Elder Law: Myths That Hinder Planning

1.     Adults and high school seniors have nothing in common.  Anyone 18 years old and over who does not have advance directives, including a durable power of attorney, may put loved ones in the bind of an unexpected, time-consuming and costly court-appointed guardianship.

2.    There's no rush to get health care or durable powers of attorney because if anything happens to me, everyone knows what I want.  True as that may be, hospitals and treating professionals, not to mention your bank, utility companies and other creditors, are required to deal with you or someone you have appointed legally as your agent.

3.    My spouse can always make decisions for me.  No matter how long you've been married, your spouse is not legally able to make health care or financial decisions for you unless he or she is designated as your agent in a power of attorney.

4.     Once a diagnosis of Alzheimers or another dementia is made, it is too late to ask an elder law attorney about a health care power of attorney or other legal instruments.  A medical diagnosis for example of dementia or early stage memory loss does not mean that a person does not have the legal "capacity" to sign documents.  Even if a person was diagnosed some time ago, he or she may still be able to sign legal documents.  Although there is a day in which it may be too late, the level of capacity depends on the document and the situation.

5.    People can get Living Will and Power of Attorney forms nearly anywhere.  As long as they are notarized, it doesn't make sense to pay for legal advice about standard wording.   If those offering the forms are ultimately accountable for the consequences of one-size-fits-all forms, knowing that people are unique and their interests and needs vary greatly, perhaps they are qualified to counsel in some ways but not on North Carolina laws that may benefit or disadvantage certain choices greatly.  Legal counsel is just that and elder law attorneys need to fully understand all related laws and the client personally before making recommendations  that seriously affect someone's finances and quality of life.  Form powers of attorney lack specific provisions that apply to one's particular situation.  For example, you can dictate how and where you wish to be cared for and allow for preservation of your assets.  A gifting provision tailored to a person's specific situation may allow the home and assets to be protected.  Without such a provision, even a spouse may not be able to protect his or her home and assets if long term care is needed for the other spouse.

6.     If setting up a Trust weren't so easy, so many people wouldn't get them after those helpful seminars that explain why they're so good.  Any time someone has only one thing to sell, especially if there is little to no effort to carefully study ahead of time a potential client's overall situation, expectations and preferences, it may be asking for trouble to buy the single offering without more information about what may be more beneficial alternatives.

7.     Besides, Trusts are the best way to avoid probate.   While certain trusts may avoid probate, it may not be necessary to have a Trust to avoid probate.  The types of assets you have will determine whether some or all of your estate will go through probate.  Certain assets such as life insurance policies, retirement accounts and certain bank accounts may avoid probate.

8.      I can protect my assets from the nursing home by using a Trust.  A Trust, although preferable in some cases, will not protect your assets from the government or nursing homes except in very limited circumstances.

9.    If I have someone's health care power of attorney I can tell doctors and nursing homes how to handle things.   A health care power of attorney is not effective until the doctor makes a written determination that the person lacks sufficient understanding or capacity to make or communicate health care decisions.  If the person regains capacity to make and communicate health care decisions, then the authority of the agent is revoked.

10. It is too risky to sign a power of attorney because someone may use it immediately and I could be in trouble.   A power of attorney can be immediately effective or it may be "springing."  A springing power of attorney does not take effect until a triggering event occurs.  The advantage of having a springing power of attorney is that the powers of the agent are activated only at the time or occurrence set forth in the document, usually at the onset of disability.  The disadvantage is making the determination that the power of attorney is to be activated.  Thus it is vital for the procedure for triggering the durable power of attorney to be clearly laid out in the document itself.

11. A person can't even think about applying for Medicaid, to help with expenses and maybe save the family home for the healthy spouse, unless nearly all the assets are gone.  Despite initial changes and many to come regarding Medicaid eligibility, acceptable legal ways to save a family home and assets should be fully understood before anyone makes irrevocable financial moves that result in worsening a person's quality of life no matter what the health condition may be.  When a single person and especially when one spouse needs long term care, there are many legal options to protect the home and assets.  While there are many misconceptions about Medicaid and Special Assistance, planning may be done in advance of a crisis and when a crisis occurs.

12.It makes a lot of sense to give everything to the children early so I/we will be ready for Medicaid eligibility before seeing an attorney.   This almost always results in lengthy, unnecessary periods of ineligibility when Medicaid or other public assistance is applied for and the tax consequences can be devastating.   Usually there are alternatives that may make sense for you.

13. I have a generous retirement income, but I'd like to give it all to my children and as little as possible to the government.  No doubt there's a way to hide assets and not worry about some expensive plan to take care of myself.  There is no way to "hide assets;" however, there are legal ways to protect your assets.  Long term care insurance, gifting to grandchildren for future education and other options may make sense for you.  You should consult with a financial advisor and an elder law attorney.