CURRENT ISSUES IN THE AREAS OF ESTATE, TAX
AND PERSONAL AND BUSINESS PLANNING
The information that follows summarizes some of the current issues in the areas of estate, tax and personal and business planning which may be of interest to you. Although this information is accurate and authoritative, it is general in nature and not intended to constitute specific professional advice. For professional advice or more specific information, please contact my office.
SWIRCA & More. It is not often that I pitch for any organization, but I do periodically feel compelled to extol the wide-ranging and beneficial services provided by Southwestern Indiana Regional Council on Aging, Inc. (“SWIRCA & More”). The “AND MORE” references the wide variety of outreach services and resources that SWIRCA & More provides to disabled people of all ages as well as to adults age 50 and over, and their caregivers. SWIRCA & More is a local nonprofit organization and Indiana’s third largest Area Agency on Aging. For over 40 years it has served six counties in Southwestern Indiana, including Gibson, Perry, Posey, Spencer, Vanderburgh, and Warrick Counties. It achieves its mission through focused efforts to empower individuals of all ages to remain living safely in their home by providing information and supportive, client-centered services. Last year alone SWIRCA & More provided free, unbiased resource counseling to over 1,500 seniors, prepared and served nearly 300,000 meals through its Meals on Wheels program, delivered care coordination services to 3,000 individuals, and offered more than 15 weekly exercise and educational programs to 1,200 seniors through its Activity and Wellness Center. SWIRCA & More relies heavily on community and donor support to supplement restricted federal and state funding. Gifts to SWIRCA & More will aid programs such as Meals on Wheels of Southwestern Indiana, the Aging and Disability Resource Center (“ADRC”), and SWIRCA & More’s Activity and Wellness Center. Eighty-eight cents of every dollar raised through donor support is put to work helping disabled youths and adults, as well as seniors, to obtain the resources and services needed. One day you, and if not you, almost certainly members of your family, will need the services of SWIRCA & More. The ADRC is generally the first point of contact, and its representatives will advise and connect individuals to the appropriate resources, including not only SWIRCA & More but unbiased community services which are available. SWIRCA & More also maintains a searchable, online Senior Resource Guide to provide personalized, easy access to available community resources in its service area. Its Case Managers act as advocates for the needs and rights of seniors and persons with disabilities of all ages to ensure a safe and healthy living environment. Your contributions to SWIRCA & More will be put to good use. Please consider SWIRCA & More when engaging in your estate and financial planning as a possible recipient of your benevolent gifts.
Auxiliary Estate Planning Documents – Continued. The last issue of this newsletter commenced a discussion about auxiliary documents used in the so-called estate planning process besides the typical will or trust. As addressed in the last newsletter, as well as in other newsletter commentaries, beneficiary designations are among those documents that are most frequently either not used when they should be, or used inappropriately. We will now address certain planning issues applicable to health care advance directives.
Previous issues of this newsletter have addressed various aspects of health care advance directives and how they are frequently misunderstood and misused. Health care advance directives in Indiana will typically include three documents: a power of attorney for health care in which a health care representative will be designated, a living will, and a HIPAA authorization form. HIPAA refers to the Health Insurance Portability and Accountability Act, which is a federal privacy law designed to restrict access to protected health information. Having a HIPAA authorization form in place will facilitate the ability of your health care representative to obtain access to your protected health information. Unfettered access is obviously needed in order for your health care representative to be able to make appropriate health care decisions.
Most people consider the living will to be the sole or the most important document in the area of health care, but in fact, it is the least important document. A living will addresses a terminal condition and only comes into play when the patient is unable to make health care decisions for himself or herself, and when there is not a health care representative available to make that decision. Living wills follow a statutory format and they are often completed improperly.
The most important document is the power of attorney for health care which includes the health care representative designation. The signor should indicate in that document his or her specific wishes in the areas of artificial nutrition and hydration, reversible secondary conditions (i.e., an infection might be treated, but treating the infection may not impact the ultimate outcome), resuscitation, and pain medication. Most people want to make it very clear that they wish to receive needed pain medication even if receiving it increases the risk of death due to having received the pain-relieving medication. It is very important in the power of attorney for health care and appointment of health care representative instrument to clearly indicate what your wishes are in various areas. There should not only be a health care representative named, but there should be at least one successor designated as well.
Copies of health care advance directives should be provided to your primary physician and be made a part of your permanent medical record. Copies should be kept in a suitcase or travel bag, as well as in your automobiles. Don’t travel without them. When requested, they should be provided to your health care providers. If unavailable, they should be provided when they are available. New documents should not be signed at the time of a hospital admission just because you may not have your documents with you as the new documents would supplant the existing documents which are most likely more carefully crafted than the hospital’s generic forms. Very few people fully understand health care advance directives, and I have been in conversations with many physicians that make it very clear they do not understand fully how they operate. It is very important for people to receive proper advice in the area of health care advance directives and that they sign individually crafted documents rather than generic forms.
In the next issue of this newsletter we will address financial powers of attorney.
Coordinating Estate And Financial Planning With Other Professionals. It is common for an attorney assisting a client in the estate planning process to work with other professionals in both the planning and implementation of the client’s arrangements. If a client currently has a financial advisor, then obviously the financial advisor should be included in that process. Unfortunately, many financial advisors work with their clients and do not recommend that they engage in the appropriate estate and asset protection planning and do not seek coordination of services and guidance with the client’s legal counsel. All advisors should be included in the process.
It is particularly important in the area of retirement planning to be sure that all financial advisors are aware of the planning that is being undertaken. In the case of retirement accounts, often the financial advisor, and possibly the client’s CPA as well, may have much more information and a much better sense of what the client’s needs and goals are, and by including those advisors, a better plan can be implemented. In smaller estate planning situations with relatively small retirement accounts, it may not make sense financially for every possible beneficiary arrangement to be considered, but nevertheless proper attention should be given to the options which are available. It is very important to collect appropriate and accurate information regarding retirement assets, as well as all other financial resources, and to determine the client’s particular goals and objectives. More heads will generally be better than one, and if a client is using multiple advisors, they should all play a part in the planning process.
Additional Information. Future issues of this Newsletter will address other issues of current interest. Please contact my office with any questions that you might have.