Estate Planning for the Possibility of Future IncapacityEstate Planning for the Possibility of Future Incapacity

In the last two blog entries we discussed the importance of planning for the possibility of future incapacity. While some people may think this is a topic that impacts only the elderly, incapacity can strike anyone at any time, due to an accident, injury, or illness. In this month’s blog entry we will discuss how the use of a living trust and a durable financial power of attorney provide protection and a plan in the event of incapacity.

Revocable Living Trusts
A living trust is a document which you create during your lifetime which allows you to specify who will manage the assets of the trust (the “successor trustee”) and who will receive the assets of the trust (the “beneficiaries”) after your death. During your lifetime, you are typically both the trustee and the beneficiary of the trust, ensuring that you still have complete use and control over your assets. As the name implies, you can revoke the trust or make changes to the provisions of the trust during your lifetime. In the event you become incapacitated, your successor trustee will manage the trust assets on your behalf, often avoiding the necessity for a conservatorship proceeding, which we discussed in our July blog entry.

Durable Powers of Attorney for Financial Matters
A durable power of attorney for financial matters is a document in which you specify who will make financial decisions on your behalf in the event you become incapacitated (your “agent”). This document may be immediately effective upon execution, or it may be springing, meaning it becomes effective only upon your incapacity. The document is “durable” in nature in that it is not affected by your subsequent incapacity-the powers given to your agent will continue despite your loss of capacity. Even if all of your assets are held in your living trust, and are therefore under the management of your successor trustee if you become incapacitated, you will need a durable power of attorney for financial matters to give your agent the authority to sign your tax returns, deal with your insurance company, and handle other financial matters on your behalf.

Estate Planning Issues Require Experienced Legal Representation
Comprehensive estate planning includes careful consideration of various contingencies, such as the possibility of future incapacity. If you need assistance with estate planning, contact the Casiano Law Firm for a complimentary telephone consultation with an experienced San Diego elder law and estate planning attorney.

Advance Health Care Directives

An Advance Health Care Directive (AHCD) is a document that allows you to specify your health care preferences and appoint someone to carry out your wishes for you in the event you are incapacitated or otherwise unable to communicate. An AHCD allows you to inform your doctor, family and friends of your preferences regarding your medical care and treatment, including end-of-life decisions. By specifying your wishes in advance, you ensure the quality of life that is important to you and spare your loved ones from having to guess what your preferences would be, or force them to make difficult decisions at a time when they are emotionally distraught. If at some point you become incapacitated, a valid AHCD can eliminate the need for a conservator to be appointed to make decisions regarding your care and medical treatment.

California law requires certain provisions to be included in your AHCD and certain formalities to be followed in the execution of an AHCD, but there is no one single form required for a valid AHCD. An AHCD should designate a person to carry out your wishes (this person is referred to as your "agent") and may include provisions:

• Regarding life support or other life-prolonging measures
  
• Authorizing an autopsy
  
• Directing disposition of remains
  
• Nominating a conservator
  
• Naming a primary physician
  
• Specifying your wishes regarding organ donation
  

AHCD Replaces Earlier Forms of Health Care Directives
Effective July 1, 2000, California consolidated various earlier forms used to designate health care preferences into the AHCD; earlier forms of health care directives included the Durable Power of Attorney for Health Care, Natural Death Act Declaration, and the Directive to Physicians. The AHCD is sometimes referred to as a "Living Will" in other states.

If you have a valid Durable Power of Attorney for Health Care or other valid health care directive executed prior to July 1, 2000, the document can remain in effect. However, you may want to update your health care directive to specifically refer to the Health Insurance Portability and Accountability Act (HIPAA), which regulates the use and disclosure of certain protected health information by doctors, hospitals, and other health care providers. Some medical providers have misinterpreted the privacy rules of HIPAA and have withheld the release of patient information from the patient's family. Although the California Probate Code does not require the AHCD to specifically refer to HIPAA, many estate planning practitioners include a provision releasing the medical provider from liability under HIPAA for disclosure of protected information to the patient's health care agent and/or family.

Estate Planning Issues Require Experienced Legal Representation
If you need assistance with estate planning, contact the Casiano Law Firm for a complimentary telephone consultation with an experienced San Diego elder law and estate planning attorney.