What is an elder law attorney? An elder law attorney is an attorney that brings together multiple disciplines in the legal field and non-legal fields to deliver senior citizen–taxpayers an array of services that are designed to help them transition from their maturing years to their senior years so that care, security and the ability to age with dignity are maximized — but the cost of care is minimized. Multiple Disciplines Let’s break down that first paragraph into a little bit more detail. The multiple disciplines that an elder law attorney relies on deal with trust and estate law; the laws dealing with guardianship and disability; federal and state taxation law; and the law relating to public benefits both at the state and federal levels. As you can see, this is not the type of law that is practiced directly out of law school. It is necessary for an elder law attorney to master multiple disciplines before he or she can deliver this continuum of services to a client. It takes years to develop the skills. 3 Phases of Life With regard to transitioning from maturing years to senior years, it must be understood that clients’ estate planning needs must deal with the three phases of life. The three phases — which can be further examined with The GAP Illustration Tool© shown on our website — are as follows: Maturing Years, Senior Years, Post-Death Years. In elder law, we are trying to seamlessly provide solutions during your maturing that will carry over into our senior years to accomplish maximum of service delivery and minimization of cost. Finally, in the post-death years, estate, trust and probate administration must be dealt with. Minimization of cost of care With regard to the maximization of services, the elder law attorney needs to understand what tools are available to help clients transition from maturing years to senior years and create strategies and tools that will allow that transitioning to take effect at the minimum possible cost. Factors minimizing cost include the procurement of long-term care insurance through qualified long-term care insurance sales representatives; reliance on self-funding to some extent; and reliance on Medicare, Medicaid, VA benefits or federal tax benefits. One who can master the handling of all of the above disciplines seamlessly can consider himself or herself an elder law attorney. When do you need of an elder law attorney? In order to answer this question, it is necessary to understand this basic fact: During our senior years, the cost of long-term care delivered in intermediate and skilled care facilities can range from $6,500 to $10,000 per month. How do I pay for the cost of care? It is necessary to understand that there are only three ways to pay for the cost of this care: long-term care insurance, out of one’s own pocket, or through the Medicaid program. It also should be noted that the cost of care in independent and assisted living facilities can range from $3,500 to $7,500 per month. Again, this lesser level of care can be paid for in only three ways: long-term care insurance, out of one’s own pocket, or through the Medicaid (and possibly VA benefit programs processes, this option being available only to qualified veterans). Medicaid and VA benefits. Are they available? Since most of our clients don’t have long-term care insurance, that leaves only out-of-pocket expenditures and Medicaid and VA benefits to rely on (with the exception of Medicare, which provides for long-term care during rehabilitation — but only for a maximum of 120 days). With this backdrop in mind, it is useful to remember that both Medicaid and VA benefits are based on need. In other words, there are health, asset and income limitations that must be satisfied before Medicare, Medicaid or VA benefits are allowable. Legal advance planning or not Therefore, before individuals can determine whether it is time for them to apply for needs-based programs such as Medicaid or VA benefits, it is necessary to determine whether these benefits should be applied for with or without legal planning. If there are minimal assets and the health requirements are met, quite often not much legal planning needs to be done to qualify for these care programs. Keep in mind, it is always useful to have advance directives and a will or trust that deals with the disposition of any assets or possessions left after death. Minimal legal planning may be involved. However, if there are any significant assets that exist while seeking to qualify for these needs-based programs, it is essential that there be legal planning before submission of an application for these benefits. Benefits of legal preplanning The type of legal planning that is done prior to application for the benefits can fall into several areas. They can include the creation of an asset protection plan; the revision of traditional estate planning documents to senior estate planning documents; the creation of powers of attorney that have built in to them the authorization for further long-term care planning for senior citizen-taxpayers in the event they are unable to continue planning for themselves; the creation of asset protection tools and strategies; and the implementation of these tools and strategies with subsequent funding of such tools and strategies. Senior estate planning Finally, senior estate planning is completed using documents and legal tools that are quite different from those used in traditional estate planning. It is only with them that applications can be submitted to qualify for any available federal or state governmental benefits. Conclusion So the question of whether you need an elder law attorney or not turns on your understanding of what an elder law attorney does, and then determining whether the attorney you are considering can fulfill all the needs described above. This, of course, is in addition to other needs that space does not permit me to describe in this Elder Law Update. If you want to know what elder law attorneys are continuing to do for their clients and why these clients need them so desperately, please continue to read our column. In future issues, we will describe some of the strategies and benefits that we can create and have created for our senior citizen-taxpayers clients.

• How does it fit into your senior estate planning and elder law needs?
• How does it fit into your asset protection for long-term care?
• Comments on the new law and forms

Introduction. In 2011 the Illinois legislature created major changes to the power of attorney act and these changes took effect on July 1, 2011. There are two types of powers of attorney – healthcare and property. Both types of powers of attorney are written instructions that enable you to transfer decision-making authority from you (the principal) to a family member or friend, the agent under particular circumstances. Healthcare powers cover medical decisions both during life and an end of life, as well as decisions about housing arrangements food, etc. Property powers are about money, payment of bills, real estate, asset protection, investments and tax matters. Powers of attorney are very important because when they are drafted properly they are an alternative to adult guardianship proceedings. We have been able to utilize these documents since 1987, and they are very important because they are an alternative to guardianship proceeding. Powers of attorney can survive periods of disability; that is why they are referred to as “durable” powers. There are many new changes to the powers of attorney starting July 1, 2011. Where do powers of attorney fit in your “Senior” Estate Planning? Powers of attorney for both health care and property are probably the single most important estate plan documents you can have. Without powers of attorney there is no one who can act for you in health or property related matters without obtaining a guardianship, which requires a hearing in the probate court. Guardianship is expensive, time-consuming, and can often be avoided. Our recommendation is that the Healthcare Power be the base document for your healthcare decisions, while the Property Power should allow for the creation of further senior estate plan documents and long-term care planning strategies. How do powers of attorney help with Asset Protection Planning for Long-Term Care? Without powers of attorney for property is sometimes very difficult to accomplish repositioning and transfers of assets that qualify seniors for available governmental benefits, Medicaid, VA benefits and other related areas. While power of attorney has many components, the gifting power in a power of attorney for property is probably the single most power powerful tool that can be added to the power of attorney. However as powerful as this tool is it can be a source of abuse if not adequately described, administered, and monitored. But not make no mistake about it without the ability transfer assets, it is impossible to accomplish many asset protection measures for long-term care in our senior years. Elder law attorneys differ from estate planning attorneys in the types of powers of attorney that they draft. While both attorneys used powers of attorney for property and healthcare, is the elder law attorneys that insert additional special provisions that will allow repositioning of assets, qualification for governmental benefits, and outright gifting to accomplish Medicaid and VA qualification. If long-term care is a concern for you as you move from your maturing years to your senior years, then you and your loved ones should seek out an elder law attorney to prepare a power of attorney that not only meets the requirements of the 2011 Act, but also goes beyond the requirements and creates flexibility and power that will allow you qualification for governmental benefits and eligibility for long-term care. Comments on the new law and forms-New changes for both the property and health power In General. There are some changes in the new act that affect both the power of attorney for healthcare and the power of attorney for property. The body of the forms has been changed somewhat and penalties have increased and expanded for agents who cause harm to the principal they have been asked to protect. New forms have been created for agents to accept the authority that is been given to them by the principal. Guidance has also been provided about powers of attorney created and executed prior to the new law. There are also directions about what happens when non-statutory powers are executed, as well as powers executed outside of the state of Illinois and how under limited circumstances co-agents can make decisions in non-statutory powers of attorney. Some of the new changes affect both the healthcare and property power of attorney and there are new definitions. No Duty to Act. As under the prior Illinois power of attorney law, a nominated agent has no duty to act. However, the new power of attorney act indicates that if the agent does act, the new standard of care requires that the agent act in good faith for the benefit of the principal using due care competence and diligence. Keep records. The new law requires that an agent is required to keep a record of all receipts, disbursements and significant actions that he or she takes on behalf of the principal. The agent shall make copies of these records available to certain important persons including the principal, guardians and other fiduciaries of the principal, even after the death of the principal. In Court. The new law provides that any proceeding regarding the power of attorney should be filed in the county where a Guardian is appointed, or if there is no Guardian, then filing should be in the county where the agent or principal resides or where the principal owns real estate. The new act provides that upon the appropriate court petition, if the court makes a finding that the principal lacks either the capacity to control or the capacity to revoke the agency, then the court may construe the power of attorney, review the agent’s conduct and grant appropriate relief if necessary. There is a list in the statute of interested persons who may bring such a petition. Damages. There are new rules that allow the assessment of damages against the agent individually and the damages can include the amount necessary to restore the value of the principal’s property to where it would have been if the agent did not commit a violation. New Acceptance of Office Form. In the new 2011 power of attorney law, there also is a new form that is the agent’s certification and acceptance of authority. This is available so that third parties working with the agent can have the agent provide this form to establish the authenticity of the power of attorney and also to establish that the agent has agreed to undertake the duties set forth under the power of attorney. Agent Liability. The new law provides a provision for the agent’s liability. An agent is not liable for the bad acts of a prior agent unless he or she participates in such an act or hides it from disclosure to the principal. An agent who is aware of a breach or imminent breach must notify the principal. If the principal is incapacitated, the agent must take other action to safeguard the principal’s best interests. Co- Agents? The concept of co-agents always has been a problem under Illinois law for powers of attorney. Co-agents are again prohibited under the 2011 law. Appointment of co-agents causes the power of attorney to be deemed in the non-statutory form rather than the statutory power of attorney category. There are some rules for situations where despite the prohibition, co-agents exist. Statutory and Non–Statutory Forms. As under the prior Illinois power of attorney act, a principal does not have to create a power of attorney that is a statutory power of attorney. Rather, the principal may create a non-statutory power of attorney. It is my opinion that the statutory short form is more readily recognize and therefore more useful. However, non-statutory powers often are executed, and when they are, they must have four (4) minimum requirements: • the power of attorney must be executed by the principal, • the power must designate the agent and the agents powers, • the power must be signed by at least one witness to the principal signature, and • the power must indicate that the principal has acknowledged his or her signature before a notary. In order for the power to be a statutory power, it must contain the following: • notice to the individual signing the document, • the statutory short form itself, • the notice to the agent, and • a notarized form of acknowledgment. Other States POA’s. The new act tries to create some validity to powers of attorney that were executed before the new act or are executed outside of the state of Illinois. Generally speaking, if the power of attorney complies with the law where it was executed, or if it complies with Illinois law, or the law where the principal is domiciled, or if it complies with the law where the agent is domiciled, it is valid and Illinois. Specific provisions relating to the “Property” power of attorney. In General. Under the new power of attorney act of 2011, the explanation of powers that used to be attached to the form is no longer required to be attached. It is instead incorporated by reference to those rules. 3 Parts. The new property power has three major parts: • notice to the individual signing the document, • the body of the form, and • the instructions to the agent. There are also new requirements regarding the size of the font, making it easier for the elderly person to read. The notice to the principal must meet these requirements and there is a place for the principal to initial that he or she received the notice. If the principal does not initial the notice, however, it does not invalidate the document. There are also some requirements for bold formatting. Powers. Principals have the ability to add and restrict the agent’s powers. As in the prior law, gifts from the principal’s estate are prohibited unless the principal grants the authority for the agent to make them. Specificity should be provided with the type and amount of gift in order to make this revision more useful. Compensation. As in prior law, there is a provision for compensation for the agent for his or her time and reimbursement of outside costs. Successor Agents. There is a provision in the new law for appointment of successor agents, just as there were in prior law. Witnesses. One new provision worth noting is that the list of people who are not qualified to act as a witness on the power is now built into the witness attestation clause. Under the new law the following people cannot witness: • the attending physician or mental health service provider, or a relative of the physician or provider, • the owner or operator or relative of the owner or operator of a healthcare facility in which the principal is a resident, or, • a parent, sibling, descendant or any spouse of such parent, sibling or descendant of either the principal or any agent or successor agent under the caregiving power whether such relationship is by blood, marriage or adoption; or an agent or successor agent under the foregoing power of attorney. In the case of the healthcare power of attorney, the term “healthcare facility operator” extends to directors and executive officers of an operator that is a corporate entity but not to other employees of the operator. In the case of a power of attorney for property, only the owner or operator, or relative of the owner or operator is prohibited from witnessing. Preparer Info. The new provision requires that the preparer of the power of attorney must disclose his or her name, address and telephone number. Notice to Agent. Finally, with regard to the property agent, there is a notice to the property agent. It contains a list of directives and restrictions. The “Healthcare” power of attorney In General. The healthcare power of attorney is a set of instructions were the principal transfers decision-making authority to an agent. The healthcare power of attorney has instructions about day-to-day personal care and end-of-life medical decisions. There are also provisions that can be inserted about anatomical gifts, autopsy and disposition of remains. Definitions. There are a number of definitions in the healthcare power. New in the 2011 act are definitions created for the terms incurable or irreversible condition, permanent unconsciousness, and terminal condition. We discuss this below. 2 Parts. There are two major parts to the statutory short form of healthcare power of attorney: the notice to the individual signing the document and the body of the document. It lacks a notice to healthcare agent (that the property power of attorney has for the property agent). This is a stark departure between the two powers of attorney. Combined Powers. The new law allows that the two powers, property and healthcare, can be combined into one document. This is not recommended however, because, the document will be very voluminous and disclose certain information to certain providers that are irrelevant. Successor Agents. The new healthcare power also provides for the principal to appoint successor agents. Acceptance of Office. Certifications of acceptance of authority documents are included in the healthcare power as well. Body Part Gifts. Anatomical gifts are authorized but if the principal does not select one of the three choices, the presumption is that no anatomical gifts are authorized. HIPPA Weighs In. The Health Insurance Portability and Accountability Act of 1996 (HIPAA) is incorporated specifically into the new healthcare power of attorney of 2011. The agent under the healthcare power of attorney is deemed to be the personal representative for HIPAA purposes to allow immediate access to medical records after the power of attorney for healthcare is executed. This applies even if the agent’s powers are springing, meaning they begin at a date later than the execution date. End of Life Decisions. Under the 2011 act end of life directives are addressed as in the prior law. The first directive is unchanged and retains the benefits versus burdens analysis. That provision indicates that the agent will not prolong the life of the principal if the benefits of the treatment are outweighed by the burdens of the treatment. This gives the agent broadest authority. The second directive provides evaluations for the agent to take under consideration prior to making the decision to disconnect. These evaluations include permanent unconsciousness, incurable or irreversible condition and terminal condition. These are defined terms in the act. The third directive is to prolong the principal’s life, in accordance with “reasonable medical standards”. End and Begin. Under the 2011 act the healthcare agent’s powers end at the death of the principal. Unless otherwise provided, the agent’s powers begin on execution. Execution. With regard to execution, one witness is required for the healthcare power of attorney.  the law provides a list of people who cannot act as witness, as discussed earlier. Preparer. The name and address of the person that has prepared the healthcare power of attorney is optional. Statutory and Non- Statutory Forms. As with the power of attorney for property, individuals do not have to use the statutory form.  You can use the non-statutory healthcare form.  Requirements for the non-statutory form as as follows:

• It must be executed by the principal,
• It must designate the agent and the agent’s powers, and
• It requires the signature of witness.

Keep Records. Like the property power, the agent under a health power should maintain records of doctor’s appointments, dates, diagnoses, and related issues. Conclusion Changes to the power of attorney act were in response to what was perceived by some as financial exploitation of the elderly in an attempt to close loopholes. Improvements have been made. However, the circumstances are not perfect. For instance, nominated agents are still not required to act. If an agent chooses to act, he or she must do so in a way in that is competent and capable. We hope that the result of this act will be that more people understand and obtain powers of attorney.