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Why You Need an Advance Health Directive, also known as a Health Care Proxy with Advance Medical Directives
Patricia Bloom-McDonald • Apr 25, 2018

Planning for a time when you are incapable of caring for yourself and for making major decisions about your health care when facing end-of-life situations is not easy. While many people profess that they do not want extreme measures to be taken if it means living with a greatly diminished quality of life, very few of us actually put those wishes in writing or advise our spouse or close relatives. Without a written instruction or direction, the default decision is to implement option treatments that may keep you alive under all circumstances.

A recent study showed that while 80% of those surveyed agreed that end-of-life planning should begin while you are healthy, less than 40% had actually named someone to make those decisions. Even fewer had discussed what to do in end-of-life situations with family members.

You can avoid this possibility and relieve your loved ones of the emotional burden and trauma that comes with making such decisions on your behalf, should you be incapacitated, by creating an advance medical directive. Over the course of your life, you make decisions regarding employment, where you want to live, how to raise your children, and how to spend your money. Making a decision about your health care under circumstances where you are suffering from dementia, or a critical illness, or injury is no less significant.

Your family, as well as your doctors, will want firm proof of your intentions. Have a family discussion now about what quality of life means to you and what to do if facing an emergency situation. By communicating your wishes clearly to your spouse or children ,and documenting your instructions, you can prevent emotional arguments as to what course of care to follow.

There are two main forms of advance directives:

Health Care Power of Attorney

With a Health Care Power of Attorney, you appoint an “agent” or trusted individual, who is at least 18 years of age, to make your health care decisions on your behalf. In this document, you can specify the type of care you want or do not want. If you wish, you can limit the discretion of your agent and give your healthcare provider a clear instruction on how to proceed. The Health Care Power of Attorney only takes effect when you are unable to articulate your own medical needs, such as having dementia or you are unconscious because of an illness or accident. You can change your choice of agent or instructions at any time or simply revoke it if you wish.

Living Will

Many people have heard of a Living Will, which instructs your loved ones to either implement extreme measures to save your life, or not take extraordinary measures to keep you alive if no hope is left for your recovery.  Massachussetts does not have a binding Living Will Statute so it your Health Care Power of Attorney is an instrument that should clearly advise your family about your intentions in the event you are either seriously ill or injured and the prospects for your recovery are not favorable, or you face a quality of life that is totally unsatisfactory to your personal wishes.

Get Started with End-of-Life Planning

Without clear guidance to your family members and to health professionals, you may have no choice but to allow unwanted medical procedures to be performed that can leave you in a medical condition that does not meet with your personal desires. Making your own End-of-life care decisions, ahead of time, can give your family the satisfaction that they carried out your last wishes.

Consider having your elder law lawyer draft a Health Care Proxy with Advance Medical Directives for you. You can discuss the implications of your decision with your attorney as well as other estate planning steps you can take. If you have a major diagnosis or your health has been declining, schedule an appointment or have your spouse or adult child do it with you so you can also have the peace of mind that comes with having made your own decision about the type of care to be administered and the quality of life you want to sustain if possible.

Consult Elder Law Lawyer Patricia Bloom-McDonald

There is no reason to wait before having a Health Care Proxy with Advance Medical Directives. Tragedy can strike at any time and being prepared will help your family members in the event critical decisions need to be made quickly.

Patricia Bloom-McDonald is an elder law lawyer who has been representing the interests and rights of the elderly for decades. Call her today for a consultation.

Using a Credit Card When You Have a Special Needs Trust

25 May, 2023
A special needs trust (SNT) allows you to meet your needs while receiving government benefits, such as Medicaid/MassHealth and Supplemental Security Income (SSI). When you have a special needs trust, you can use it to pay for goods and services government benefits do not cover, such as therapy, education,and housing. Since receiving income directly from your trust would jeopardize your eligibility for benefits, your trustee cannot give you cash from your SNT. When you use a credit card for permitted transactions, and your trustee pays off the balance with funds from your trust, these payments to a credit card company are not considered income. An SSI or Medicaid/MassHealth recipient who is capable of managing their own affairs can therefore use a credit card to make small purchases, and the trustee of the special needs trust need not micromanage every transaction. In the past, beneficiaries of SNTs sent their bills to their trustees for payment. Today, an individual with an SNT who qualifies for a personal credit card may find that using a credit card is more convenient. Credit cards have several benefits. Using a credit card to manage payments from your special needs trust allows you to maintain independence, gain access to some of the advantages of a credit card, and easily keep records while preserving your eligibility for Medicaid/MassHealth and SSI. Although credit cards can help people manage their special needs trusts, there are also several important restrictions and considerations to keep in mind. Consult with a special needs planner to ensure all transactions are acceptable under the trust's rules and comply with government regulations. The Benefits of Using Credit Cards When You Have a Special Needs Trust If you have a special needs trust, using a credit card has many benefits, including: Independence : Allowing you to maintain your independence. You can use your card to make qualifying purchases yourself. Your trustee does not have to make the transactions for you. Access to the Typical Advantages of a Credit Card : Using it responsibly can help you establish or build credit history, which may be important for your future financial needs. Record-Keeping : Credit cards provide easy record-keeping and a convenient way to monitor transactions from your special needs trust, which can also help special needs trustees fulfill their duty to maintain records. When you use your card, your trustee can observe your purchases and ensure that all expenses are allowable under the trust’s rules. Your statements can help your trustee keep track of funds leaving the trust. Benefits Eligibility : While adhering to Medicaid/MassHealth and SSI’s income and asset limits, you can access funds from your SNT. Credit cards can help prevent your trustee from accidentally providing you with cash payments that could affect your eligibility for government benefits. Considerations When Using a Credit Card for Your Special Needs Trust While you can use a credit card to access funds from your special needs trust for certain transactions , restrictions apply. If your trustee sees a charge on your card that could affect your benefits eligibility , they can flag it for review. You cannot use your credit card to pay for food and shelter, which SSI would cover. When administering your funds, your trustee must ensure that any expenditures are for your sole benefit if you have a first-party special needs trust. While using a credit card is appropriate, you should not use a debit card. Debit cards are considered cash income. Best Practices When using a credit card for a special needs trust fund, remember several best practices. Choose a card with low fees and interest rates. Set a clear budget and monitor transactions regularly. Keep thorough records and receipts of expenses. Consult with your special needs planning attorney. A special needs planning attorney can help you navigate the rules that apply to your trust and understand how to use a credit card to preserve your Medicaid/MassHealth and SSI eligibility. 

How an ILIT can help offset estate taxes

12 May, 2023
With the Federal estate tax exemption possibly about to be lowered, it may be time to think about steps you can take to keep your estate from being taxed. An irrevocable life insurance trust allows you to pass on money to your heirs while avoiding both the federal estate tax, as well as any applicable state estate tax which is currently $1 million in the Commonwealth of Massachusetts. Senate Democrats have proposed lowering the current estate tax exemption from $11.7 million for individuals and $23.4 million for couples to $3.5 million for individuals and $7 million for couples. While it is unclear if this proposal will pass, it is likely that some change to the estate tax is coming. Even if Congress does not take any action, the current rate will sunset in 2026 and essentially be cut in half, to about $6 million per individual. In the Commonwealth of Massachusetts, the current estate tax exemption is $1 million for individuals and is taxed at dollar $1.00. A proposal to raise it to $3 Million and the tax to start at $3 Million (not at $1.00) has been submitted in the legislature but has not yet been voted on or enacted. One way to make up for any estate tax your estate may have to pay is by setting up an irrevocable life insurance trust [ILIT]and funding it with a policy that has a death benefit that would pay your heirs some or all of the amount your estate will be taxed. If you purchased such a life insurance policy directly, it could end up being taxed as part of your estate. But if a trust owned the policy, it could pass outside your estate. While a life insurance trust can be highly beneficial, it is also complicated to set up and maintain properly. The following are some of the requirements: Trustee . If you are setting up the trust, you cannot also serve as a trustee. If you are the trustee, you have control of the trust, which could lead to the trust being included in your estate. You will need to name another trusted person or financial institution to act as trustee. Policy ownership . The trust must own the life insurance policy. If you transfer an existing policy to the trust and die within three years, the policy will still be considered a part of your estate. To avoid this risk, the trust can purchase a policy directly rather than receive an existing policy. Premiums . You need to transfer funds to the trust to pay the policy premiums, which creates an issue with gift taxes. A transfer to a trust is usually not subject to the $15,000 yearly gift tax exclusion. For a gift to qualify for the exclusion, the recipient must have a "present interest" in the money. Because a promise to give someone money later does not count as a present interest, most gifts to trusts aren't excluded from the gift tax. To avoid this, you can use something called a “Crummey” power which gives beneficiaries the right to withdraw the funds transferred to the trust for up to 30 days. As part of the process, the trustee needs to send them a letter, known as a Crummey letter, letting them know about the trust funding and their right to withdraw the funds. After the 30 days have passed, the trustee can use the funds to pay the annual insurance premium. You run the risk of the beneficiaries withdrawing the funds, but if they know that by allowing the money to stay in the trust they will receive more money later, it shouldn’t be a problem. Beneficiaries . The beneficiary of the life insurance policy is usually the trust. Once the funds are deposited in the trust, the trustee can distribute the assets to the beneficiaries in the way specified by the trust. For example, if your beneficiaries are minors, you can wait to have the trustee distribute the assets. Keeping the assets in the trust will also protect them from your beneficiaries’ creditors. The downside of an irrevocable life insurance trust is that you do not have the ability to change it once it is set up, although the policy would effectively be canceled if you stopped paying the premiums. If you are considering this type of trust, discuss it with your attorney.
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