Estate Planning
Wills and Powers of Attorney
Executing your Last Will and Testament, Durable Financial Power of Attorney, Health Care Power of Attorney, and Living Will is an important step to take for adults of ALL ages and wallet size. Keystone likes to refer to the estate planning documents as foundational documents. In addition, Keystone can help you with inheritance tax and estate tax planning, special needs planning, retirement planning, trusts and any other estate planning matters. Life sometimes presents the unexpected, and circumstances can change in a matter of seconds. While completion of these documents leads us to think about situations that usually aren’t pleasant, we can have peace of mind that should an event occur that impairs our ability to function independently, we still have some control over decision-making because our wishes have been clearly written down.
The most common document that people think about is a Last Will and Testament. This document dictates what will happen to your property after you pass away. It allows you to choose “who gets what” (your beneficiaries), who will be in charge of overseeing the process (your executor), and who you wish to be guardian of any minor children or dependents. If you pass away without a will, the state will make these decisions for you, and the state’s decisions may be different from what you would expect. For example, if you pass away and have surviving children, all of whom are children of your surviving spouse also, your surviving spouse will receive only the first $30,000 plus one-half of the balance of the intestate estate. If you prefer to make your own decisions, clearly a Last Will and Testament is an important document.
Equally important is a Durable Financial Power of Attorney. This document is necessary if you should require assistance with financial matters, such as paying bills or accessing/managing an independently owned bank account. Without this document, financial institutions will release information only to the owner of the account. This creates difficulties if the owner is incapacitated, either temporarily or permanently. Using this document, you can name one or more individuals to act as your “Agent” for the purpose of legal and financial matters. A Durable Financial Power of Attorney becomes effective either immediately, upon incapacity (if it is “springing”), or for a specific limited purpose, and can only be used while you are alive. Keystone can help you create a Durable Financial Power of Attorney that will have specific language necessary for protecting assets during a nursing home crisis. The only other way to access financial information and manage accounts would be through a GUARDIANSHIP, which is a legal process involving the court that is lengthy, stressful, and expensive.
A Durable Health Care Power of Attorney allows you to appoint one or more individuals as your “Agents” to make health care decisions for you if you are unable to make them for yourself. These decisions can include authorization or refusal of medical treatment, admissions to medical facilities, and hiring/firing of medical professionals. Another essential element of this document is that it allows your agent to access your private medical information so informed medical decisions can be made. This information is more difficult to access since the enactment of Health Insurance Portability and Accountability Act (“HIPAA”), which tightened medical privacy regulations. Your agent(s) should understand your preferences for care so that they can best represent you if the need should arise.
The final document is a Living Will. A Living Will applies ONLY to end of life health care decisions. It applies in two specific situations: if you have an end-stage terminal medical condition or if you are in a permanent state of unconsciousness. In Pennsylvania, a physician must certify that you are in one of these conditions for your Living Will to go into effect. Decisions in this document about receiving or declining aggressive treatment are very personal and there are no right or wrong decisions. Designation of a “Surrogate” gives medical professionals an individual to consult with who can clarify your preferences. Finally, your Living Will allows you to specify any anatomical (organ) donation you would like to make after you are deceased.
These documents are a good place to start if you are beginning to plan for your future. If you have completed these documents in the past, we recommend that you periodically review them as changes in state law and your life situation may indicate that an update would be wise. Documents that may have been appropriate for you as a newlywed may not be appropriate anymore now that you are on the brink of retirement.
For additional information or questions, give us a call at 717-697-3223.
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REGISTER HERE for LONG-TERM CARE PLANNINGPower of Attorney
A Power of Attorney can be used to give another person the right to sell a car, home, or other property in the place of the maker of the Power of Attorney. A Power of Attorney might be used to allow another person to sign a contract for the maker of the Power of Attorney (the person who makes a power of attorney is called the “principal”). It can be used to give another person the authority to make health care decisions, do financial transactions, or sign legal documents that the principal cannot do for one reason or another. With few exceptions, Powers of Attorney can give others the right to do any legal acts that the makers of the Powers of Attorney could do them themselves. A General Power of Attorney gives the “power of attorney Agent” or simply “Agent” (the legal name of the person who is authorized to act for the principal) very broad powers to do almost every legal act that the principal can do. When Elder Law Attorneys draft general Powers of Attorney, they still list the types of things the Agent can do but these powers are very broad. People often do general Powers of Attorney to plan ahead for the day when they may not be able to take care of things themselves. By doing the General Power of Attorney, they designate someone who can do these things for them.
Normal Powers of Attorney terminate if and when the principal becomes incompetent. Yet many people do Powers of Attorney for the sole purpose of designating someone else to act for them if they cannot act for themselves. It is precisely when persons can no longer do for themselves that a Power of Attorney is most valuable. To remedy this inconsistency, the law created a Durable Power of Attorney that remains effective even if a person becomes incompetent. The only thing that distinguishes a Durable Power of Attorney from a regular Power of Attorney is special wording that states that the power survives the principal’s incapacity. Even a Durable Power of Attorney, however, may be terminated under certain circumstances if court proceedings are filed. Most Powers of Attorney done today are durable.
Yes. At the time the Power of Attorney is signed, the principal must be capable of understanding the document. Although a Power of Attorney is still valid if and when a person becomes incompetent, the principal must understand what he or she is signing at the moment of execution. That means a person can be suffering from dementia or Alzheimer’s Disease or be otherwise incompetent sometimes but as long as they have a lucid moment and are competent at the moment they sign the Power of Attorney, it is valid even if they do not remember signing it at a later date. At the time it is signed, the principal must know what the Power of Attorney does, whom they are giving the Power of Attorney to, and what property may be affected by the Power of Attorney.
Any competent person eighteen years of age and older can serve as an agent. Certain financial institutions can also serve. There is no course of education that agent must complete or any test that Agent must pass. Because a Power of Attorney is such a potentially powerful document, agents should be chosen for reliability and trustworthiness. In the wrong hands, a Power of Attorney can be a license to steal. It can be a big responsibility to serve as an agent.
For Medicaid
Medicare is health insurance and covers medical services such as physician appointments, therapy, blood tests, x rays, medical procedures and hospitalization. Medicare will sometime pay for rehabilitation in a long-term care facility for a period of 20 to 100 days, but not longer. In long-term care, Medicaid covers the cost of ongoing support services for daily functioning, such as room and board in a nursing home.
Medicaid is a federal program that is overseen by the Center for Medicare and Medicaid Services (CMS). In Pennsylvania, Medicaid is called Medical Assistance and is administered by the Department of Human Services (DHS).
In Pennsylvania, Medicaid funds are not available to pay for assisted living or personal care.
For Medicaid to pay for care in a nursing home, an individual recipient must be determined to need a nursing home level of care by a physician and the local Office of Aging. An individual whose income is not greater than three times the poverty level may keep up to $8,000 of total resources, but may otherwise keep only $2,400. The cash value of life insurance counts as a resource, but one car and a residential home does not count as a resource.
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Empowering Clients with Holistic Planning at
Keystone Elder Law
At Keystone Elder Law, we believe that the physical, social, legal, and financial considerations of our clients all intertwine. We utilize an interdisciplinary approach to evaluate each area, which allows for the creation of a plan that addresses the concerns of the individual as a whole as well as the family. To this end, our model of practice includes a Care Coordinator (usually a nurse or social worker), whose expertise complements our team of attorneys.
When the road of life is smooth, decisions about legal and financial matters are easy to push aside for “a rainy day.” Planning ahead, however, will allow for more options as you view the map of where you’ve been and where you want to go. Don’t let a crisis limit your choices or derail your plans.
(717) 697-3223