Today you are healthy and capable of managing your own affairs. Life can throw you curve balls. Who can manage your affairs or make medical decisions for you should you become incapacitated due to an accident or medical condition such as Alzheimer’s Disease? You may already be familiar with the emotional toll that the incapacity of a loved one can have on a family. Are you also familiar with the effect that incapacity can have on the family under the law?
If an incapacitated person did not designate someone to make medical decisions and manage his or her affairs, his or her loved ones may have to petition the Court to have the person declared incapacitated and have a guardian appointed. If the incapacitated person did not previously discuss his or her wishes with his or her loved ones, disagreement as to whom should make these decisions could result. A simple conversation and the necessary paperwork can avoid a complex and costly court matter as well added stress on the family unit.
Two documents typically prepared for use in the event of temporary or permanent incapacity are the Durable Power of Attorney and the Healthcare Surrogate designation. The same person may be selected to act as the Health Care Surrogate and the Attorney in Fact or different persons may serve in these capacities.
A Durable Power of Attorney allows the person designated as the Attorney in Fact to make decisions for the incapacitated person as authorized under the document. A Durable Power is utilized instead of a General Power because a General Power lapses when the person executing the power becomes incapacitated, while a Durable Power survives incapacity. An effective Durable Power of Attorney is drafted to be both broad and specific. The power is broad in that the Attorney in Fact is typically given the power to make decisions in most areas of the person’s life. Changes in the law no longer allow a general statement that the Attorney in Fact can do anything that the person could have or would have done. To have legal effect the powers being granted to the Attorney in Fact must therefore be as specific as possible.
Without a Durable Power of Attorney the incapacitated person’s caregiver may not be able to manage the person’s affairs. For instance, if the incapacitated person normally pays his or her mortgage by writing a personal check and the caregiver is not listed on the checking account, then the caregiver does not have access to these funds and is therefore unable to pay the incapacitated person’s mortgage and other outstanding bills. Another instance where having a Durable Power of Attorney becomes critical is in the case where two persons, such as a husband and wife, own property together and one of the persons becomes incapacitated and there is a need to sell the jointly owned property. Since the incapacitated person is unable to sign the deed to the property, the property cannot be sold without court intervention.
In spite of existing laws that govern the conduct of a person acting under a power of attorney, there are obvious and inherent risks involved when a person grants another person powers, such as those previously illustrated, over their assets. It is, therefore, extremely important to carefully consider the person being selected. It is imperative that the person be trustworthy, responsible, and able to manage the affairs of the incapacitated person while considering the choices that the incapacitated person would have made if able to do so.
While many existing Durable Powers of Attorney contain language that state that the designated person can make medical decisions for the incapacitated person, it is recommended that a Designation of a Health Care Surrogate be used instead. This document is more detailed and allows the person to choose what specific power their surrogate can have and under what terms. Additionally, the language typically contained in Durable Powers of Attorney may not be sufficiently specific to comply with the most current changes to the Health Insurance Portability and Accountability Act (“HIPAA”). Due to the privacy regulations within HIPAA doctors and medical facilities cannot provide a patient’s medical information to someone other than the patient without the patient’s consent unless the patient is a minor or has been declared incapacitated by the court. A minor is treated as incapacitated under the law which defines incapacity as a judicial determination that a person lacks the capacity to manage at least some of the person’s property or to meet at least some of the person’s essential health and safety requirements.
This inability to obtain medical information can be very difficult for the patient’s loved ones. It can be particularly frustrating for parents who are dealing with a child who is 18 years or older and being treated for mental illness. According to the U.S. Department of Health and Human Services half of mental health disorders show first signs before the age of 14 and three quarters of mental disorders begin by the age of 24. If the child is no longer a minor under the law, the hospital does not even have to speak to the parent about the child’s condition. A caveat to this is if the child is on the parent’s insurance, than the parent is entitled to some information. The health care decisions are left up to the young adult even in cases of drug induced psychosis and overdoses. If the parent had the child admitted to a mental health institution, the child could be released at his or her request and against the parent’s wishes as the admittance is considered voluntary in nature. Without a prior existing Designation of a Health Care Surrogate from the young adult, the parent may feel helpless and have to resort to hiring a lawyer and having the child declared legally incompetent.
On the other side of the spectrum, adult children can encounter the same frustrations when caring for an incapacitated elderly parent. According to the U.S. Dept. of Health and Human Services, in 2013 there were 44.7 million adults over the age of 65 which comprised 14.1% of the United States population. This percentage is expected to reach 21.7 by 2040. Especially vulnerable among this population are those that suffer from Alzheimer’s Disease. According to the Alzheimer’s Association over 5 million Americans suffer from Alzheimer’s Disease and this number is expected to reach 7.1 million by 2025. Alzheimer’s takes a physical and emotional toll on the caregiver as the patient requires care and supervision 24/7. If the Alzheimer sufferer designated a Health Care Surrogate and Attorney in Fact while still mentally capable, the caregiver is able to make medical decisions and manage his or her affairs without having to spend precious time and money in having the patient adjudicated incapacitated by the Court.
There is no crystal ball in life. Only choices. One can opt for the “this will not happen to me” approach and take no action or one can opt for the “what if” approach and use valuable tools available such as a Designation of a Health Care Surrogate and a Durable Power of Attorney to plan for some of life’s unexpected curve balls.
Please stay tuned for our next topic “Who Get’s What?” for a discussion on who is entitled to a person’s assets upon death
