Health Care Directive and POLSTS

Joe is 45 years old and in good health.  He is about to go into the hospital for a minor procedure and his clinic asks him if he has a health care directive.  What is it and why would Joe need one?

A health care directive is a document that tells your health care workers who should make medical decisions for you if you cannot.  In Joe’s case, he chooses his wife, Jane, to be his health care “agent.”   If there is a mishap with Joe’s surgery , and he is unconscious, Jane will decide, with the doctor’s advice, between various options for Joe’s care.

Because any of us could become unable to make decisions, either temporarily, or permanently, every adult should have a health care directive.  There is no doubt that this document is the single most important estate planning document you can have.

Health Care Directives provide instructions to the person who will make medical decisions on your behalf. They are not just for deciding who will “pull the plug.”  In today’s world of medicine, there are many choices of treatment—some aggressive, others less so.  If Joe is unable to make his own decisions because he is too sick, his health care directive says who will make those decisions, including the decision of where to live.  The instructions contained in a Health Care Directive help Jane to make the kind of medical decisions that Joe would make if he were able.

Fast forward to the future—Joe is now 89 years old and suffering from Stage IV Lymphoma.   What happens when Joe collapses in his apartment?  Jane calls 911 because she is scared, but she knows that Joe would not want to be resuscitated.  What now?   If Joe had worked with his doctor and obtained a POLST (Provider Orders for Life Sustaining Treatment) and that POLST were easily available to the paramedics, those decisions would already be made and the paramedics would know whether to try CPR, or whether to intubate Joe.

POLSTs are provided only by physicians and nurse practitioners and are medical orders to other health care workers.  POLSTs are generally only for people who are approaching life’s end.  They do not replace Health Care Directives, but supplement them.  Like a Health Care Directive, photocopies and faxes of the POLST are valid.  Unlike a Health Care Directive, there is little flexibility in the POLST.  One must be even more careful and deliberate when completing a POLST than completing a Health Care Directive.

There are five sections to the POLST and 3 relate to care:

  • CPR vs. DNR
  • Goals for Treatment—comfort care to limited intervention to full intervention
  • Treatments—choices about use of antibiotics and nutrition/hydration

If there is a 911 situation, and the POLST is readily available for the paramedics, the first responders will follow the instructions of the POLST—at least in Richfield and in Minneapolis, MN.  Any care section not filled out will receive the presumption of aggressive treatment.  First responders will not take the word of a family member or other person that such a document exists—it must be provided.

What is a Trust?

According to Black’s Law Dictionary, a Trust is “A legal entity created by a grantor for the benefit of designated beneficiaries under the laws of the state and the valid trust instrument.” What that means is: think of a trust as a basket that you own. You are the ‘grantor’. The basket holds assets. The basket is the ‘legal entity.’ You use the assets for your own benefit. You are the ‘beneficiary’, and when you die, your assets go to your children; they become the beneficiaries.
So, a Trust has 3 players:

  • the Grantor—the person who owns the assets put into the trust
  • the Trustee—the person who manages the assets for the benefit of the beneficiaries
  • the Beneficiaries—the person(s) who benefit from the assets—either by receiving the income of the trust, or by receiving the assets from the trust.

If I create a trust today, I may put my house, my bank accounts and my investments into my trust. The trust actually owns my assets now, not me directly. I can still do anything I want with my assets—reinvest, sell, or even give them away, but when I do that, I am acting as the ‘trustee’—the person who manages the trust. I am also the beneficiary of my trust—I benefit from the assets of the trust.
Say that tomorrow I suffer a massive stroke, and am unable to manage my finances. I still have my trust, but I cannot be the trustee. That job will fall to my ‘successor trustee.’ That trustee has a job to manage the assets and look after my needs, because while I am no longer the trustee, I am still the beneficiary.
If I succumb to the effects of my stroke and die, I am no longer the beneficiary of my trust—the new beneficiaries will be the people I have named when I created my trust—much like a Will says who will receive probate assets. At this point, the trust will probably terminate.
Trusts may be useful for some people because they allow (if properly created and managed) the owner to avoid probate on death. This is especially useful if real property is owned in more than one state. Trusts also maintain privacy for the family of the deceased person. Before you set up a trust, be sure to talk to an attorney who is working for your best interests. Trusts do great things, but they are not always the best answer.

Do I Need a Will?

A client (single) has beneficiaries on her retirement account, a transfer on death deed on her house, and pay on death notices on her bank accounts, her two kids get along and can amicably split up her belongings—does she also need a Will?  If this client died where all her assets were as just stated, then no, she would not need a Will.  However, like life insurance, a Will can help cover unexpected events, and the difficulties a Will can prevent may well outweigh the cost of preparing a Will.

If you own (or receive) assets that are not assigned through beneficiary then the assets are considered Probate assets.  If the value of all Probate assets is greater than $50,000, then a file with the Probate Court is required. The Will tells the Probate Court how you wish your assets distributed.

I jokingly tell my clients that a Will is for winning the lottery the day before you die.  While this is quite correct, there are other, more likely events that could trigger a probate.   Any funds that are assigned to you but not delivered until after your death, are in your estate.  An example of this is an inheritance.  If you are a beneficiary of a person’s estate, but you die before the distribution of that money takes place, a Will would help the Probate Court know how to distribute the funds.  Another scenario in which your assets may end up in Probate involves beneficiaries on your retirement or other investment accounts.  Sometimes mistakes happen –a beneficiary is not recorded correctly, accounts change and the beneficiary designation does not follow the change.  Fortunately, these are rare events, but they do happen.

Wills can also be the grounding document for your estate plan.  By listing how you want your assets distributed, you can be checking against your Will when assigning beneficiaries.  For example, say you have 5 children, and you want them to each receive 20% of your total estate when you die.  If you have investments that for some reason get distributed to only 3 of your children, you can be sure to create other investments that will be distributed to the remaining 2 children on your death.  The need for a grounding document (Will) increases with the complexity of your estate plan.

But, what if you have a trust?  A major reason for a trust is to avoid Probate.  However, just as in the above scenarios, assets can be outside your trust when you die.  In the case of a Trust, lawyers will draft what is called a “Pour-Over Trust”.  This is a simple will that states that in the event of Probate, the Personal Representative (Executor) is to follow the terms of the trust when distributing the Probate assets.

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