The term “estate plan” usually invokes thoughts of death and money. Most often people seek out an estate planning attorney to draft complex instructions for how their money will be handled after death. Clients spend hours thinking about how much money will go to their children and to charity. They consider who should receive specific items of personal property like a wedding ring, expensive china, and antique furniture. They spend hours creating a trust with very specific instructions on how the trust assets can be distributed. Some even go as far as dictating how future generations, still unborn, may use their hard-earned money.
These things are important and should absolutely be considered. However, estate planning attorneys should also encourage their clients to focus on an arguably more important aspect of their estate plan: the critical period we call between now and dead.
The Critical Time Period
An estate plan should be used to plan for the day when the client is alive but no longer able to direct their own health care or manage their own finances. Age is the primary factor for developing dementia.  As people live longer, it is more likely that they will also suffer from dementia, which is one of the leading causes for incapacity in older adults in the world.  Dementia is the seventh leading cause of death of all diseases.  This means that many adults will become incapacitated before they die.
This is the reason why we argue that this period of time – the time between now and dead – is the most important and should be planned for with as much detail, or even more detail, than the post-death period.
The instruments needed to address this critical time period are health care and financial power of attorney documents. These documents allow someone else, called an agent, to manage health care and financial decisions for another person. Think of all the things you do for yourself on a daily basis: pay bills, pay your car registration, file taxes, attend doctor appointments, manage medications, decide where you will live, run errands, etc. At some point in your life, you may rely on others to do these basic tasks for you. Who do you want doing that?
Most people name family members or close friends without really thinking through the decision. Imagine a friend knocking on your door one day and asking you to take over every single decision for them, starting immediately. How would you respond? Do you have the time? The resources? The desire to do that for someone else?
Yet, this is what many people do. They name their children, relatives, or friends without speaking to that person. Without considering what a burden it may be. Without carefully thinking through whether that person not only has the necessary skill set to perform the required tasks, but also the desire to do so.
Choosing the Right Agents
Estate planning attorneys should work with their clients to thoughtfully consider who they name as their agent in their documents. The individual or individuals named must be proficient at a large number of different tasks. Here are some things to consider for naming any agent:
- What skills does this person have?
- Does the individual have sufficient time to do this for you?
- How old is this person? Is he or she your same age? Older? Much younger?
- How does this person react in a stressful situation?
- Does the person live nearby or out-of-state?
A financial power of attorney must be able to pay day-to-day bills, decide how to invest large assets, maintain real estate, secure personal property, decide to how withdraw funds from retirement accounts, pay taxes, etc. Some of these things can be done by the agent themselves. In other instances, such as investing assets or preparing a tax return, the agent might have to hire other professionals.
Here are some questions to consider:
- Is this person skilled at managing their own financial picture?
- Does the person stay up-to-date on his or her own bills?
- Does the person have experience managing an estate of your size and complexity?
A health care power of attorney needs to have an entirely different set of skills. The health status of an individual can change and vary greatly as he or she declines in health. There is no one-size-fits-all approach to deciding the best path for an individual as he or she ages. For example, when a client prepares his or her estate plan he or she might be in good overall health. But, that can change with a diagnosis of Parkinson’s, dementia, or other progressive disease. This means the agent must be adept at determining what level of care the individual needs: independent living with some assistance, assisted living, nursing home level of care, or can the person continue to live at home? Who are the best doctors to care for and treat this person? There could be multiple medications to manage. All the while ensuring the individual is receiving the best care to ensure a high quality of life.
A health care agent must be able to navigate an increasingly complex health care system and must have knowledge – or be able to gain knowledge – on a variety of topics very quickly. There are a variety of options for care, for example, and not many professionals to help guide you to the one that will best fit the needs of the individual. How do you tell a bad nursing home from a good one? It’s a complex question with no easy answer.
Here are some things to consider when naming a health care power of attorney:
- Can this person take in complex information and understand it?
- Can this person speak up and advocate for themselves or others when needed?
- Can they research complex issues and come to a final decision?
- Can this person stop what they are doing to immediately and adequately address urgent health care needs as they arise?
Finally, clients need to consider whether he or she names one person to fulfill these roles or multiple people. There are pros and cons to each side. Naming one person ensures consistency, and that person doesn’t have to work with another person to make decisions (which can cause gridlock or tension). Naming one person as power of attorney and a different person as health care power of attorney ensures that one person is not taking on too much, which can cause burnout.
Clients often first look to their children, close family members or friends simply because of their relationship and fail to consider the above questions. Savvy estate planning attorneys should be asking more in-depth questions to ensure their clients are naming the best possible agents.
Conversations to Have
After a client decides who to name in his or her documents, the client should then think about other important decisions that he or she wants the agent to make on his or her behalf.
For example, clients should think about how they want their money spent: what quality of life do they desire? Do they want to save as much as possible for an inheritance? Do the clients want to live at home and only go to a nursing home as a last resort? Individuals should also have conversations about end of life including receiving artificial nutrition and hydration and other life-prolonging measures. Do they prefer to live in a nursing home or do they want to stay home as much as possible? Do they want the most aggressive care possible? Or do they prefer comfort care?
The estate planning attorney should help their clients think through these questions and then decide how the answers should be incorporated into the estate plan.
The Professional Option
Some clients may get through this exercise and decide that their friends and family are not suitable to serve or they simply don’t want to burden these individuals. Thankfully, clients now have a professional to consider.
Scout Advocacy is experienced at serving as health care and financial power of attorney. On the health care side, our team of advocates are nurses and are especially adept at tackling all aspects of a person’s health care, no matter how complex. Our nurses have intimate knowledge of the quality of care at most facilities in and around Indianapolis. We also know the ins and outs of Medicare and Medicaid benefits.
On the financial side, our team is led by two attorneys who have experience in managing assets on behalf of others. We provide transparent, wholistic financial management so families know their loved ones money is being well-managed.
If you are thinking about completing your estate plan, give due consideration to that time period in your life when you are alive but might be unable to make decisions for yourself.
If you are an estate planning attorney, build time into your consultation to encourage clients to think through who they name as their agents while ensuring those named are capable of carrying out those duties.
If you have questions about our services or would like a member of Scout’s team to attend a meeting with you or a client, please contact Jane Malkoff at 317-979-3700.