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 Hingham
- I debated long and hard about this month’s topic because I
try to provide new information or stories that will inspire
you in some way. I was feeling compelled to once again urge
folks to update their basic estate planning documents and
take steps to protect their hard-earned assets, as I have
seen a significant increase in crisis cases over the past
few months.
One panicked daughter could not find out if her mother had
been admitted to a psychiatric hospital as she suspected
because mom’s Health Care Proxy did not have HIPAA (the
health privacy law) release language in it. The hospital
would not speak with the daughter even though she was the
named Health Care Agent because the Health Care Proxy is
only effective when the principal is deemed incompetent by a
doctor.
Another crisis call came from Julie, whose sister Anne had
petitioned the court to be appointed guardian of their
mother. Anne had been estranged from the family for years
and is likely just trying to get control of mom’s assets. If
mom had executed a comprehensive Durable Power of Attorney (DPOA)
that appointed Julie (her primary caretaker) as her agent
and nominated her to serve as guardian if protective
proceedings were ever necessary, Julie would be in a better
position to challenge her sister’s Petition and could
potentially avoid spending thousands of dollars in
protracted litigation. Such situations could be avoided if
basic estate planning documents were updated in these and so
many other cases.
Then I received a call from Margaret to schedule an
appointment for her mom (Betty), as her dad (Joe) was
hospitalized and would need nursing home care when
discharged. After my meeting with Margaret and Betty, I knew
I had to focus on this topic once again. You see, this
family represents the typical readers and, in fact, the
typical clients. Margaret has two siblings and all of the
children have been urging Betty to see an attorney. They had
actually cut my ad out of the South Shore Senior News from a
year ago for mom, who carried it in a folder with some other
important information. Whether Betty was in denial of her
husband’s decline, too overwhelmed to deal with the issues,
or just resigned that it was too late to do any thing to
protect the estate, she didn’t make the call. Margaret and
her siblings did not want to overstep their boundaries and
respected Mom’s independence.
So, there we were, faced with crisis planning to ensure that
Joe receives quality care while preserving as much of the
estate as possible for Betty’s security. There are more
options available with advance planning, for sure, but we
could still protect most of the estate with crisis
strategies. Joe and Betty own four pieces of real estate and
have other assets valued at approximately $519,000. Joe may
not have more than $2,000 in his name and Betty is only
allowed to retain about $109,000. The primary residence is
non-countable by MassHealth in this case. Therefore, our
plan needed to address the three additional properties and
other “excess assets” of about $410,000. We could protect
two of the properties by utilizing exemptions in the
MassHealth regulations to convey them out of Joe and Betty’s
names.
One property would need to be sold, and we could take all of
the excess assets (including the proceeds of the sale of the
fourth property) and purchase an annuity that will pay a
significant monthly income to Betty. By converting the
countable excess assets to an income stream for the
community spouse, we could protect the estate. Not bad for a
crisis plan, right? Not so fast … while we were able to
develop a fantastic plan to protect nearly the entire
estate, we can’t implement it!! Not yet at least.
In order to implement this fantastic plan, we need Joe to
sign the Deeds to convey all of the properties out of his
name and to transfer all other assets to Betty. If Joe had
executed a comprehensive Durable Power of Attorney that
provided Betty with the authority to sign such documents on
Joe’s behalf, we could implement the plan using the DPOA.
But he didn’t. As I tried to explain the problem to Betty
and Margaret, Betty reassuringly said, “But he can still
sign his name…”
I wish it was that easy, but it is not. Due to Joe’s
dementia, he would not understand what he was signing and I
could not, therefore, notarize his signature on the Deeds.
While this plan could have been implemented within a week or
two with a proper DPOA, we were instead required to seek the
authority of the Court. We filed a Petition asking the Court
to appoint Betty and Margaret as co-guardians of Joe. Since
a guardian (even if it is the spouse) may not convey
property of the Ward without Court approval, we must also
file a Petition for Authority to Establish an Estate Plan,
along with a number of emergency motions to try to get the
approval as quickly as possible. Betty must pay privately
for Joe’s nursing home care until we obtain the Court’s
approval to do the transfers under the guardianship and
obtain MassHealth eligibility.
So, while I was reluctant to preach once again about the
importance of doing advance planning, I am reminded on a
daily basis that this message warrants repeating – over and
over and over again. Don’t be caught carrying an ad a year
from now – take steps today to protect your hard-earned
assets. Update your documents while you can still
(knowingly) sign your name.
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