Estate planning and necessary health care documentation for an aging loved one was the topic presented at Wildflower Lodge Tuesday evening by Attorney Wyatt Baum of Baum Smith LLC of La Grande, who specializes in municipal law and family law.

“There are three documents we discuss in basic estate planning: the power of attorney, the advance directive and the basic will,” Baum said.

In situations where a person is getting on in years, a power of attorney is the most important document to have signed before incapacitating dementia or other health factors set in.

“This is a way to choose an individual to help make financial, banking, business and legal decisions should you become incapacitated at any time by stroke, illness, accident, or whatever the situation,” Baum said. “The Power of Attorney is a document you can draft before this type of incident happens.”

The POA document is flexible to draft in that it can be in force indefinitely or for a limited duration. This document can be written with a clause known as a “springing Power of Attorney” that allows the Power of Attorney to become effective after you have been deemed incapacitated by a licensed physician in writing. Until then, the aging one has full control of his own finances and legal matters.

An alternative to the POA is a legal guardian conservator. Proving an aged one needs a guardian can be difficult.

“You will need to have doctors come in to testify or you’ll have to present affidavits,” Baum said. “Then the court will set up a guardian conservator to act on the person’s behalf.”

If family members know their parent has early dementia but it hasn’t been officially diagnosed yet, a Power of Attorney can still be signed by the parent if the witnesses to the signature are able to testify that the parent was fully aware of what he/she was signing at that time. This can be contested in a court of law by an opposing sibling, for instance, which is why Baum suggested having a written statement by a physician declaring the person’s soundness of mind at that time.

Advance Health Care Directive

An “Advance Directive” assigns an individual as a “health care representative” (not to be confused with a Power of Attorney assignment). The health care representative is responsible for seeing that the conditions of the Advance Directive are carried out in the event the patient is incapacitated and cannot speak or convey his/her wishes to the health care provider.

The Advance Directive addresses medical treatment options and end-of-life care, including life support, tube feeding, hydration and other humane care that could prolong life or make the patient more comfortable until death.

The patient may also state specific limits to their care such as the refusal of transfusions of whole blood, red cells, white cells, platelets or plasma. The Advance Directive addresses specific medical situations like being close to death, permanently unconscious, advanced with progressive illness or enduring extraordinary suffering.

Advance Directives are specific to the laws of each state, so Baum suggested if the person is relocating to Oregon from another state that he/she initiate a new Advance Directive that reflects Oregon statutes.

“A lot of times people have two children and the (aged) parent thinks they are going to get along after he passes away,” Baum said. “Sometimes they do get along, but if they don’t, and they are co-health care representatives or co-Power of Attorneys, and one wants to do something and the other something else, then you have to take it to court to decide.”

Wills and probate

“Probate is the process by which the court distributes your assets when you pass away,” Baum said. “If the house is valued over $275,000, then it has to go to court. A personal representative will be appointed by the court, and there will be fees and required accountings and inventories after you file. You want to avoid that at all cost because you want to pass along as much wealth as you have accumulated to your family members.”

You can avoid probate if your house is valued under $275,000 and your personal property is less that $75,000. If the house is valued over that, then you can put a “transfer on death” clause on your deed, so that if both you and your wife pass away, the property automatically transfers to the children. Then each child would have an equal share of the house and then the house doesn’t have to go to probate.

Another way to avoid getting the court involved is to title your assets in joint-survivorship.

“If the house is in my name and my wife’s name, then if I pass away it goes straight to my wife,” Baum said. “Vehicles and bank accounts should be the same way.”

To start estate planning, fill out a “Confidential Estate Inventory” available free of charge at the Baum Smith office. Once that is completed, proceed by seeing an attorney to draft your will.

Trusts

“Trusts are ways to avoid taxes on property and the best way to shelter your wealth without being taxed,” Baum said. “If you have anything over $1 million in assets (or $5 million federally), it’s going to be taxed and you might consider trusts.”

A special-needs trust is a legal document written to benefit a person with specific health needs, a stroke victim, for example. It is a way to set up money to take care of a person without making him/her ineligible for Medicaid benefits. It goes to pay for items not covered by Medicaid like dental services. Baum said it can’t go toward rent, food, clothing or primary medical expenses.

These legal documents and others are all part of estate planning, and a serious matter to consider before a loved one becomes incapacitated by dementia or other health-related causes.