Accidents or, often, illnesses are unexpected. However, you should make legal plans for an accident or an illness. A number of events – such as a stroke, being comatose, or even under anesthesia – can incapacitate decision making. Your senior parents can suddenly need you to quickly make critical decisions on their behalf.
Without a medical proxy, an individual may be prohibited from getting medical information due to the 1996 HIPAA (Health Insurance Portability and Accountability Act) law.
At the worst moment, crucial time may be lost trying to determine even simple things such as:
- who is the primary doctor is
- what are standard prescriptions
- what does health insurance include or exclude
Timely decisions may be critical during medical emergencies such as:
- artificial respiration
- feeding tube
- cardiopulmonary resuscitation
- antipsychotic medication
- electric shock therapy
- antibiotics
- surgical procedures
- dialysis
- transplantation
- blood transfusions
- abortion
- sterilization
Without a medical proxy, doctors may make medical decisions or rely on the patient’s family in the following order:
- spouse
- domestic partner
- adult child 18 years or older
- parents
- siblings 18 years or older
- adult grandchild
- grandparent
- court appointed guardian
While there is a hierarchy of decision makers, there may be controversy. For example, what if a spouse or domestic partner is not legally separated, but the relationship is headed that way? What if there are several adult children who do not all share the same opinion? What if any relatives – children, parents, siblings, or grandparents – are estranged?
Delayed medical decisions could result in lost time, additional costs, or worse health outcomes. Avoid delays or familial disputes during a stressful period and instead focus on supporting each other through the healing process.
A medical or healthcare power of attorney is a type of advance directive which names the person or persons to make healthcare decisions for a stricken loved one unable to do so. This designation can be temporary, permanent, or situation dependent.
Impairment or end-of-life situations can happen at any time – so, it’s better to be prepared ahead of time.
Your Choice, Your Will
Absent a will, the assets of deceased New Yorkers are dispatched upon death according to state law. Intestates is the legal term describing dying without a will. The current familial designation is as follows:
- spouse (first $50,000)
- beyond $50K, 50% split between spouse and descendants – (children, grandchildren)
- parents
- siblings
- other known relatives
- parents’ relatives
- escheats to New York State
This is relatively clear in most instances. The waters get muddied in the case of divorce, remarriage, stepchildren, or adoption. Long-term, but unmarried partners might have little to no rights without any documentation on a lease, deed or medical proxy.
To ensure that affairs are handled according to wishes, have preferences documented in a will. Otherwise, you risk inviting legal burdens – especially among litigious potential heirs.
Longer life expectancy includes increased risk of age-related disease such as Alzheimer that could impair decision making. With increased assets, often related to a 401K plan or real estate appreciation, the stakes are higher. With increased divorce rates, the variation of relationships is extended beyond the “nuclear family”.
Things can become further complicated when:
- a private business is owned with a lot of assets
- there are properties in multiple states subject to different jurisdictions
- Non-family members, such as a business partner or creditor, have legitimate claims
Besides tax planning or shielding assets, there may be estranged relatives that need to be explicitly disinherited. Also, there might be specific-use stipulations, such as college tuition payment or age-related asset distribution.
While real estate and stock ownership comprise most people’s assets, other valuable property might include:
- Vehicles
- Furniture
- Jewelry
- Art
- Life insurance plans
- Bonds or Annuities
- 401Ks, IRAs, or other retirement accounts
- Bank accounts
Any encumbered asset would first require the discharge of related debt prior to any transference. An example of this would be paying off a mortgage first with the sales proceeds.
You should also update your beneficiaries every few years or after a life-changing event. For example, if your family changes due to marriage, divorce, death, or birth, make sure that you have your preferred recipients prioritized.
Two documents provide clarity about your preferences in sickness or death:
- A will simplifies probate by stating how you want your assets to be distributed upon death
- A health care proxy designates one or more individuals to make decisions on your behalf when you are medically unable to do so.
Other documents worth evaluating:
- A trust
- An estate plan
This post is not legal advice, and it is not comprehensive. Rather, it is meant to provide background information so that you begin to get informed, ask good questions, and identify professionals who can help you.