Where There's a Will There's a Way

Where There's a Will There's a Way

The Documents That Protect You While You're Still Alive

Introduction

Good evening, everyone, and welcome to Where There's a Will, There's a Way. My name is Jay Marsden, and I'll be your host this evening.

This is the first in what we hope will be an ongoing series of conversations about the intricacies of estate planning topics that have become especially relevant amid everything our community has been navigating during the pandemic. A few weeks ago, I had the pleasure of running into the team here at the station, and they asked whether I'd be willing to come in and share some of the conversations I'd been having with clients to bring that information to a wider audience. That's exactly what we're here to do tonight, and I hope you find it genuinely useful.

If you have questions or want to follow up on anything we discuss, please feel free to reach out to the station, and they'll connect you with someone who can help.

One of The Three Legs of the Stool

As an estate planning and elder law attorney, one of the topics generating the most questions right now is what we call advance directives, which are a set of legal documents that most people don't think about until they urgently need them.

When we talk about advance directives with our clients, we organize the conversation around three distinct areas we call the three legs of the stool. Tonight, we're going to focus on the first and, in many ways, the most important leg: probate while you're alive.

Probate While You're Alive

Most people are familiar with probate in the context of passing away, the legal process of distributing your assets to your heirs after you're gone. But there's a parallel process that can happen while you're still living, and it's one that far too many people aren't prepared for.

Probate while you're alive refers to the legal complications that arise when you become unable to make decisions for yourself, whether due to illness, incapacity, or an unexpected medical event, and you haven't put the right documents in place ahead of time.

Without the proper advance directives, the people who love you cannot legally act on your behalf. They can't access your finances, make medical decisions, or manage your affairs without going to probate court first. And like any court process, that means it's public, it's slow, and it's expensive.

The good news is that with the right documents in place, you can avoid that process entirely. Let's walk through each one.

Document #1:

The Health Care Proxy

A health care proxy is a document that designates someone you trust to make medical decisions on your behalf in the event that you are no longer able to make them yourself. This is arguably the most important document in the entire estate planning toolkit because when it's needed, it's usually needed right now.

What happens without one?

Without a health care proxy, the only path forward is to file a guardianship petition in probate court. Someone — a family member, a friend has to formally ask the court to be appointed as your legal guardian. And here's where things can get complicated.

We see this all the time: the moment there's no clear directive in place, family dynamics that have been dormant for years suddenly surface. People come out of the woodwork. Disputes arise over who should be in charge between children, stepchildren, nieces, and nephews. The court is then left to determine who is best suited to make decisions for you, and that process can be long, contentious, and emotionally exhausting for everyone involved.

On the flip side, sometimes no one steps up. People decide they don't want the responsibility, and you end up in a true void — no one making decisions, no one able to act.

A health care proxy eliminates all of that. It makes your wishes clear, removes you from the court process, and gives your designated person the legal authority to act immediately.

Keep it current

One thing we hear constantly: "Don't worry, Jay, I have a health care proxy. I named my older sister years ago." And then it turns out that my sister is 94 and in a nursing home. Life changes. The people we named years ago may no longer be able to serve in that role or we may no longer want them to. Review your health care proxy periodically to ensure the named person is still the right person, and that you have a backup named as well.

The guardianship process: what you're trying to avoid

If you end up in the guardianship process, here's what it looks like: it's a public court proceeding with formal hearings and required notifications to interested parties. It takes time, often significant time, and sometimes the situation simply cannot wait. If you're in a hospital and decisions need to be made about your discharge, care, or transfer to a rehab facility, but there's no one with legal authority to make those calls, the process comes to a grinding halt. The hospital can't discharge you without direction, and you end up in care limbo until the court acts.

It's expensive. Multiple attorneys often get involved. And every dollar spent on that process is a dollar that could have gone toward your care. A health care proxy costs a fraction of what a guardianship proceeding costs — and it gives you something a court proceeding never can: control over who makes decisions for you.

Document #2:

The HIPAA Authorization Form

The second document on the health care side is the HIPAA authorization form, and it's one that often gets overlooked — even by people who already have a health care proxy.

Here's the key distinction: your health care proxy only activates when a medical professional formally determines that you are no longer capable of making your own decisions. Until that threshold is crossed, your proxy has no legal authority. But there are plenty of situations that fall short of full incapacity where you still need help navigating the medical system.

The HIPAA authorization form fills that gap. It allows you to designate specific individuals, family members, close friends, or a trusted advisor to access your protected health information on your behalf, even while you're still fully capable of making your own decisions.

Why does this matter in practice? Consider how complex medical information has become. You're sitting in a doctor's office, you've just received a difficult diagnosis, and you're overwhelmed. You can't process everything being said. You wish someone else could follow up with the doctor's office, call the insurance company, or speak with the pharmacy on your behalf. Without a HIPAA authorization, they legally cannot do that, regardless of how close they are to you.

With it, they can. They can gather information, coordinate with providers, and help you make informed decisions as a team.

There's also the practical reality of security questions. Anyone who has tried to call an insurance company on behalf of a loved one knows the drill: What street did you grow up on? What was your first pet's name? What was your mother's maiden name? As cognitive challenges become more common with age, these barriers become increasingly difficult to overcome. A HIPAA authorization puts trusted people in a position to help before those barriers become insurmountable.

Document #3:

The Advanced Directive (Living Will)

The third health care document is the advance directive, sometimes called a living will. If the health care proxy names who will make decisions for you, the advance directive tells them what decisions to make.

The advanced directive is essentially a set of written instructions to your health care proxy a statement of your wishes in the event that you are incapacitated and cannot speak for yourself. It typically addresses questions like: Do you want every possible medical intervention pursued? At what point should care shift from aggressive treatment to comfort and dignity? What does a good death look like to you?

These documents are for the people you love

Here's something we tell every client: you already know what you want. You don't need a document to remind yourself. The advanced directive exists for the people who will have to make those decisions for you.

Imagine being named as someone's health care proxy, and the moment arrives when you have to make a decision about end-of-life care. Without guidance, that decision, whatever it is, becomes a weight that a person may carry for the rest of their life. Did I do the right thing? Is this what they would have wanted?

An advanced directive removes that burden. It gives your proxy the gift of certainty. They're not guessing; they're following your instructions. And that clarity is one of the most profound acts of care you can offer the people you love.

A Note on Using These Documents

Having these documents drafted is only part of the equation. You also need to ensure they're accessible when needed.

When a client is admitted to a hospital or care facility, the first thing that facility wants to know is: does this person have their documents in place? Hospitals and nursing homes understand that if something happens and there's no documentation in place, the only resolution is probate court, and they don't want to wait for that any more than you do. Having your documents on file, up to date, and readily available can make the difference between a smooth transition and a prolonged institutional standoff.

We've also been called on frequently during the pandemic to help clients use these documents in real time — not just draft them. The world has changed. Telehealth, video consultations, and remote decision-making — none of these were common considerations in an estate planning document a year ago. We draft our documents with flexibility built in, precisely because we cannot anticipate every situation. But equally important is having an advisor you can call when you need to understand how a document applies to a situation that wasn't anticipated when it was written.

Document #4:

The Durable Power of Attorney

Moving from health care to finances, the fourth critical document is the durable power of attorney and it's the one that gives someone the authority to manage your banking and financial affairs if you become unable to do so yourself.

The word durable is important. A durable power of attorney takes effect when you sign it and remains in effect even if you become incapacitated. This is distinct from a springing power of attorney, which only activates upon incapacity. We typically recommend the durable version, but we'll explain the distinction in a moment.

Why "keys to the kingdom" is not an exaggeration

A well-drafted durable power of attorney is a powerful document. It can authorize your agent to manage bank accounts, handle real estate transactions, access retirement accounts, manage investments, handle insurance policies, pay bills, and more. When we hand someone a power of attorney, we often describe it as handing them the keys to the kingdom because in many ways, that's exactly what it is.

This is why the document needs to be drafted carefully and specifically. Under the law, if an authority is not explicitly granted in the power of attorney, it doesn't exist. That means a generic or poorly drafted document may leave your agent without the tools they need when it matters most.

A practical example: a client comes to us with an old life insurance policy that has no beneficiary listed. With a properly drafted power of attorney, we can use the authority granted in that document to add a beneficiary to that policy potentially keeping it out of the probate estate entirely. Without that specific authority in the document, we're stuck, and the asset may have to go through probate, adding time, cost, and complexity.

The springing power of attorney

Occasionally, clients ask for a springing power of attorney, one that only activates upon incapacity. We understand why: handing someone the ability to manage your finances is a significant decision, and not everyone has someone in their life they completely trust with that level of authority while they're still fully capable.

We typically describe the springing power of attorney as appropriate when your only available agent is someone you'd trust to act on your behalf if you were incapacitated but not someone you'd want in the driver's seat before that point. In most cases, though, the clients we work with have trusted family members or advisors, and the durable power of attorney is the right fit.

What happens without one?

Without a power of attorney, the parallel to guardianship on the financial side is conservatorship, a court-supervised process in which someone petitions the probate court to be appointed to manage your financial affairs. Like guardianship, it requires formal notice to interested parties, legal filings, possible bonding requirements (essentially insurance that must be paid annually for the life of the conservatorship), and ongoing court oversight. It's expensive, time-consuming, and public.

And the practical consequences can be surprisingly mundane as well as significant. Yes, we're talking about accessing retirement accounts to fund long-term care but we're also talking about canceling a cable subscription when someone moves to a care facility. Companies like Verizon or your internet provider won't just take your word for it that you have the authority to close a family member's account. Without documentation, even small administrative tasks become obstacles.

Power of attorney ends at death

One important point: a power of attorney is only valid during someone's lifetime. The moment a person passes away, the power of attorney ceases to be effective, and the agent's authority to act ends. At that point, the role shifts from acting under a power of attorney to acting as executor under the will. Different rules, different authorities, different process. It's important for anyone serving in both roles to understand where one ends and the other begins.

To Summarize

Bringing it all together, what we've covered tonight:

On the health care side, three documents work together to protect you:

• Health care proxy — names who make medical decisions for you
• HIPAA authorization form — allows trusted people to access your medical information
• Advanced directive/living will — tells your proxy what decisions to make

On the financial side:

• Durable power of attorney — names who manage your financial affairs

Together, these four documents form a comprehensive framework for probate while you're alive, protecting you and the people who love you from a process that is slow, expensive, public, and avoidable.

One fine thought to share. We tell our clients this often, and we mean it sincerely: proper estate planning is an act of love.

If something happens to you, the people who care about you will have two choices: they can spend their time sitting with you, holding your hand, focusing on what matters, making the most of the time you have together. Or they can spend that time sitting in bank lobbies, arguing with insurance representatives, and navigating court systems while the clock ticks.

The documents we've described tonight are what make the difference between those two experiences. They are not complicated. They are not expensive relative to the alternative. And they give you something invaluable: the knowledge that the people you love will be protected, guided, and free to focus on what actually matters.

Take the time to get this done. Review what you already have in place. Make sure it reflects your current wishes and the right people. And if you have questions, don't hesitate to reach out. We're here to help.

Thank you so much for joining us tonight. We look forward to seeing you next time on Where There's a Will, There's a Way.

Marsden Law | Estate Planning & Elder Law | www.jmarsdenlaw.com