PART IV Fourth in a series of articles on financial and estate planning. Photo by Chris Carroll
Don't wait to protect yourself against legal, financial, and insurance-related uncertainties.
Everyone needs to create legal, financial, and other safety nets. If you're reading Neurology Now, chances are either you or a loved one faces health challenges that make creating these safety nets even more urgent.
But getting one's financial, legal, and other affairs in order takes more time than people think. Start now: you're more likely to succeed if you take a few steps every week or month, gradually implementing the changes discussed below.
Keep in mind that each person's health and personal circumstances are unique. Any general suggestion of how a safety net might work needs to be tailored for you.
America is facing a rise in what is referred to as elder financial abuse. It might happen by a home health aide stealing jewelry from a patient's home, a niece taking an older aunt for a walk to the ATM every week, or a “friend” being named under a power of attorney (a legal document designating someone to handle financial matters) and helping himself to assets. (See box, “Key Terms,” page 38.)
Everyone, with or without a neurologic condition, should have these documents on file—and know what they mean.
* POWER OF ATTORNEY appoints a person (called the agent) to handle legal, tax, and financial matters if you cannot. Most powers of attorney are durable, meaning they remain valid even if you are or become disabled.
* A REVOCABLE LIVING TRUST is a powerful tool for managing assets while someone is disabled. A trust is a legal agreement (a contract) between you as the grantor setting up the trust and whomever you name as trustee. The trustee might be you alone, or you and another person, or a bank, or you and a bank. When you transfer assets to the trust, the contract you created will govern how those assets are handled for your benefit. The most important decision is how you will have assets handled if you cannot do so yourself.
* A HIPAA RELEASE authorizes a person (called the HIPAA representative) to access your medical records. (HIPAA, which stands for the Health Insurance Portability and Accountability Act, protects the security and privacy of health data.) A HIPAA release can be used to enable a family member to monitor your medical status. However, a HIPAA release does not necessarily delegate medical decision-making to someone else.
* MEDICAL POWER OF ATTORNEY, also called a health proxy, authorizes a person (called the agent) to make medical decisions if you cannot.
* A LIVING WILL is a statement of your healthcare wishes. This can address whether you want experimental medical treatments if you are not well enough to make the decision yourself.
* A WILL names a person (called an executor or a personal representative) to handle your estate, appoint guardians for children who are minors, and distribute assets.
Experts believe that most financial abuse goes unreported. If abuse is detected, the perpetrator and the valuables may be long gone. Or, by the time a case winds its way through the legal system, the victim may not have the capacity to recall the details. These risks are potentially worse for people with neurologic conditions, especially those who experience cognitive impairment.
So how can you protect yourself and your loved ones?
Don't overlook simple, obvious steps: safeguard physical checks, credit cards, and other valuables. Consider purchasing a home safe.
Simplify and consolidate your financial holdings. The fewer institutions and accounts you have, the easier it is to monitor your money, stay in control, and prevent fraud. For example, if you prefer to save money in certificates of deposit (CDs), you might be tempted to open accounts in many different banks to be sure each account stays under the insurance limits. Instead, use the Certificate of Deposit Account Registry Service (CDARS). This permits you to have a CD account with one institution but spread your investment dollars into CDs of various institutions so each is under the insurance limit.
Don't hold valuable assets, such as stock certificates or bonds, in a safe deposit box. They are better off in an account at an institution that issues regular statements. One common form of financial abuse involves a “friend” taking an elderly or cognitively impaired person to visit a safe deposit box, after which valuables inexplicably disappear.
Another simple, cost-free safety net that few people use is to have a trusted person receive a duplicate copy of each important monthly statement to make sure no one is stealing assets. If you can afford to, have an independent certified public accountant (CPA) oversee these monthly statements. (The cost will depend on the volume of checks and transactions.) If you can't afford a CPA, name a trusted family member or long-time friend to receive the statements. Select someone who is not already named in your legal documents to carry out a financial role; that way, he or she will not have access to your assets. For example, let's say you're hospitalized for a month. If your son is named under power of attorney to handle your banking, then he should not be the person receiving the duplicate monthly statements.
Finally, consider establishing a revocable living trust, which is a contract between you and the person or institution (such as a bank) you name to serve as trustee. The trustee protects, invests, and spends your money on healthcare and other important items or services you authorize them to purchase. If your health permits, you could be the sole trustee (acting alone) or a co-trustee (serving with another). A key benefit is that if you become too ill to manage your financial and related affairs, an entire structure is in place to protect you. (See http://bit.ly/WHfyXs for more on revocable living trusts.)
While most people consider a will to be their key legal document, a will is not a safety net while you are alive. The most important legal safety net is actually a durable power of attorney. This document names a person (called an agent) to manage financial and legal matters if you cannot do so. (See http://bit.ly/MFAmdl for more on power of attorney.)
The first step in establishing a durable power of attorney is to name the person you feel is most appropriate to manage your legal and financial matters, not the person you feel obligated to name.
Then, meet with the person named under durable power of attorney and discuss what role he or she will play, where the accounts are, and what you would like the person to do (and not do) in an emergency.
As discussed above, have someone receive copies of monthly statements to monitor the actions taken by the person you named under durable power of attorney.
Don't ignore the document once it's been signed. Once a year, discuss it with your lawyer. If that's too costly, discuss it with trusted friends and family to make sure your choice of person is still appropriate.
If you can afford a revocable living trust, consider including a requirement that any successor trustee (the person who manages the trust if you cannot) must have a licensed healthcare manager meet with you periodically to ensure that you are being treated and cared for appropriately.
Finally, don't be penny wise and pound foolish. Before you sign a lease for a new apartment, buy a new home, or sign a contract with a home healthcare agency or assisted living facility, always have it reviewed by an attorney. Sometimes the terms in what appear to be “standard” agreements are unreasonable; addressing them before you sign can ensure that no one is using these contracts to take financial advantage of you.
Insurance—not just health insurance—is a critical part of everyone's safety net. If you own a home or rent an apartment, you need homeowner's and renter's coverage. If you have costly medical equipment or a home health aide, ask your insurance carrier if additional coverage (riders) are available to cover the costs or risks involved. If you drive, obviously you must have auto insurance. (See http://bit.ly/AnvNYC on the dangers of driving for people with certain neurologic conditions.)
Most people never buy a personal excess liability policy (sometimes called an umbrella policy). This provides liability protection over and above the standard and customary amounts included in most homeowner/renter and automobile policies, which can be inadequate if you are sued. A personal excess liability policy can be very important. Let's say you're in an auto accident, and the plaintiff claims you shouldn't have been driving because of your neurologic condition. Whether that's true or not, the allegation could trigger a higher award, one that exceeds the liability coverage in your base policy.
Whether you're an employee or business owner, be sure to review the legal documents that control your ownership or employment with an attorney. If no such documents have been provided to you, request them from your employer. The reason? You want a written agreement about what would happen if you were unable to work for a period of time because of illness or disability. (See http://bit.ly/14uvvVA for more on employment law related to people with neurologic conditions.)
In addition, the typical terms in many business agreements (such as a shareholders' agreement) could leave you at a severe disadvantage. For example, some shareholders' agreements provide that if an owner (shareholder) cannot work for more than 60 days, he or she will be terminated and their stock bought back by the corporation or other shareholders at low value. Let's say you have multiple sclerosis and experience two exacerbations with more than a year between them. You're only out of the office for 30 days each time, during which you work part-time from home. Under a typical shareholders' agreement, your financial interests in the business could be terminated.
Computer technology can be very helpful for people with neurologic conditions. (See http://bit.ly/11TB3TW for more on assistive technology.) But without the proper safety nets, computer use can expose you to risks. Consider taking these steps for protection.
Consider using a check-writing program, such as Quicken. Inexpensive programs like this one can help you record and track your financial information. Even if you only use it to record the checks that you write (instead of paying bills electronically), a check-writing program will come in handy in case of emergency, when someone else might have to pay your bills for a time.
Also, consider automating deposits and payments—if you're willing to be diligent about reviewing the statements. Most employers will deposit paychecks directly into an employee's bank account. If you regularly purchase goods or services from a particular company—for example, your energy provider—ask if they will automatically debit your checking account. These steps will reduce the monthly paperwork you have to do and come in handy if your condition worsens. Fewer transactions mean less opportunity for someone to take advantage of you.
Back up all of your data regularly using one of the many inexpensive cloud-based backup services, such as SugarSync, Mozy, or Carbonite. Every time you add data to your laptop, these services automatically back them up on a secure server. That way if your computer crashes or is stolen, the information isn't lost forever.
You might also consider buying an inexpensive external hard drive and periodically creating a mirror image of your laptop on it. This includes not just the data but also the software, settings, and more. If your laptop is lost or destroyed, you can use the mirror to quickly restore the entire laptop and then access the cloud-based program to update all of your data.
Check out some of the great products available to organize all of your legal, medical, financial, and tax records in one place. One example is CBData (cbdatasystems.com ), which even has a concierge service that will help you with the organization process.
Finally, you can arrange for a trusted friend, family member, or professional adviser to periodically monitor your computer data using common and inexpensive software such as join.me (https://join.me ), gotomypc (https://www.gotomypc.com ), or logmein (https://www.logmein.com ).
All of us will eventually need multiple safety nets. If you start putting them in place now, you and your loved ones will be able to focus on staying healthy and living well, instead of worrying about life's emergencies.
If you found this article useful, check out these other Neurology Now articles on the legal, financial, and insurance-related aspects of managing a neurologic condition.
* The Americans With Disabilities Act: http://bit.ly/18NvXC1
* Emergency Planning: http://bit.ly/16rgi4W
* Financial and Estate Planning: http://bit.ly/MFAmdl
* Financial and Estate Planning Resources: http://bit.ly/130hJoG
* Finding a Home Health Aide: http://bit.ly/1botBbY
* Living Wills and Health Proxies: http://bit.ly/12movd4
* Rejecting Insurance Denials: http://bit.ly/1abvyao
* Revocable Living Trusts: http://bit.ly/WHfyXs