By Jeffrey R. Wolfe, Senior Vice President, Manager of Wealth Planning StrategiesPrint This Post
Times have changed. Masks, social distancing, quarantine – it’s a new world. One thing that remains, though, is making sure you plan for yourself in case of an emergency. Perhaps one of the most overlooked planning needs, but one that is incredibly important, is incapacity planning.
Many people either fail to address incapacity or just think it “won’t happen to me.” While that logic has always been flawed, it’s especially troublesome now considering the pandemic. Consider the medical side of incapacity planning, what happens if you are in the ICU? Who’s going to make medical decisions for you? How will they know your intentions? In light of our medical situation now, incapacity planning for health care is more important than ever.
Even if you avoid COVID, planning for your incapacity is still extremely important. Did you know that by the time you reach the age of 65, your chances of becoming incapacitated rise to over 50 percent? If you live to be over 80 years of age, this statistic reaches nearly 75 percent. Although can be a key disability factor, even those under retirement age have a 20 percent chance of becoming incapacitated. In short, you need to plan for this possibility.
Two Important Documents: The Durable Power of Attorney and the Living Will
For health care concerns, there are typically two primary documents implemented, a durable health care power of attorney and a living will (sometimes called a health care directive). Typically, a durable heath care power of attorney authorizes someone to make medical decisions for you in the event of your incapacity. While most documents have broad powers granted to your agent, you can limit or expand those provisions to your liking. Moreover, this document is often used in conjunction with a living will to help avoid confusion and delay when making medical decisions.
The living will, also known as a health care directive, lists your intentions with regards to the use of life sustaining measures should you become unable to communicate these desires and are threatened with a serious illness or medical condition. Unlike a power of attorney, this document indicates your wishes rather than naming an agent to make decisions for you. A living will is oftentimes a companion document to a health care power of attorney.
Having these documents in place can help secure that your wishes will be followed when it comes to your care. If you don’t have these documents, contact your legal advisor to get started.
Even if you have this planning in place, it’s time to review them now. First, how old are they? Does your document still align with your wishes? Does it contemplate modern medicine or is it dated? Take a look at your documents to make sure they say what you want.
Whether a new plan or reviewing to see if your documents are in order, many traditional planning documents do not contemplate something like COVID. For example:
Ventilators: Many traditional health care powers direct that a ventilator not be used to sustain life. While that direction may have been intended for a “vegetative state”, what if you need a ventilator for COVID?!
Experimental Drugs: Another common provision is that “no experimental drugs” be used for care. However, the drug treatment Remdesivir has been used on many patients who have recovered relatively quickly from COVID. That said, because it was originally created to treat Ebola, Remdesivir is technically deemed “experimental” right now for COVID treatments, meaning your health care agent may not be able to approve the drug for your care.
Durable vs. Springing Powers: If your health care declaration isn’t “durable” that too could be an issue. Typically, health care powers of attorney are either “durable”, meaning effective immediately regardless of your capacity, or “springing.” Springing health care directives typically require one or two doctors to declare a you “incapable of managing your affairs” before your agent can act for you. If you have a springing power, think about how difficult or time consuming it may be to get “my primary care physician plus another physician” to take the time to document incapacity, which is a typical provision. In the meantime, important medical decisions can’t be made. You should consider a durable health care power.
Like car insurance, health care planning is something that you need, but hopefully something you don’t need to use. Creating a plan for your possible incapacity at least makes this scary prospect a little more tolerable. For more on how you may want to address these concerns, work with your financial advisor along with your tax and legal advisors to put a plan in place for you.
 Stephen M. Walter, Smart Estate Planning in Washington