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Planning Ahead: Estate Planning

  • Estate planning is not about a will and it is more about planning for life then planning for death.
  • To assure that you and your loved ones obtain the planning you need and want you must first discard the widely held misconceptions about what estate planning is. Estate planning is not primarily planning for death. If you might have another decade, or even decades of life, proper estate planning will protect you for those many years. That is planning for life, your life. If you have a spouse, partner, children or others you care about, as  your disease progresses you want to make sure that they are provided for and cared for if necessary. That is planning for their lives. Yes, estate planning to assure the proper disposition of your asset on your death is important, but if you refocus on planning for life you'll be more likely to pursue estate planning and obtain better results.
  • Estate planning is not only about a will. When you shift the focus to planning for life, a durable power of attorney, health proxy and living trust (these will all be explained below) are more important than just a will. For many people, the disposition of their assets is primary addressed by documents other than their will (e.g., house distributed based on the manner in which names are indicated on the deed, life insurance and IRAs by beneficiary designation, etc.). So even when you focus on the part of estate planning that relates to disposition of assets on death, you cannot safely confine yourself to just a will.

The above distinctions are especially important for PWP. How you distribute your asset on death is no different than how anyone else does. You can buy a program, book or hire an attorney to draft a will that has no special knowledge of PD and do just fine. However, the component of estate planning that focuses on planning for life can be very different than what a person your age without PD might do. If you don't differentiate the two components of planning you will not focus the special attention you need on the estate planning for life component that is in fact special for People with Parkinson's. Example: You were diagnosed with YOPD. You should consider having an attorney prepare a revocable trust to which you transfer most of your assets (pensions accounts, professional practices, and certain other assets cannot be so transferred). A revocable trust funded with assets that names you and perhaps a family member or trust company as trustees might be the most powerful tool to protect you as your PD progresses. Few lawyers would recommend this step for someone your age that has no significant health challenges.

  • An important outcome of financial planning can be directing the distribution of your assets in the event of your incapacity, and after your death.
    Tip: "Incapacity" is a term that is too often viewed by legal and financial professionals as a light switch – you are or you aren't. The reality is that disabilities can come in an infinite shades of gray and you can have rather substantial disabilities yet still remain in control (with proper planning) of your life decisions, finances and legal affairs. Often planning for disability is too rough and more fine-tuned planning is really necessary. Tip: Understand the potential progression of PD and what consequences it might have. Be certain that your planning and legal documents conform to those challenges. Example: Most powers of attorney ignore compensation. Should your agent be compensated for handling your financial and legal matters?  Often it is ignored because the concept most people have in mind is someone helping out by writing checks during a short term disability. In fact, as your disease progresses your agent may have increasing responsibilities that spans a decade or more. Should compensation be provided in such a case? Perhaps more likely that it should. If you name a child as an agent and have several children will paying one compensation and not the other create animosity? All of these business as well as personal factors need to be addressed in your planning.
  • While contemplating your own mortality can be uncomfortable, doing so can be useful to the preparation of the estate planning documents that will accomplish your goals. But remember this is only one component of planning. Focus on planning for life and the process will be less daunting.

Depending upon your family needs and financial situation, your estate planning document could consist of one or more of the following:

  • Durable power of attorney (DPA) for financial matters: This document authorizes your designated attorney-in-fact, or agent, to handle your financial affairs during incapacity as well as tax and legal matters. This is one of the most important documents any person with Parkinson's must have. The term "durable" means it remains valid even if you become disabled. See the discussion of revocable trusts below. The most powerful and safe arrangement is for you to use a fully funded revocable trust and a durable power of attorney. Durable powers of attorney for People with Parkinson's should also take into account the characteristics of PD. The decision whether or not to use a springing power of attorney warrants special consideration. The problems of triggering a springing power are common to all people. If you insist on a springing power the power may only have to be triggered once, when the level of incapacity reaches a point where an agent has to permanently take over. Thus, a springing power is feasible to use. As explained above, it may be advantageous for the PWP to occasionally use a special immediate power to facilitate execution of documents for particular transactions even though the PWP is competent and the broad general durable power has not "sprung".
  • A will, or "last will and testament." This is a document which distributes your probate assets on your death. It does not affect the distribution of pension and IRA assets, or life insurance policies, which generally pass based on beneficiary designation forms you complete with the company managing the retirement plan or IRA or the insurance company issuing a policy. Tip: Prepare a balance sheet listing all of your assets and liabilities and indicate what document will control how those asset will be distributed. You might be quite surprised to find that very little is governed by your will.
  • Most people ask for a "simple will," thinking that will be easier and cheaper. The word "simple" is relative. A short will might appear simpler than a long one but may prove more complex and costly to administer. A short will might give your executor (personal administrator, the person charged with managing your estate) "all powers permitted an executor under state law." That sounds simple and doesn't require many pages or complexity. Another will (the kind you should prefer) might have 15 pages of detailed powers and rights you expressly grant your executor. That might seem complicated. However, if an executor needs to take a particular action and can look up in those 15 pages and find the power they need, then both the executor and any third parties involved (e.g., a bank) will know that the executor can take the intended action. However, if that same situation arises and the executor has the short purported simple will, he or she will have to hire and pay a lawyer to research what powers the executor has. That will be costly and create time delays. This same concept applies to all your legal documents. And since all wills are drafted by computer or completed using computerized document generation systems adding appropriate powers and other standard provisions (often called "boilerplate") won't cost much more if anything, but may give you and your loved ones much better results.
  • A will with built-in trust provisions for loved ones that become effective at death. Trusts are quite misunderstood but a detailed discussion is beyond the scope of this book. Briefly, a trust is a contractual arrangement between a "trustee" (the person who manages the trust asset) and you (the "testator" if you set it up under your will, or the "grantor" if you set it up while you are alive). The trustee manages the trust assets for a person called a "beneficiary." It is the separation of legal ownership in the trustee and the beneficiary ownership in the beneficiary that creates the valuable benefits trusts can provide. Trusts in the simplest sense are used to protect a minor child who may not be mature or responsible enough to handle large sums of inherited money. However, with a 50% divorce, complex tax system, and aggressive litigation system, using trusts can provide many benefits. In the context of planning for PD or any other chronic illness, having assets held in a properly crafted trust can be an incredible benefit as a trustee other than the person with a health challenge can help manage trust assets for the person with a health challenge.
  • A revocable living trust that controls your finances from the time you fund it through incapacity and death. This is the most powerful tool for managing your assets as your PD progresses, and if affordable and attainable should be considered. The benefits of a revocable trust is that you can be the initial trustee and name successor trustees to manage your asset for you and y0ur loved ones if your PD progresses to a degree where you cannot do so. Because a trustee has legal title to the trust assets this can be a safer and clearer arrangement, with less impediments and problems, than relying only on an agent under your durable power of attorney to manage assets (see explanation below). Tip: Most revocable trusts are sold to people based on fears of the probate process. Whether or not such a use is beneficiary is quite secondary to a People with Parkinson's decision to use this mechanism to protect and manage assets as PD progresses. So be careful about what you read about revocable trusts as much of the material you will find will not address its real value to you. Consider including a provision in your trust mandating that an independent trustee hire an independent social worker to meet and assess your situation twice a year. This can be a great safeguard to minimize the risk of abuse or neglect that some with advanced PD might face.

One type of trust that may be useful for PWP's is often referred to as a Medicaid, or pay-back trust. If properly structured, such a trust may be able to protect assets so they may be passed along to family members or others of your choice, while keeping you eligible for expensive care, such as at a nursing home.
Tip: Medicaid rules are ever changing and differ rather considerably from state to state. If you believe that such planning might be useful consult an attorney in your state that specializes in Medicaid planning. Be especially careful about following any generic internet advice or guidance from friends as it may be more damaging than doing nothing. See National Academy of Elder Law Attorneys at www.naela.org.

Planning with documents known as advance directives can help ensure that your wishes with regard to your physical and financial care during incapacity are followed, and that your resources are used appropriately.

Types of advance directives are:

  • Durable power of attorney for health care matters or a Medical Power or Health Care Proxy: Authorizes your designated attorney-in-fact, or agent, to make healthcare and life-extending or life-ending treatment decisions as you would were you able, and states the directives you want that person to follow.
    Tip: If you or your agents have any religious beliefs that might affect medical decision making, be certain to address them in your documents. 
    Tip: Given the progressive nature of PD, a guardianship designation should be included in the health care proxy (or a separate guardian designation prepared). Some state laws expressly permit this. But, at minimum such a designation provides clear evidence of who the client would want to serve in such capacity if a later court proceeding were necessary to confirm a guardian. If a revocable living trust, durable power, and health proxy are all completed, it may lessen the need for you to ever have to address the issue of a guardianship.
  • Living will: This document "speaks" for you with regard to your wishes for life-prolonging care when death is imminent as a result of terminal illness or injury. Please note that the living will is valid in most but not all states. Regardless it is always helpful to have a living will that addresses and confirms your wishes. Be certain to address religious beliefs, your desire to have experimental medical treatments, wishes to donate organs for transplant or in particular to foster PD research, etc. You might wish to include an express provision concerning donating brain tissue samples for PD research efforts. The language should be specific enough to assure that the donations will be used for PD research.
    Tip: Many of these issues are not dealt with in most standard forms and you will want to tailor standard documents to address your particular concerns and wishes as a PWP.
  • Failure to sign advance directives that comply with your state's laws prior to incapacity can have adverse consequences. Without a DPA for financial matters you may be subject to a costly, court-ordered guardianship or conservatorship. Without a DPA for healthcare, or a living will, your loved ones and physicians will be left guessing about your desires for life-sustaining treatments and you might need a court proceeding for a guardianship of your person (as distinguished from the guardianship proceeding for your property as noted above).
  • Your DPA for health care can be, and often is, someone other than your DPA for financial matters. The documents address very different matters and that often calls for different skills and temperaments.
    Tip: Never name someone you feel obligated to name, e.g., your oldest child. Instead name the person and successors to that person that you feel will perform these vital tasks as best as possible and as consistently as possible with your wishes.

Some of the legal issues noted in this section come under an area of law called Elder Care. View a presentation by Janna Dutton, J.D., about these and other Elder Care law issues relevant to PD from NPF's 2007 Young Onset Parkinson Network Conference. Most, however, would better be categorized as estate planning. Elder law tends to focus on planning for nursing home costs, Medicaid and Medicare, and other governmental programs. Estate planning addresses wills, revocable trusts, powers of attorney, health proxies and related estate planning as well as tax and other planning that might be important to you. This is important to understand so that if you are looking to protect assets from nursing home costs you want an elder law specialist, not an estate planner. If you are seeking to address the general range of document either specialty may be appropriate. If you are seeking to address estate tax planning an estate planner may be preferable. Often the terminology is opaque at best so you should always describe your circumstances to the professional you wish to retain to be certain they are properly equipped to help you.

Meetings

When you hire an attorney to assist you with these documents, be upfront about PD challenges you may face so that you can assure the process will work optimally for you. Coordinate meetings for the times of day when you will likely be best able to fully participate. Ask your advisers for extra scheduling flexibility. Begin planning immediately and review your overall plan with your advisers at least annually. That way, you create a history of your wishes. You can then fine tune your documents and planning as your feelings and perspectives change. You'll avoid the tragic struggle too many face endeavoring to sign a will or make other significant decisions after their disease has progressed substantially. Your estate planning attorney might need to take additional precautions to document your competency to execute legal documents as your disease progresses, including a letter from your attending neurologist about the cognitive impact of PD onto you, your medications you are taking, etc. Request or prepare an agenda in advance of any meeting. Have someone accompany you to meetings to assist by taking notes for you. Prepare an action list of specific steps after each meeting. Break planning into phases. Example: Phase I – powers of attorney, living wills, HIPAA release, and health proxy. Phase II – will and revocable living trust. Phase III – more advanced planning.

Handwriting Issues

Micrographia, when your writing gets smaller and smaller, is a common symptom of PD. Have your lawyer prepare several formal witnessed and notarized affidavits which you sign at different points during the day to document the changes in your signature. This can be helpful when trying to convince a bank teller, for example, that your signature is real even though it differs from the signature card on file.

Content for this section provided by Allsup, Inc. and Mark Rubin, J.D. and Martin M. Shenkman, CPA, MBA, PFS, AEP, JD.

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