Elder Law is a relatively new field of law that focuses on issues that affect our aging population. It can trace its origins to the Older Americans Act of 1965, the same year Medicare was created.
Managing assets, making medical decisions and paying for long-term care for people with disabilities of all ages are the particular focuses of Elder Law attorneys. In these and other areas, the Elder Law attorney is often asked to advocate for clients with diminished capacity to ensure that their wishes, both medical and financial, are fulfilled. Here is an overview.
Drafting a financial Power of Attorney (POA) allows an individual to maintain control over his/her assets until he/she becomes incapacitated. A POA is a document of agency in which one party (the principal) gives another party (the agent) the authority to act for him/her. Powers of attorney may be limited, in which the agent’s powers to act are restricted, such as by defining certain responsibilities or setting a time limit for the POA; or, general, which can include the ability to make irrevocable trusts, and is only terminated if the principal dies, or irrevocable if the principal becomes disabled and does not have the capacity to revoke.
Trusts are another asset management tool, which can provide the person creating the trust the ability to control how his or her property is managed through the trust terms. A trust is an agreement with at least three people: the settlor, the trustee and the beneficiary. Trusts can be revocable or irrevocable and used for a number of different purposes.
Special needs trusts allow people with disabilities to qualify for public benefits while having money in a trust to pay for things public benefits do not provide. Four kinds of special needs trusts are created by the Social Security Act:
- An Exempt Trust subject to “payback” to the state, is created for the sole benefit of the A/R, who must be under 65 years of age and disabled;
- A Pooled Asset Trust requires the same qualifications as an Exempt Trust; however, this trust pools together multiple accounts of people with disabilities for investment purposes, and is managed by a non-profit association;
- A Third-Party Special Needs Trust can be created by the applicant for benefits with their funds, for the sole benefit of the applicant’s son or daughter who is blind or disabled;
- Another Third-Party Special Needs Trust is created for the sole benefit of any disabled individual under 65 years of age (typically a disabled grandchild).
Medical Decision Making
The Maryland Health Care Decision Act (HCDA) was enacted in 1993 to ensure an individual’s right to give informed consent for health care decisions. Under the HCDA, if an individual wishes “no CPR” or only palliative care, they can say so in writing.
Living Wills & Advanced Directives: To aid in decision-making, individuals may also create health care advance directives and living wills. A living will is a written directive authorizing the provision, withholding or withdrawal of medical treatment, including life-sustaining treatment. An individual may also make a written directive appointing an agent to give informed consent according to the advance directive. Decision makers must use substituted judgment when possible, meaning, acting according to the wishes of the patient, on the basis of clear and convincing evidence that the disabled person would, if competent, make the same decision. In the absence of substituted judgment, the decision-maker may use the “best interest” test, meaning that the benefits to the individual resulting from a treatment outweigh the burdens to the individual.
Surrogate Decision-Making: A surrogate is a related individual within an order of priority who is able to make health care decisions on behalf of a patient who is incapable of doing so when the patient has not already designated a health care agent.
Paying for Long-Term Care
Long-Term Care is the variety of services (medical and non-medical) for people who have a chronic illness or significant disability. Medicare and most health insurance plans do not pay for long-term care (Medicare only pays up to 100 days of skilled nursing rehabilitation/care). Options to pay for Long-Term Care include long-term care insurance or using personal resources. Reverse Mortgages are another tool which enables homeowners to use the equity they have accumulated in their homes to produce an available pool of funds to draw from.
Continuing Care Retirement Communities (CCRCs) provide a continuum of care, from independent living to nursing home care. All of a resident’s health care needs can be taken care of either within the community or arranged for by the community. There are three types of CCRCs, which vary in cost and covered services.
Medical Assistance (MA) Long-Term Care (Medicaid) is a means-tested benefit program designed to assist those families or individuals with limited resources and income pay for their medical needs and long-term care. Eligibility requirements include the following: US citizenship; Maryland residency; aged, blind or disabled; requiring nursing home level of care; with income less than the cost of institutional care and assets less than $2500 for a single person (for a couple where one spouse is in a nursing home and the other is not, the community spouse can keep a house, car, and between $24,180 and $120,900). There are a number of asset protection strategies to assist in qualifying for Medicaid while fulfilling the disabled person’s intentions that their assets protect their spouse or others.