Incapacity Planning – “What if I Can’t Take Care of Myself?” – Health Care Directives

When people think about estate planning, people immediately think of what will happen to their property after they die. But estate planning covers much more than that. A competent estate planner will also counsel clients to plan for incapacity. Incapacity is when a person is unable to make financial and/or health care decisions for themselves. Incapacity can be caused by accident, disability, illness, or old age. And the fact is, in today’s world and with today’s medical interventions, the chances are that any one of us will be incapacitated at some point, either temporarily or permanently. In fact, the U.S. Department of Health and Human Services estimates that 70% of people currently turning age 65 will need long-term care at some point. So, how should you prepare?

This is the third in a series of five posts on incapacity planning tools available in Minnesota including Power of Attorney, Health Care Directives, Long-Term Care Insurance, and Business Succession Planning.

Health Care Directives

Remember Terri Schiavo? There are many high-profile cases in which families have gone to court to fight for the authority to make the difficult decision of whether to continue life-sustaining treatment for a family member or to withdraw treatment. No matter whether the family members act out of love or are greedy for money or fame, most of these issues could have been addressed by executing a Health Care Directive.

A health care directive is a document that lets you give information about your health care preferences to others and appoint a health care agent to make decisions for you if you are unable to do so. It can also state your preferences for organ donation and to authorize either your agent or your doctor to determine when to discontinue life-sustaining treatment. Alternatively, you may choose to continue treatment under all circumstances for as long as possible. In Minnesota, additional powers may be granted, such as authority over disposing of your remains, making decisions about certain kinds of mental health treatment, and nominating your own legal guardian in the event one is needed.

There are many kinds of Health Care Directive forms available. Minnesota does offer a statutory version, most health care providers have developed their own, and other organizations such as 5 Wishes have developed forms. It's important to consider whether the form you use complies with Minnesota law. In my practice, I discuss the options and draft a custom document for my clients. Some of my clients choose to include personal messages to their loved ones to describe religious beliefs they want to guide the agent or just some reassurance that the agent is loved and the client knows an agent will do the best he or she can.

Factors to consider when selecting your health care agent and successor agents include geographic location (yours and theirs), experience making such difficult decisions and the emotional capability to do so. Though it is a common for parents to want to name co-agents, especially children, in most cases it is better to name a single agent with one or more successors in order to avoid gridlock.

Once the document is executed, you should provide a copy of your health care directive to your primary doctor and/or clinic, as well as any other specialist you see on a regular basis. I also recommended that you give a copy to your agent and successors and discuss any specific wishes you have regarding your health care beyond what is reflected in the document. Many health care directives also include a Health Insurance Portability and Accountability Act (HIPAA) authorization to assist the agent or successors in accessing your medical records and history.

Now I have someone handling my finances and making health care decisions, but how do I afford the care I need? Stay tuned for Part 4 of this series on Long-Term Care Insurance…