C19 UPDATE: If You Have Not Yet Named Someone with Medical Power of Attorney, Do It Now

If you have not yet named someone with Medical Power of Attorney (which is also called a Health Care Proxy), stop procrastinating and get this crucial planning in place now.

What is a Medical Power of Attorney?

A medical power of attorney is a legal document you use to give someone else authority to make medical decisions for you when you can no longer make them yourself.  This person, also known as an agent, can only exercise this power if your doctor says you are unable to make key decisions yourself.

Other Terms for Medical Power of Attorney

Depending on the state where you live, the medical power of attorney may be called something else. You may have seen this referred to as a health care power of attorney, an advance directive, advance health care directive, a durable power of attorney for health care, etc. There are many variations, but they all mean fundamentally the same thing.

Be aware that each state has their own laws about medical powers of attorney, so it’s important to work with a qualified estate planning attorney to ensure your decisions will be enforced through legally binding documents. Also, some states may not honor documents from other states, so even if you made these decisions and created documents in another state, it’s wise to review with an estate attorney to ensure they are legally valid in your state now.

What Can My Medical Agent Do for Me?

Just like there are many different terms for the medical power of attorney, there also are different terms for the medical agent – this person may be referred to as an attorney-in-fact, a health proxy, or surrogate.

Some of the things a medical POA authorizes your agent to decide for you:

  • Which doctors or facilities to work with and whether to change
  • Give consent for additional testing or treatment
  • How aggressively to treat
  • Whether to disconnect life support

We are ready to help walk you through these decisions, understand the ramifications of your choices, and memorialize your plans in binding legal documents. We are currently offering no-contact initial conferences remotely if you prefer. Book a call now and let us help you make the right choices for yourself and your loved ones.

 

When Is It Time For My Dad To Give Up The Car Keys?

Because the odds of a fatal crash go up significantly at 70, adult children want to make sure their elderly parents do not become part of those unfortunate statistics. Taking a proactive approach to making certain that a parent or other vulnerable adult is still fit to drive is the key, says AARP in its recent article entitled “Is It Time for Your Loved One to Retire From Driving?”

Many seniors derive a sense of freedom and independence—perhaps even a source of pride from driving—so it’s a sensitive subject. One option is to ask your parent’s physician to broach the subject. If your loved one’s physician doesn’t bring up the topic, ask her to address it.

It’s really not realistic to expect your aging parent to hand over the car keys at the appropriate time. Some might, but others will refuse. Experts say that as we get older, we are apt to develop a more positive outlook on things. However, this gives us a false sense of security when it comes to things like driving. However, normal aging is linked with decreased reaction time, vision problems and hearing problems—all of which place them at greater risk.

Some medical conditions —like arthritis, cardiovascular disease, dementia, glaucoma and macular degeneration, Parkinson’s disease and stroke — can compromise a senior’s driving abilities. The more prescriptions a senior takes and the more medical conditions a senior has, the greater risk when a senior gets behind the wheel.

In addition to the safety of an aging parent and other drivers, a senior who drives but shouldn’t, may also put grandchildren at risk.

Some other reasons to be concerned about the senior’s driving abilities include driving too slowly or too fast, getting lost in the neighborhood, a recent car accident or close call, difficulties with parking, getting tickets for driving violations and running red lights or stop signs.

One way to gauge an aging adult’s driving capabilities is to run an errand with them. Some may also recognize some of the signs in themselves and realize that they’ve been feeling less confident driving under certain conditions.

You can always encourage your mother or father to have an older adult driving evaluation, which may be available at hospitals and administered by occupational therapists or driving rehab specialists. This evaluation won’t affect their driver’s license, which may ease a parent’s reluctance to have one.

There are 33 states and DC that have special provisions for mature drivers. Some states require vision tests and might include in-person license renewals, more frequent renewals and road tests.

Reference: AARP (November 5, 2019) “Is It Time for Your Loved One to Retire From Driving?”

 

Should You Name a Trust as an IRA Beneficiary?

An IRA may not be placed into a trust while the account owner is alive. An IRA also may not be owned by more than one person. The IRA owner can name a trust as a beneficiary of an IRA. Just because you can do this, does not mean it is a good idea, says the article “Naming Your Trust as an IRA Beneficiary” from The Press of Atlantic City. The IRA owner could also take all of the funds and deposit them into a trust, but that would be another bad idea. Why? It is because all of the funds withdrawn would be subject to income tax.

Therefore, why would anyone want to name a trust as the beneficiary for an IRA?

  • If you want an heir, like a second spouse, to inherit the income but not the balance of the principal after you have died. This is done so the second spouse cannot name their children as the beneficiary, instead of the original account owner’s children.
  • If you are concerned with the ability of heirs to manage your IRA funds wisely, a trust can be the beneficiary and you can set the terms with which the heirs can have access to the funds.
  • Minor children cannot be direct beneficiaries of an IRA, and a disabled child may become ineligible for government benefits, if he or she receives an inheritance directly.
  • If you want your IRA funds to be inherited by grandchildren instead of children, a trust is the way to go.
  • If creditor protection is a concern under the laws of your state, a trust would keep the IRA funds from being tapped by claims of creditors.

Here is why you would NOT want to name a trust as the beneficiary of your IRA:

  • There are no tax benefits to having the trust inherit your IRA.
  • Trusts have expenses. Trustee fees and tax rates on funds left inside the trust, but not in the IRA, may be substantially higher than personal income tax rates, depending on the beneficiary.
  • The trust will have to keep going long after your own death. That means tax returns must be filed, fees paid, and the trustee must maintain the trust.
  • Some companies that hold IRAs do not allow trusts to be beneficiaries of IRAs. Before you get into figuring out if this is the right route for you, find out first if your custodian will permit it.

There are many other facts to consider before deciding to name a trust as the beneficiary of an IRA. Speak with your estate planning attorney to see if it is a suitable solution for you and your family.

Reference: The Press of Atlantic City (February 13, 2020) “Naming Your Trust as an IRA Beneficiary”