has arranged for his body to be donated to medical science, in which case, by statute, the deceased’s wishes must be respected.  The personal representative or executor of the estate has no special authority to make funeral arrangements contrary ot the wishes of the next-of-kin.  Who is the next-of-kin?  In general, next-of-kin are determined in the following order:  spouse, children, grandchildren, parents, siblings, nieces and nephews, grandparents, aunts and uncles, and first cousins.  If there are several next-of-kin within the same degree of kinship, then most funeral directors will require that all the next-of-kin be in agreement before proceeding.  The law has no provision for “majority rule.”