PLANNING FOR PLANNING FOR

INCAPACITYINCAPACITY

A presentation byA presentation by

Claire E. LewisClaire E. Lewis

GUARDIANSHIP

Guardianship: provides protection when it’s

too late to execute legal documents.

A guardian is someone appointed by a court

to make decisions for an incapacitated

person.

ESTATE PLANNING

DOCUMENTS

• 1. Power of Attorney

• 2. Health Care Power of Attorney

• 3. Appointment of Health Care

Representative

• 4. Living Will

• 5. Last Will & Testament/Trust

Who should have a POA

• Over 18

• Single

• Married

• Disabled

• In other words, just about everyone!

Persons named

• a single AIF with successors

• multiple independent AIFs

• multiple joint AIFs

Effective dates

• Immediate

• Springing

Durable

Power of Attorney

ALL POAS IN INDIANA ARE DURABLE:

THEY SURVIVE YOUR INCAPACITY – UNLESS YOU STATE OTHERWISE IN THE DOCUMENT.

General Business

� real property transactions;

� use of limited POAs

� banking transactions;

� business operating transactions;

� insurance transactions;

� gift transactions

� Beware the statutory limitation

� health care

� Preferably should be done in separate power of attorney

� all other matters

Health Care Powers of Attorney

� If the attorney in fact is an individual, POA

must include statutory language to

consent to or refuse health care

■ Other Powers

Medical Directives

� Living Will

� Health Care Representative

� Health Care Power of Attorney

� Out-of-Hospital DNR

Health Care Representative’s Powers

� Provide care

� Withhold care

� Withdraw care

� Access medical records

Living Will

• I.C. 16-36-4 et. seq.

– Terminal condition certified by physician

– Life prolonging procedure

• Artificial means

• Prolong dying process

– Rarely triggered

– Provides psychological comfort

WILLS

• Everyone should have a will

• Principal components

– Tax clause

– Specific bequests

– Residuary bequests

– Personal representative

PAYING FOR LONGPAYING FOR LONG--TERM CARETERM CARE

�� MedicareMedicare

�� Nursing Home InsuranceNursing Home Insurance

�� Private PaymentsPrivate Payments

�� MedicaidMedicaid

MEDICAREMEDICARE

�� Three Days Hospital StayThree Days Hospital Stay

�� Skilled Nursing CareSkilled Nursing Care

�� 20 Days Coverage20 Days Coverage

�� 80 Days Co80 Days Co--PaymentPayment

�� No Financial RequirementsNo Financial Requirements

Even an

Einstein has

difficulty

with the

Medicaid

system

www.aishamusic.wordpress.com

MEDICAIDMEDICAID——Single PersonSingle Person

�� Countable Resources Less Than $1,500 Countable Resources Less Than $1,500

First of MonthFirst of Month

�� Income Goes to Pay for Care except forIncome Goes to Pay for Care except for

-- $52 Personal Needs Allowance$52 Personal Needs Allowance

-- Cost of Supplemental InsuranceCost of Supplemental Insurance

-- Medicare Part D premiumMedicare Part D premium

MEDICAIDMEDICAID——Married CouplesMarried Couples

�� No More Divorce or BankruptcyNo More Divorce or Bankruptcy

�� MCCAMCCA

�� SnapshotSnapshot

�� Different Rules for Assets/IncomeDifferent Rules for Assets/Income

ASSETSASSETS

Exempt:Exempt: HomeHome

AutomobileAutomobile

Prepaid Funeral ArrangementsPrepaid Funeral Arrangements

IncomeIncome--Producing Real EstateProducing Real Estate

Countable:Countable: Bank AccountsBank Accounts

Retirement AccountsRetirement Accounts

Jointly Owned NonJointly Owned Non--Residential, NonResidential, Non--

IncomeIncome--Producing PropertyProducing Property

ASSETS THAT DO NOT COUNTASSETS THAT DO NOT COUNT

�� Proper Funeral Arrangements or Small Insurance Proper Funeral Arrangements or Small Insurance Policies for FuneralsPolicies for Funerals

�� IncomeIncome--Producing PropertyProducing Property

�� Vehicle Used for Medical Care or Employment or Vehicle Used for Medical Care or Employment or vehicle modified for use by a handicapped vehicle modified for use by a handicapped personperson

�� Home if Certain Persons Live or intend to live in Home if Certain Persons Live or intend to live in HomeHome

Deficit Reduction Act (DRA)

Signed February 8, 2006

WAITING FOR PREY

Penalty for “Any Transfer”

• Charitable gifts?

• Gifts to church?

• Gifts for Christmas?

NEW TRANSFER PENALTIES

• 5-Year look back period

• Penalty runs from

– Date of Institutionalization

– Otherwise Medicaid eligible