How many of us have items on our “To Do” lists, such as: “Do a new Will, Do a health care advance directive or living will?” Whenever we talk with clients about estate planning, we always emphasize one of the most important documents to execute, and especially for elders to have in place, is an Advance Directive, also known in other states as a Health Care Proxy, and/or a Living Will, by which you authorize others to make health care decisions for you, if you cannot, and to express your end-of-life care wishes. Does everyone need them? Yes, because none of us knows when a disability might strike us, either temporarily or permanently.
An Advance Directive is a two part document comprising (1) a Durable Power of Attorney for Health Care, in which you (the “principal”) appoint an agent to handle medical decisions should you be incapacitated or unable to communicate your wishes, and (2) a “Living Will,” by which you authorize two physicians or a physician and nurse practitioner to make end-of-life decisions. See the standard form and an informational brochure at www.healthynh.com.
The Durable Power of Attorney for Health Care does not kick in unless a physician determines that you do not have the capacity to make health care decisions or to communicate. Once the Durable Power of Attorney for Health Care has been activated, the agent takes over and makes decisions that you have authorized the agent to make. The general rule for the medical establishment is that physicians and nurses must treat unless told otherwise. An agent, if authorized by the principal, may agree to a “Do Not Resuscitate” Order and may decline artificial feeding and hydration. If the patient is near death or in a persistent vegetative state, an agent, if authorized, can make decisions not to start medical treatment or, if it has been started, to discontinue it. We explain to our clients that the agent will have all of the abilities that the client has to make medical decisions, if the client so indicates on the document, including continuing care, if that is appropriate. .
One of the most important options is giving an agent the power to authorize medical treatment over the principal’s objection. There may be times when a patient is medically incapacitated but is still communicating, due to hallucinations, dementia or other illnesses. For instance, a demented patient may not wish to have antibiotics or pain medication, which would otherwise be routinely accepted. The person may only be treated over his or her objection if the agent is explicitly authorized to agree to this in the Durable Power of Attorney for Health Care.
The “Living Will” allows you to authorize two physicians, or one physician and a nurse practitioner, to make end-of-life decisions for you. Some of our clients like having this option. It is like an additional backup, in case the agents they named cannot make decisions for them. Other clients decline to execute the Living Will, preferring instead to leave the decisions on their health care to the agents they appoint. Either choice is fine.
Durable Power of Attorney for Financial Purposes
The first word in the title, “Durable,” is important. It means that the “power” is still good, even if the person becomes incapacitated. New Hampshire laws are very specific, and any person living in this State must have a Durable Power of Attorney that complies with New Hampshire law in order for an agent to act for him or her using that power in this State.
Generally, unless a client has a very specific task for which they need an agent to act, such as purchasing a house and signing the paperwork at a closing, we draft Durable Powers of Attorney that are very broad. This allows your agent to make any decisions concerning your property that you would be able to make: paying bills, opening/closing bank accounts, handling matters in trust, dealing with employment benefits, selling property, etc. The important thing to remember is that your agent is acting as a “fiduciary.” That means the agent is acting for your benefit, not for his or herself. New Hampshire requires that the agent sign acknowledging that.
An up-to-date Power of Attorney is important. Without it, your family would need to go to court to get a guardianship over you to handle your affairs. That is very costly! One document can prevent the need for that. Some of our clients may in the future need to plan to qualify for Medicaid, if they need to move to a skilled nursing facility. As many people know, Medicaid is a poverty program and is not designed for people who can pay their own way at a nursing home. As most people also know, nursing homes are so expensive these days that they often wipe out the savings of individuals and couples. There are ways to transfer assets permitted by the Medicaid qualification laws, but it must be done very carefully. Especially in the context where a spouse will remain in the couple’s home, there may be ways to transfer assets to benefit that “community spouse,” a disabled child, or certain others, if the ill spouse, parent, or sibling needs to enter a skilled nursing facility. It is important for the Durable Power of Attorney to contain authorized powers to “gift” or “convey” assets that comply with Medicaid statutes. Without these powers, the family may have to petition the Probate Court to engage in this type of planning, which, again, can be very costly. The money spent on getting the document properly prepared can save tens of thousands of dollars in Court costs and legal fees to “cure” the situation if advanced planning is not done.
So add to your “To Do” list to get this important document drafted or updated today!