will or trust estate planning health care directives power of attorney

Estate Planning Tips During COVID-19

When it comes to COVID-19, there is so much that feels beyond our control.  With estate planning (wills or trusts and more), there are things that you CAN control. Here is a list of things you can do (from an estate planning perspective) that may help you feel a little more in control:

#1 During this COVID-19 crisis, who are your emergency health care decision makers?  

Talk to your loved ones about your wishes regarding your medical care. First, who would you want to step up to advocate for you during a health care crisis? The two parts of Health Care Directives are the Designation of Health Care Surrogate and Living Will. With the Designation of Health Care Surrogate, you nominate someone you trust to make health care decisions for you in the event that you are unable to communicate those decisions yourself. With a Living Will, you can include directions regarding end of life decisions, as well as other decisions about your care and treatment.

#2 Look for your HIPAA Authorization.

Your Health Care Directives should also include a HIPAA Authorization.  HIPAA Authorization language follows the requirements Health Insurance Portability and Accountability Act (HIPAA) to authorize your designated patient advocate to receive information about your health condition and status.  Without one in place, a hospital, medical office, or third-party medical provider may not be able to release medical records or other medical information to your designated patient advocate.

#3 Update or create a Durable Power of Attorney.

A Durable Power of Attorney for Finances lets you designate an Agent to access your assets and make financial decisions on your behalf. A Durable Power of Attorney’s scope can be as broad or as narrow you wish.  Some of the more common powers an Agent may need in emergency situations include handling financial transactions, dealing with bank accounts, transferring funds, paying bills, filing taxes, funding a trust, updating beneficiary designations, and addressing insurance claims.

Learn more about a power of attorney here.

#4 Review your Will or Trust

A Last Will & Testament and Revocable Living Trust Agreement address how you want your estate to be handled upon your passing. It is important to review your existing estate plan if your goals, family or financial situation has changed since you last had your estate plan prepared.  If you do not have a basic Will or Revocable Living Trust Agreement in place, now is a good time to begin the estate planning process. Because if you don’t do anything and you pass away, your family will be stuck with the state’s intestacy laws, which could result in distributions that are contrary to your wishes.

Learn more about Wills here.

Learn more about Trusts here.

How do you know if you need a Will or a Trust?

#5 Check your guardian designations for your minor children.

If you have minor children, you need to designate guardians. In Florida you can do this in your Will and in a separate document. Above all, if you don’t legally nominate guardians for your kids. Your family members could end up in court fighting over who gets to raise them (and control their inheritance).

#6 Check beneficiary designations and asset titling.

Life insurance, annuities and retirement plans pass according to their beneficiary designations, regardless of what your Will or Trust provides.  It is important to coordinate the beneficiary designations with the rest of your estate plan.  Make a list of your assets.  For example, do your accounts show a joint owner?  If you have a trust, does the account statement show the trust name?  Check the beneficiary designations for life insurance and retirement plans. If you need to update these, contact your financial advisor to get your beneficiary forms. If you’re not sure how your accounts fit in with your estate plan, contact your estate planning lawyer.

Avoid these common life insurance mistakes.

#7 Update your passwords list and digital information. This is part of your estate plan.

We live in a digital world!  First, create an inventory of your online accounts and digital files,. Second, note your login IDs and passwords. Remember to note the answers to any security questions and what type of two-factor authentication is in use.  Third, identify all of your devices. For example, make a list of your smartphones, tablets, smart speakers ( like Alexa), laptops, desktop computers. Also, note their passwords, along with the passwords for any important apps. Finally, inventory the other electronic records you use, own or control.

Here’s an article about password managers.

#8 What are your family financial needs?

The COVID-19 pandemic has hurt many families financially.  Therefore, you may want to make gifts or loans to family members.  The annual gift tax exclusion amount is currently $15,000 per person.  For loans to family, the IRS requires that you charge the Applicable Federal Rate (“AFR”). That rate is based on the length of the loan.  You should carefully document gifts and loans to avoid misunderstanding and confusion in the future.  Note that family gifts and loans may affect eligibility for Medicaid benefits.

#9  Remember that you’re not alone! Check in with the experts that you know for help.

There’s a ton of news about health care, finances, state and federal government orders.  Ask your professional advisors for help. We’re trained to sift through what’s important and applies to your situation. Finally, check in with your advisor team and ask for advice. We’re here to help.

Can An Adult Child Be Liable for a Parent’s Nursing Home Bill?

Although a nursing home cannot require a child to be personally liable for their parent’s nursing home bill, there are circumstances in which children can end up having to pay.

This is a major reason why it is important to read any admission agreements carefully before signing.

Federal regulations prevent a nursing home from requiring a third party to be personally liable as a condition of admission. However, children of nursing home residents often sign the nursing home admission agreement as the “responsible party.” This is a confusing term and it isn’t always clear from the contract what it means.

Typically, the responsible party is agreeing to do everything in his or her power to make sure that the resident pays the nursing home from the resident’s funds.

If the resident runs out of funds, the responsible party may be required to apply for Medicaid on the resident’s behalf. If the responsible party doesn’t follow through on applying for Medicaid or provide the state with all the information needed to determine Medicaid eligibility, the nursing home may sue the responsible party for breach of contract. In addition, if a responsible party misuses a resident’s funds instead of paying the resident’s bill, the nursing home may also sue the responsible party. In both these circumstances, the responsible party may end up having to pay the nursing home out of his or her own funds.

In a case in New York, a son signed an admission agreement for his mother as the responsible party. After the mother died, the nursing home sued the son for breach of contract, arguing that he failed to apply for Medicaid or use his mother’s money to pay the nursing home and that he fraudulently transferred her money to himself. The court ruled that the son could be liable for breach of contract even though the admission agreement did not require the son to use his own funds to pay the nursing home. (Jewish Home Lifecare v. Ast, N.Y. Sup. Ct., New York Cty., No. 161001/14, July 17,2015).

Although it is against the law to require a child to sign an admission agreement as the person who guarantees payment, it is important to read the contract carefully because some nursing homes still have language in their contracts that violates the regulations. If possible, consult with your attorney before signing an admission agreement.

Another way children may be liable for a nursing home bill is through filial responsibility laws.

These laws obligate adult children to provide necessities like food, clothing, housing, and medical attention for their indigent parents. Filial responsibility laws have been rarely enforced, but as it has become more difficult to qualify for Medicaid, states are more likely to use them. Pennsylvania is one state that has used filial responsibility laws aggressively.

We recommend that your Health Care Directives explicitly lay down a financial liability shield for your agents.

This one provision can save great grief and money.

This article is a service of the Law Firm of Myrna Serrano Setty, P.A. We don’t just draft documents, we help you make informed and empowered decisions about life and death, for yourself and the people you love. That’s why we offer a Planning Session, during which you will get more financially organized than you’ve ever been before, and make all the best choices for the people you love. Call our office today to schedule a Planning Session. Mention this article to learn how to get this $500 session at no charge. 

Call us at (813) 902-3189.