Advice for the End of a Not-So-Normal Year–Review your Will, Trust, Healthcare Documents

In a “normal” year it would be good advice to suggest that you review your estate plan, which could be your will, your trust if you have one, your healthcare documents, among other documents, at the end of the year.  With 2020 and what is not a “normal” year, this advice takes on more meaning.  Not surprisingly, much of the advice given in my blog post is due to the COVID-19.  Generally, COVID-19 or not, you should review your estate plan each year. 

Reason #1: Things Change

Our assets and family dynamics change over time. This is inevitable and applies to everyone.  Review how your assets might have changed and see if the changes are covered in your documents.  Did you move, and deed your new house to your trust?  If family dynamics have changed, did you check to see if your will needs changed also?  The biggest change would be divorce, and while some documents treat your ex as having predeceased you, some will still treat him or her as a beneficiary if the former spouse is not removed from the document.  Other dynamics that might affect your choices are the death of someone you’ve named as a beneficiary or as a fiduciary (such as an executor of your will); the birth of a child or grandchild; the divorce of others such as the guardians you have named for your children. 

The pandemic has created several changes for many of my clients, particularly the composition of households. Now, households are accommodating the needs of elderly family members moving in rather than moving into assisted living, college kids attending school from home, and other changes.  These changes can affect who you choose to list as a power of attorney now that some family members might be living closer or further away, how you structure what happens to your house if you die since your household might include parents or others who might wish to remain in the home. 

Another change is the law, specifically the SECURE Act.  Your 401k or IRA will be affected by the SECURE Act, it is just a matter of “how.”  The Act significantly changed the timing of distributions for inherited IRAs and changed rules regarding your beneficiaries.  Check to see who is listed as beneficiary and whether that should be changed, whether a conduit trust is still beneficial, and other considerations.

Reason #2:  New Considerations for Healthcare Documents

The pandemic has created new considerations that might affect your thoughts about your healthcare documents, specifically, your living will (whether you want artificial life support or not) and your healthcare power of attorney.  These are critical documents that are necessary in managing your medical affairs should you become sick or incapacitated.

First, consider who you have listed in these documents to make decisions for you.  Generally, people listed should be able to be “bedside.”  You might have listed your brother across the country as your healthcare power of attorney, but will he be able to travel to get to you?   Would a trusted friend or other family member who lives close to you be a more appropriate choice during a pandemic when there are greater restrictions on, and requirements prior to, travel?

Second, clients have expressed concern regarding their living will and whether the fact that they state “no artificial life support” means they will not be put on a ventilator if they need one, if diagnosed with COVID-19.  The Ohio living will document states that, if death is only being prolonged by someone in a terminal condition or permanently unconscious state, then two physicians can determine to end artificial life support, or “pull the plug.”  With COVID-19, a ventilator is used as a course of treatment, not to prolong death, and will be used to treat you.  The living will document does not prohibit artificial means for breathing or keeping someone alive; rather, the document reflects your wishes to permit doctors to cease using artificial life support if no reasonable course of treatment will help and death is simply being prolonged. 

Conclusion:

It is a gift to your family to plan what you wish to happen if you are unable to take care of your medical or financial affairs, and to plan what you want to happen to your assets when you die.  I hear so often about how difficult these decisions are for family to make during a period when they are grieving your death, or scrambling to figure out how to pay your bills if you are incapacitated.  The pandemic might have many people wanting to discuss anything but death and incapacity, but it has also forced everyone to consider “what if?” with their own mortality, and consequently their family’s future. 

If you would like to discuss wills, trusts, healthcare documents, or any estate planning questions, feel free to email me at julie@juliemillslaw.com.  I am happy to help you plan and prepare.

Happy “National Mutt Day”!

December 2nd is recognized as #National Mutt Day, a day all about “embracing, saving and celebrating mixed breed dogs.” My boy Bill (pictured), is beagle-mix and has been embraced and celebrated since the day we rescued him.

Our pets are family. As with family, we want to make sure they will have what they need should something happen to us. As an attorney experienced in pet estate planning and who is involved in animal welfare organizations, I have seen pets taken to shelters after the pet’s owner dies because surviving family don’t want the pet, and no plan was put into place to care for the pet. Providing for your pets now, through a will or trust, will ensure that your pet goes to someone you trust instead of a shelter.

Check out my previous blog post on pet estate planning, What happens to my pet if I die? to see how you would plan for your pet, then contact me to get started at julie@juliemillslaw.com.

Will you have to pay your parent’s nursing home bill?

I have written before on how common it is for family members to unwittingly make themselves liable for a nursing home bill when they sign admission papers for a loved one going into a nursing home (“Has a nursing asked you to sign?”). Although it is against the law (42 C.F.R. 483.15(a)(3)) to require a 3rd party to take financial responsibility for the bills of a nursing home as a condition to admitting that person into the facility, it happens frequently. Mom is sitting there, about to move into the facility, Daughter is with the admissions employee who is asking her to “sign here” so Mom can move in. I had it happen to my family member, and I’ve represented clients who signed as a “Family Representative” only to discover they actually signed to accept financial responsibility for all outstanding nursing home bills.

A recent Ohio case finally sheds some light on the law and specific steps that might instruct how to avoid becoming liable for a loved one’s nursing home bills. The case is Village at the Greene v. Smith, 2020-Ohio-4088, and I’ll summarize here how it is applicable to readers facing the possibility of helping a family member or loved one move into a nursing home.

Despite it being illegal, many nursing homes have provisions in their admissions agreements where the accompanying family member (or sometimes a family friend) signs as “Family Representative,” or “Responsible Party” described as someone who agrees to “secure financial information such as Medicaid and Medicare.” These agreements typically include third-party guarantor, or personal guarantee, language. If you sign as the “Family Representative” when you are admitting your mom, or dad, or whomever, into the facility, you’ve likely agreed to be responsible for all unpaid nursing home bills.

In the Village Green case above, Son accompanied Father to the nursing home when he was being admitted. Son correctly refused to sign in his individual capacity, as Family Representative or any other form. Son did sign, however, in his capacity as Power of Attorney for his father. Essentially, he signed on behalf of his father. This would look like “John Doe, POA for Dave Doe” or power of attorney, or agent, etc., instead of signing as just “John Doe.” Eventually Father died and had unpaid nursing home bills, where the nursing facility then brought suit against Son. The appeals court determined that Son, who signed as power of attorney for Father and did not sign in his individual capacity, could not be held liable for his father’s unpaid nursing home bills.

ADVICE

  1. Do not sign your name anywhere on a nursing home admissions agreement, or any additional or ancillary paperwork, unless you are certain it is for contact purposes only. See #3 below.
  2. If possible, have the person being admitted sign the document. If the person is competent but simply physically unable to sign, they can sign an X or something indicating signing. If this isn’t possible, try to have had a power of attorney prepared prior to admission into the nursing home. If you do this, then sign everything as power of attorney. “Jane Doe, POA.” This includes email signatures: “Thank you for the update. Jane Doe, POA.”
  3. If you don’t have power of attorney, and find yourself in a position where you are being asked for your signature and given assurances that you won’t be held liable, write after your name “My signature is not a personal guarantee for financial responsibility.” Get a copy immediately of the signed document, and note the name of the person who told you that you would not be held liable financially. In the situation with my family member, he was told by the admissions employee that “Oh, this is just a formality so we have a family member to contact. We never pursue payment.” Yes, the nursing home pursued the five-figure payment.

Helping a parent or family member through the nursing home admission process is stressful and emotional. Don’t set yourself up for future stress by unknowingly agreeing to be financially responsible for the nursing home bill. Unwinding yourself out of liability can be nearly impossible, and it is far better to not incur liability from the start.

Before you die…

Or this post could have been titled “Ease the burden of loved ones.”  Because I’m an estate planning attorney, the “Before you die…” advice I’d typically give would be to have a will or living trust plan prepared.  I certainly always recommend that advice.  This post, however, is different.

I recently read an article I loved, “You Need to Make a ‘When I Die’ File–Before It’s Too Late.”  The article speaks to the side of estate planning that I rarely participate, and that’s the grieving family part of planning for what happens after you die.  I help my clients get all the documents they need, and advise on decisions that need made.  What struck me about the suggestions in this article though were actions to take that speak to people you love.  The article adds two items to the typical estate planning checklist, i.e., an ethical will and letters to loved ones: “[W]here a legal will transfers assets, an ethical will transfers immaterial things: your life lessons and values.”

An ethical will supplants a traditional will, and might be used to explain why you chose one child to serve as executor over the other child, or why you chose close friends as guardians for your child over your siblings.  “Letters to loved ones” is self-explanatory, and I highly recommend it if you have children who might have difficulty remembering you if you die when they are young.

As the author states:

The point of all this is to make a difficult thing like dying or loving someone who is dying less difficult. In that sense, creating a When I Die file is an act of love. It will always be too soon to tell your story and let people know how much they mean to you, until it is too late.

If you have any questions about estate planning, email me at julie@juliemillslaw.com.

Has a nursing home asked you to sign?

Your mother, father, aunt, etc., is moving to a nursing home.  You accompany your dad, for example, so he won’t be going through this alone, and he might need help completing paperwork.  The nursing home asks, or requires, that you sign as hi—STOP!  Don’t sign!

The nursing home asks you to sign as your dad’s “personal representative.”  Or to sign as guarantor.  Or to sign anything.  What you are likely doing is signing an agreement to be held financially responsible if your dad, through his insurance or Medicaid, does not or cannot pay his bill.  This might happen if his Medicaid application is not approved, or if insurance denies his claims, or any number of reasons.

But, the nursing home simply wants you to sign as the “responsible relative,” the person who will take steps to see that Medicaid or insurance pays your mother’s nursing home bills, right?  Or as the point person who will track down information, call the insurance company, provide information, right?  You would certainly agree to help your mother this way.  The problem is that you have unwittingly agreed to also be financially responsible to the nursing home for your mother’s bills.  Just ask Judy Andrien.

This practice by nursing homes occurs regularly, at least according to what I see and hear.  It happened to my family member, where the nursing home left his sibling lying out in the hallway on a gurney until the family member signed as “personal representative,” assuring this family member that “oh, it’s just a formality–we never pursue payment.”  They did pursue payment.

It is illegal under the federal “Nursing Home Reform Law” (summarized here) to require or request someone to sign as a guarantor as a condition of someone (usually a family member) being admitted, or of being permitted to continue to stay.  Nursing homes often get “crafty,” however, by asking family to voluntarily sign, whether as personal representatives, the responsible party, guarantor, etc.  “It’s just a formality….”

As an attorney, I have handled matters where stunned family members come to me with 5-figure bills from the nursing home, where the nursing home says that they signed as a financially-responsible party and now the bill is due.  At this point, one of the the only arguments is that my client did not sign voluntarily which can be a difficult argument to make, not to mention costly in attorney fees.

My advice if you accompany someone other than your spouse to a nursing home to be admitted?  Do not sign anything.  Period.

If you have any questions, contact me at julie@juliemillslaw.com.

Elderly parent and assisted living

A friend is facing the prospect of having to consider assisted living for her mother.  “Mother” is friendly, enjoys people her age, and although she loves all five of her grandchildren she does not want to live with them.  She wants to remain at home but, because of dementia, she needs a “memory care” facility.  She finally agreed to other living arrangements after forgetting about a pan of food frying on the stove and nearly burned her house down.

Addressing these issues before there is an immediate need for assisted living is preferable because an elder law attorney can work with you to qualify for Medicaid without losing much of what you own.  To qualify for Medicaid you must have no more than $1,500 in assets.  What you have, after considering exempt assets and other factors, must be “spent down.”  Taking this journey without an attorney is, in this attorney’s opinion, a poor decision.  Many people who decide to apply for Medicaid sell their home, mistakenly believing it will be taken–it is typically an exempt asset.  Unfortunately, then, the proceeds from the sale of the home (an asset that was previously exempt) are then a countable asset which will increase the amount you must spend down.

Takeaway: if a loved one will be entering a nursing home or assisted living facility, and will need to apply for Medicaid, consult with an elder law attorney.  The money you pay for the attorney’s counsel will likely not come close to the money and assets you will protect if applying for Medicaid.