After the Alzheimer’s Diagnosis: Legal Planning

Erica Wood, Esq.

Commission on Law and AgingAmerican Bar Association

National Press FoundationMay 24, 2011

Today’s Talk …

Key steps to get affairs in order after diagnosis of serious illness such as Alzheimer’s disease

– Paying for health care and support– Managing health and personal decisions– Managing money and property– Other key planning considerations– Last resort: guardianship– Get legal documents in order

Plan How to Pay for Health Care and Support Needs

• Employer-based disability benefits– Some employers have short-term or long-term disability

insurance

• Social Security disability benefits– Recent SSA decision to fast track disability decisions

for individuals with Alzheimer’s disease

• Supplemental Security Income benefits– Means tested program by SSA

• Veterans benefits– Broad array of financial benefits

Plan How to Pay for Health Care Needs

• Medicare– Primary payer for individuals with Alzheimer’s disease; eligible at

65 or after 24 months on SSDI

• Private health insurance – Employer-based or private insurance– Long term care insurance

• Medicaid– Federal/state program for low income individuals and children– Each state’s program is different

• Veterans benefits– Broad array health care benefits, including long-term care benefits

and nursing home care

Managing Health & Personal Decisions

• At some point, someone else will have to make health care decisions for an individual with dementia

• Who will be the decision maker?• What guidance will be provided in advance?• How will it be communicated?

What is Surrogate Decision-Making?

Families decide (Devolved/Default)

Courts decide (Displaced)

Individual(Directed)

Others designated by individual (Delegated)

Health Care Advance Directives

• In the 1970s -1980s, states generally enacted multiple laws: Living Will, Health Care Powers of Attorney with overlap from consent laws.

• Today about half the states have combined/ comprehensive Advance Directive laws

• But still much variation in detail, especially focused on forms.

Types of Advance Directives

• Living Wills – • Directive that provides guidance or instruction

about the care and decisions wanted• Usually includes specific instructions on life-

sustaining conditions

• Power of Attorney for Health Care• Choose an agent/proxy (and successor) to make

health care decisions if unable to make them• Should be someone who can be a strong

advocate and willing to make difficult decisions

What ADs Can Do1. CAN be an important part of a

communication process in “advance care planning”

2. CAN help you stop and think and DISCUSS.

Less about specific medical decisions, more about GOALS, VALUES & PRIORITIES:

3. CAN empower and give direction if reflective of the patient’s voice.

Not the legislature’s canned language.

What ADs Can’t Do

• Can’t provide cookbook directions.• Can’t change fact that dying is

complicated.• Can’t eliminate personal ambivalence.• Can’t be a substitute for Discussion.• Can’t control health care providers.

30 years of Research on Advance Directives

1. Most people don’t do. 2. Hard to understand the forms.3. Standard form not useful guidance. 4. People change mind.5. Agent/proxy slightly better than

clueless.6. Health care providers clueless about

the directive. 7. Even if providers know directive

exists, it’s lost in space.8. Even if in the record, it’s still lost in

space.

Communication is Key to Advance Planning

• Not every medical decision can be anticipated

• Communicate wishes, quality of life goals, values and priorities that are important

• Discussions are difficult but most important for loved ones and the individual with the disease

Guidance for Health Care Agents, Proxies

Steps in making medical

decisionsWorking within health

care systemAddressing disputesSpecial challenges

in medical decisions

“Advance Care Planning”

• Less focus on formal instructional documents• Legal focus primarily on naming a proxy• Discussion oriented (with proxy, family, health

care providers)• More broadly focused on goals + values,

spiritual questions, family matters• Less treatment focused, more on quality of life• Conversion of goals to a portable plan of care:

POLST if available

POLST – Why It Is a Sea Change

• Last 30 years: standardizing patient communications –

statutory advance directives• POLST Paradigm – standardizing physicians EOL

orders in order to implement patient’s goals of care. Focus on here and now, high probability crises.

• POLST – requires:1. Find out patient’s wishes re: CPR, care

goals (comfort vs. treatment), antibiotics, N&H.

2. Translate into doctors orders on visually distinct (bright pink) med file cover sheet.

3. Ensure form travels with patient.

At least 12 States have a version of POLST:CA, HI, ID, MT, NY, NC, OR, TN, UT, VT, WA, WV

Default Surrogate Laws(Family Consent)

• Range/Priority of Surrogates

• Scope of Decision Making Authority

• Triggers/Pre-conditions

• How Disagreements are Handled

• Close Friend and Unbefriended Patient

Summary chart:

http://new.abanet.org/aging/Pages/StateLawCharts.aspx

Make a Plan to Manage Money & Property

• Planning for management of affairs while alive helps maintain control to the greatest extent possible

• Variety of legal tools • Powers of Attorney• Representative Payee• Joint bank accounts• Inter-vivos or Living Trusts

• Advantages and disadvantages of each

Powers of Attorney

• For property

• Durable – since planning for incapacity

• Document by which one person (“principal”) gives legal authority to another (“agent”) to act on behalf of the principal.

• Generally must be signed & notarized.

• Governed by state law

PoA Advantages/Disadvantages

Promotes autonomy – puts you in drivers seat

Avoids guardianshipCuts costs Helps family members

Lack of monitoringUnclear standards for agent conductLack of awareness of risksBroad decision-making authority

Types of POA Abuse

In creating of the POA (power given, not taken) Incapacity at execution Forgery/Fraud/Misrepresentation Undue influence

Implementing POA (agent is a fiduciary) Transactions exceeding intended authority Transactions conducted for self-dealing Transactions contravening principal’s expectations

“Brooke Astor’s Son Guilty in Scheme

to Defraud Her” • Wealthy NY socialite Brooke Astor, Alzheimer’s, age 105• Estate more than $180 million• Son served as power of attorney• Gave self unauthorized raise of $1 million• Other counts of financial exploitation• Neglected mother’s care while enriching self• Exemplifies financial

elder abuse

Build Protections into DPA

• Choose someone you trust

• Limit gifting powers

• Require co-signatory on important transactions

• Require periodic accountings

• Revocable as long as still have capacity

• Seek advice of attorney to customize & ensure meets state law requirements

Uniform Power of Attorney Act

Clear statement of agent’s dutiesAct in accord with principal’s expectations, best

interestsStringent requirements for exercising “hot

powers” likely to dissipate property or alter estate plan

Third party refuse to honor if suspect abuseLiability of agents who commit malfeasanceSee www.nccusl.org .

Other Options• Joint Bank Accounts: pros & cons

– Provides easy access to funds to pay bills– Joint owners have complete access to all funds– Funds may be available to pay joint owner’s debts– Upon death surviving joint owner may become sole

owner regardless of will

• Inter-vivos or “Living” Trust: pros & cons– Legal arrangement created by contract – Holds property for the benefit a person or persons– Can provide for management of assets during

incapacity, avoid probate and provide for care of minors or disabled persons

– Can be expensive to draft, to transfer property into the trust and to pay a professional trustee (if used)

Other Options

• Representative Payee

– If receive SSA, civil service, railroad retirement, VA benefits, agency may require individual to be appointed as a representative payee

– Once appointed, the rep payee has authority to manage the relevant income -- but not other income or assets.

– Rep payee may have to file an annual report (SSA)

Other Key Planning Considerations

• Develop succession plan of a business– Including power of attorney to run a business and buyout agreements

• Consider other public benefits, if appropriate– Including food stamps, state prescription drug benefit programs, energy

assistance

• Prepare will– Legal document that provides for distribution of some or all property at

death– If a single parent of a minor or disabled child, can designate a guardian

of the child

• Plan for care of Dependents– Nominate or appoint a guardian for minor/disabled child– Arrange for financial support for minor/disabled child

Guardianship

• Individual (or agency) appointed by court (probate, general jurisdiction) . . . .

• With power and duty to make personal and/or financial decisions . . . .

• On behalf of another person . . . • Whom court determines lacks decisional

capacity.• Terminology – “guardian” “conservator” and

more

Guardianship: A Double-Edged Sword

• Parens patriae roots of guardianship• Guardianship “unpersons” individual (Associated

Press, 1987)• Loss of fundamental rights• Inherent Tension

– Between rights and needs – Between autonomy and beneficence– Between self-determination and protection

51 State Guardianship Laws; Variability in Practice

How is a Guardian Appointed?

• “Any person” files petition

• Notice, possible appointment of counsel, “guardian ad litem,” court visitor

• Hearing

• Judicial order – “plenary” or “limited”

• Bond

Principle of Least Restrictive Alternative

• Growing use of alternatives to guardianship – Representative payee– Power of attorney– Trust– Supports such as money management– Guardianship as LAST RESORT

• Enactment of limited guardianship provisions• Use of “substituted judgment standard of

decision-making”

Guardian Accountability – Who Guards the Guardians?

•Reports & Accounts•Protection of Assets•Court Review of Reports & Accounts•Investigation,Verification & Sanctions•Guardian Training/ Assistance•Funding for Monitoring•Guarding the Guardians: Promising Practices for Court Monitoring, AARP/ABA (2007)

Get Legal Documents in Order

• Collect all important legal documents– Including birth certificate, citizenship papers,

advance directives, power of attorney, trust documents, will and more

– Store important legal documents in a safe and accessible location.

– Let people know where the important documents are kept

Conclusion

• When faced with diagnosis like Alzheimer’s disease, its critical to get financial and legal affairs in order.

• Communicate with family, close friends and trusted legal/financial advisors.

• Understanding options and making informed decisions can help maximize control and minimize anxiety at a difficult time.