Are Your Legal Affairs in Order?
by: Legal Hotline for Older Iowans
There are a number of reasons why Iowans, and especially elderly Iowans, should periodically review their legal affairs. First, elderly Iowans are at higher risk of becoming frail or infirm. Second, advance planning can reduce the burdens on family and loved ones. Third, it can save time and expense. Lastly, it can increase the amount of money or property you can use or pass on. The issues can be complex and confusing. Some of the more important legal planning issues involve Powers of Attorney, Living Wills, Estate Planning and Medicaid Planning.
Powers of Attorney - Financial and Health Care. Financial and health care powers of attorney are two useful, low-cost tools for handling your affairs if you become disabled.
- Financial Power of Attorney. A financial power of attorney lets you name someone to handle your finances if you need or want help. Many people have their power of attorney take effect when their doctor says they can't make their own decisions, but you can also have it take effect immediately or at a set point in time. Most people want their financial power of attorney to be "durable". This means it will last even if you become completely disabled. It is also very important to name someone you trust. This is because no one typically checks on the person you appoint. Even though you can cancel a power of attorney at any time, you may not know something is wrong until too late. Another option is to ask a court to appoint a conservator to oversee your finances. A conservator appointed by a court must file reports with the court and must ask for permission to do major things like sell your home. Without a financial power of attorney or a voluntary conservatorship, your family or friends might have to hire an attorney and ask a court to appoint a conservator to take care of your finances. This involves time and expense that most people want to avoid.
- Health Care Power of Attorney. A health care power of attorney lets you name someone to make health care decisions for you if you can't make them yourself. For example, if you are unconscious from an accident or illness, the person you name can make treatment decisions for you. Without a health care power of attorney, your doctor will usually consult with your family about health care decisions. If you do not have family or they cannot be reached, a guardianship might be needed. As with a conservatorship, a guardianship requires the time and expense of hiring an attorney and going to court.
Living Wills. A living will is a written document in which you say whether health care providers should withdraw life-sustaining procedures if you are in a terminal condition. For example, you may be in terminal condition if you had a serious accident or stroke, were being kept alive by some kind of mechanical device and had no realistic hope of recovery. If you have a living will, you are effectively deciding whether or not the device should be turned off. Without a living will, family members would usually decide. This can be a problem if your wishes would not be the same as your family or if family members disagree.
Estate Planning. Under Iowa law, you can decide who receives your property by executing a valid will. If you don't have a will, your property will be distributed to your heirs. If you are married, this means your spouse will generally receive all of your property. (There is an exception to this rule if you have children from other marriages.) If you have no spouse, then your property will go to your children. If you have no spouse or children, then your property would go to other relatives.
An important issue is whether your estate must be probated. Estates must generally be probated to transfer property that is held solely in your name. For example, if your home is in your name alone, your estate would have to be probated to transfer the property. Probating an estate can be costly and time-consuming. There are a number of ways to avoid probate. For example, you can make your spouse or other party a joint tenant with right of survivorship on the deed to your home. You can name beneficiaries for your brokerage, IRA accounts and life insurance policies. For bank accounts, you can establish joint or payable-on-death accounts. A trust is another option. Most options have advantages and disadvantages. You may want to consult an attorney before taking any action.
Medicaid Planning for Nursing Home Care. Unless you have enough income, savings or insurance to be able to pay for nursing home care for an indefinite period of time, you may want to consider Medicaid Planning. One important issue is how to become eligible for Medicaid to pay for nursing home care if you have serious health problems. If you are single, you must have less than $2,000 in assets to be eligible. If you are married, your spouse may be able to keep a large amount of your combined income and assets and still qualify for Medicaid.
A second important issue is whether you can give away assets and still qualify for Medicaid for nursing home care. If you give assets away within certain time periods before applying for Medicaid, you may not be eligible when you need it. In addition, the state may try to recover the assets you gave away. Depending on your age, your specific finances, the state of your health and other factors, you may still be able to safely make gifts. The rules for Medicaid Planning are complex. For help with Medicaid Planning issues you should contact an attorney with expertise in this area. You can also contact the Legal Hotline for Older Iowans.
This information is provided by the Legal Hotline for Older Iowans 1-800-992-8161. The Hotline is a project of Iowa Legal Aid that is partially funded by the U.S. Administration on Aging. The Hotline is a free, confidential service for all Iowans 60 or older with questions on non-criminal legal matters.
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