Here are documents that should be created before challenges occur so that it’s clear who’s in charge and what a person under a disability wishes.
On April 21, 2016, the iconic musician Prince died in his Paisley Park, Minn., home at the age of 58.
Shortly after his death, the Associated Press asked Prince’s lawyer, L. Londell McMillan, if he believed there was any drug use involved. McMillan’s response was, “[N]ot any drugs that would be any cause for concern.”
Later, a toxicology report from the Midwest Medical Examiner’s Office stated that Prince had died of an accidental Fentanyl overdose. Fentanyl is a synthetic opioid that’s 50 to 100 times more potent than morphine. According to The New York Times, the son of a California addiction specialist, Dr. Howard Kornfeld, was the person who discovered Prince and called 911.
This is an alarming series of events because Prince seemed to be surrounded by people who truly loved and cared for him. However, no one, including his attorney, appears to have made any effort to assist him until Prince was in crisis.
The most effective way to prevent opioid dependence and overdose deaths is to identify and treat mental health, substance abuse, and physical problems before substance use disorder develops, according to a paper, “Medicaid and the Affordable Care Act: Vital Tools in Addressing the Opioid Epidemic,” presented at the 2017 National Health Law Program. “Access to timely, evidence-based preventive services saves money and lives,” the paper added.
Many attorneys and families aren’t aware that there are legal resources available before a crisis occurs if a person has the legal capacity to sign documents. Once an individual’s ability to consistently meet their professional responsibilities becomes erratic or their behavior makes their personal life chaotic, you can suggest that a plan be developed.
The goal of that plan should be to assist individuals, families, and friends who wish to help and don’t want to wait for a crisis and the need for restrictive forms of intervention, such as a guardianship or conservatorship.
Some options are well known and easily accessible. Others require an understanding of public benefits. All require honest, frank conversations and sometimes asserting authority over another adult’s life, which can cause anxiety and stress for both the individual needing help and the family and friends attempting to provide that help.
Documents to consider
The May arrest of professional golfer Tiger Woods for allegedly driving under the influence provides another example of when it would be appropriate for an attorney, family, and friends to discuss creating legal documents to allow support for a loved one who may not know they need help.
Here are some documents that may be useful:
1. Advance medical directive—Anyone over the age of 18 should have this document in place naming a surrogate to provide informed consent to doctors and authorizing the surrogate to receive confidential medical information.
The Health Insurance Portability and Accountability Act of 1996, or HIPAA, allows a health care agent to have unlimited access to the principal’s medical records, including those that contain protected health information under HIPAA.
This can be very important if problems develop with drug use or the principal’s refusal to take medication. The surrogate can investigate treatment resources and assist in securing placement in a treatment facility, if necessary.
This document has become so important that every April 16, National Healthcare Decisions Day is observed nationally. An attorney, Nathan Kottkamp, was compelled to begin the observance in 2008 to raise awareness because he realized that most of the cases that came before the hospital medical ethics committee he sat on could have been resolved if an AMD had been in place.
Many states have a free, statutory health care directive that’s available from the state government, such as the Maryland Statutory Advance Directive. There are also free digital AMDs at online portals such as MyDirectives.com.
2. Psychiatric advance directive/mental health advance directive—According to the National Resource Center on Psychiatric Advance Directives (www.nrc-pad.org), people who have a diagnosed disability may feel comfortable creating a psychiatric advance directive, also known as a mental health advance directive.
This is a legal document that allows a second party to act on behalf of a person who experiences an acute episode of a psychiatric illness and becomes unable to make decisions about their treatment.
The PAD is written while the person has capacity. It allows them to list medications and dosages they know are helpful and medications or treatments they don’t wish to receive. The document may list names of healthcare professionals and people who may help with paying bills and caring for children, pets, or plants. It may even list people who aren’t allowed to visit.
These documents are state specific, and the statutes vary from state to state. A few states don’t have any law governing mental health advance directives. To get state-specific information about PADs, contact the National Disability Rights Network at 202/408-9514 or email@example.com.
3. General durable power of attorney—Everyone over the age of 18 should also be encouraged to create this document for finances. It names an agent/attorney-in-fact to step in, when necessary.
This document can be especially important in trying to monitor cash transactions or manage a person’s residence. For example, the Maryland General Assembly passed legislation last year that allows an agent under a correctly drafted document to access and monitor digital accounts.
Powers of attorney are state specific and, therefore, must meet statutory requirements, which vary from state to state. Some caveats are important to remember. The Internal Revenue Service recognizes only its own power of attorney document (Form 2848). Also, some banks and other financial institutions are wary of accepting powers of attorney executed many years prior to their use.
4. Joint tenancy—Many people prefer the ease of joint accounts. But it’s not advised unless it’s between spouses or for an extremely small account. A joint tenancy with the right of survivorship doesn’t create a duty or obligation requiring the joint owner to use the property for the benefit of a disabled joint owner. This may not even be a workable arrangement if one spouse has a disability or addiction.
5. Revocable living trust—Where an individual isn’t receiving public benefits and has assets that may need protection, a competent adult may create a revocable living trust that can be amended or revoked during the adult’s life.
The adult is the grantor/settlor and the trustee of the trust. Once the trust is created, the grantor/settlor may fund the trust, or the trust may be funded later. The trust is funded by transferring the ownership of assets into the trust. All property in the trust passes outside of probate, and a successor trustee may continue to manage or distribute the property.
6. Third-party discretionary needs trust—If there are concerns about leaving assets to a family member who has an erratic lifestyle or a history of abuse or addiction, or if the concern is to protect funds for a family member from creditors, the creation of a third-party discretionary needs trust may be wise.
There are no payback requirements, and the trust wouldn’t disqualify the beneficiary from public benefits. The person creating the trust, the donor, should be aware that they may be subject to a penalty under the five-year look-back period if the donor needs to apply for medical assistance or ong-term care in the future.
7. Statutory discretionary trust—Many states have statutory discretionary trusts that may be useful when planning to leave assets to a loved one with a substance use disorder. For example, under the Maryland Discretionary Trust Act, the trust’s beneficiary doesn’t have to be receiving any public benefits when the trust is created.
The trustee has title to all assets in the trust and complete discretion over distributions from the trust, and the beneficiary of the trust is protected from creditors. However, the beneficiary can’t be the trustee.
Some states have common law discretionary trusts. This type of trust isn’t advised for spouses because it may bar eligibility for Medicaid benefits if one spouse needs them in the future.
8. Public benefits trusts—If a family member is receiving public benefits, such as Supplemental Security Income or Medicaid, they’re generally not allowed to have resources over a specific amount. In Maryland, for example, the maximum allowed for SSI is $2,000, and the maximum for Medicaid is $2,500.
There are specific trusts that may be used under these situations. A D4A trust, self-settled special needs trust, or Medicaid payback trust is prepared by an attorney and is a state-specific trust for a beneficiary under the age of 65. Only a parent, grandparent, guardian, or court may establish one. For the trust to be deemed a non-countable resource, it must be approved by Medicaid (in Maryland, for example, the approval is from the Maryland Department of Health and Mental Hygiene).
A pooled trust is managed by a nonprofit agency that creates an account for each individual but may pool the money for investment purposes (an example is the First Maryland Disability Trust). Anyone can join a pooled trust, and the beneficiary may join themselves if they have a modest amount of assets and nobody with the knowledge to manage or understand public benefits.
Joining a pooled trust is less expensive than having an attorney draft a trust, and the pooled trustee will handle all the annual government redeterminations and other caregiving responsibilities.
All of these documents should be created before a crisis occurs so there’s an understanding of who’s in charge and what, if any, direction has been given by the person under a disability. Once a crisis has occurred, the individual needing help may not have the capacity to engage in planning or to sign documents or may not be willing to participate in planning
Finally, to avoid scenarios like the tragic death of Prince, individuals named in the legal documents must not hesitate to act before a crisis occurs.