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The Big Five


I call the Core Estate Plan, “The Big Five:” The Will, Health Care Proxy, Advance Directive, HIPAA Release, and Power of Attorney. I recommend that everyone have these documents in place.


What I call the “Plus One,” is the Homestead. I recommend that every homeowner whose primary residence is located in Massachusetts record a Homestead. If the homeowner gets sued, the judgment creditor cannot take the home to satisfy the judgment if the homeowner has recorded a Homestead. It’s a beautiful thing!


On-line at you can look at your deed and see whether or not you have a recorded Homestead.



The Will


The Will is filed in probate court if the person who died, the decedent, left property only in the decedent’s name. In other words, after the decedent’s passing, we have to probate any and all property with no joint owner or named beneficiary; and, the property was not in the name of a trust. Property owned by a trust avoids probate. The decedent’s property includes the home or any other real estate; automobiles; bank accounts; life insurance and retirement accounts if there is no named beneficiary; and, many more types of property.


If the decedent died without a Will, the Law of Intestate Succession directs who shall be given the decedent’s property. I call this law, “the State’s Will.” Probate is filed in the state and county where the decedent resided at the time of death. The State’s Will has some variation from state to state, but is basically a family tree in every state. Charities, step-children, best friends, etc., are left out of the State’s Will.


Whenever a Will can be found after the decedent’s death, the decedent’s Will is used instead of the State’s Will. The testator, the person who signed the Will, directs, not the State, who shall be given the property. In addition, the testator directs who will be in charge. Without a Will, the State’s law directs who will be in charge, again, based upon the family tree.


An important feature of a Will: In the Will, the parent(s) can name the Guardian of their minor children (under the age of 18) if the parent(s) become unable to care for their minor children due to death or disability.



The Health Care Proxy


The person who signs the Health Care Proxy document is called, “the Principal.” The Principal names the Principal’s agents, also called health care proxies, in order, one at a time. A physician invokes the Health Care Proxy by placing a written statement in the patient’s (the Principal’s) medical records stating that the patient is unable to decide or communicate to the healthcare provider the patient’s health care decisions.


Once the Health Care Proxy is invoked, we lawyers say, “the health care proxy job springs alive” and the first-named health care proxy (the agent), on behalf of the patient, decides and communicates to the healthcare provider health care decisions.


The Health Care Proxy avoids an expensive, stressful, and time-consuming probate proceeding called “a Guardianship.” People are often surprised to learn that even a spouse has to petition the probate court to become the guardian of the other spouse if the patient did not sign a Health Care Proxy before the loss of capacity.


It is important for the Principal to choose health care agents who will make decisions the Principal would have made given the medical choices presented. This is what we call, “substituted judgment.” For this reason, it is important that the Principal tell each agent that the agent has been named and state to each agent the Principal’s health care preferences and priorities.


I recommend that the Principal name a primary agent and a contingent agent in case the primary agent is unable to do the job if and when the time comes. If the Principal wishes to name additional agents, fine.


No co-agents are permitted; however, I advise my clients to name agents who will communicate with the other health care agents in an attempt to reach consensus. However, if there is a dispute, the ultimate decider will be the first agent named.


The health care proxy job ends if and when the patient resumes sufficient capacity or passes away.



Advance Directive


An Advance Directive, also referred to as a “Living Will”, is a statement signed by the patient in advance directing end of life choices. This document is advisory only, meaning that, if the patient can no longer make health care decisions, the health care proxy can follow the directions or disregard them given the actual circumstances.


There is no one way to write an Advance Directive. In my Advance Directive document it states that, after the health care proxy has consulted with the patient’s physicians and the health care proxy has determined that the patient is in a terminal state or permanent vegetative state with no reasonable expectation of the patient’s recovery, (as a shorthand, I will call this determination the “terminal state”) the health care proxy decides whether or not to discontinue artificial life support, and/or allow surgeries, other medical procedures, and so on.


In the Advance Directives I prepare, I bold health care proxy intentionally. In Massachusetts, it is illegal for a care provider to follow the directions in an Advance Directive. With rare exception (e.g. criminality, abuse), the care provider must follow the instructions given to the care provider by the health care proxy. In fact, the health care proxy might decide not to “pull the plug” for example, if the health care proxy determines that in that particular situation, the patient would have wanted to continue life support.


For this reason, it is especially important that you carefully choose your health care proxy agents. For example, you do not want to choose someone who will keep you on life support if you want to discontinue life support at a certain point.


Because this is the hardest job of all of the estate planning jobs, I advise my clients to give two gifts to their named health care proxy agents. The most important gift: Have “the Conversation.” Tell each agent what type of medical support you want if you ever enter in a terminal state (described above).


The second gift: Sign an Advance Directive.  There is a great deal of information on the internet. On-line you can find documents, check the box choices, and a slew of documents using labels other than Advance Directive or Living Will. Even though the Advance Directive is advisory only, meaning that the health care proxy is not bound by the patient’s words, having something in writing provides additional support for the health care proxy’s most difficult decision(s).



HIPAA Release


The Health Insurance Portability and Accountability Act of 1996, HIPAA, is a federal law which created national standards protecting sensitive patient health information from being disclosed without the patient’s consent or knowledge. This law is taken very seriously by the entire medical care provider community, including pharmacists, opticians, and nursing homes.


Signing a HIPAA Release allows your Health Care Proxy to access your medical records wherever located. Signing a HIPAA Release at your doctor’s office, for example, only provides consent to release the medical records accessed by your doctor’s office. The HIPAA Release I prepare is not limited to those records, but allows access to medical records under the control of any and all other care providers.


Your Health Care Proxy can only access your medical records if a physician has invoked your Health Care Proxy document. As with all of your medical decisions, unless and until the Proxy is invoked, you are in charge of your medical care and only you have access to your medical records (unless you signed a release allowing your medical records to be given to a named person while you still have sufficient capacity).



Power of Attorney


The person who signs the Power of Attorney is called, “the Principal.” In the Power of Attorney document, the Principal names the Principal’s agent, legally called the Principal’s “Attorney in Fact”, but referred to as the “POA”, the short-hand for Power of Attorney agent. The POA is used if the Principal becomes unable to know what the Principal is signing. In that situation, the POA shows the document to the person needing the Principal’s signature and signs the Principal’s name. I recommend that the Principal name a primary POA and a contingent POA if the primary POA becomes unable to serve. Co-POAs are permitted, but can cause confusion, delays, and, disputes can arise.


The POA avoids an expensive, stressful, and time-consuming probate proceeding called, “a Conservatorship” if the Principal becomes unable to know what the Principal is signing. Yes, even the spouse of a mentally incapacitated person

has to petition to become the Conservator.


Do not add a name to your bank accounts “to pay your bills.” Your POA can pay your bills without being a joint owner on your bank account. Whenever you add a name to your account, you put your money at risk if the person you add files bankruptcy, gets divorced, suffers a judgment or commits theft. I have seen it all. Also, say Mrs. Public has three children (or other beneficiaries, such as three nieces and nephews) and desires to give her money at the time of death to all three beneficiaries. But by adding one of them to her bank account, when she passes away, legally all of the money goes only to the person jointly owning Mrs. Public’s bank account. The other two beneficiaries lose out.


The POA is easy to use. If and when the time comes, the POA takes the original POA document to the bank or to the closing attorney if the home needs to be sold, for example, and the POA signs the Principal’s name on checks and/or the deed.


If the Principal is concerned about a possible misuse of the POA, the Principal can sign a “Springing” POA, requiring one or two independent mental evaluations by medical professionals before the POA can be used. It is called, springing, because lawyers say the POA “springs alive” upon the receipt of the failed mental competency evaluations. I prefer to avoid this requirement because the mental evaluations can be time-consuming; costs money; and, the Principal may have the last “bit” of mental capacity, but is cantankerous and refusing to pay the heating bill in winter. In the last example, the elder protective services agent says, “the elder has the right to be unsafe.”


Without this “springing” requirement, the POA is free to use the document when appropriate. This means the Principal MUST appoint the number one and number two POAs who are, what I call, a Boy Scout or a Girl Scout. What I mean are two critical requirements: The POA will not steal and will take care of business. Regarding the second requirement, I do not want to see the Principal appoint a POA who does not get around to paying the bills, signing important contracts, signing tax returns, etc.

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