Modifying Estate Planning Documents for Someone Living with Parkinson’s Disease

Introduction to Planning and Drafting Documents for PD

If you have or a loved one have Parkinson’s disease (PD)
every estate planning document, as well as your planning itself (not discussed
extensively in this article) should be modified and tailored to reflect your
current circumstances and likely disease course.

Naming Fiduciaries When Planning for a Client with PD

Guiding a PD client in selecting fiduciaries is generally
similar to the expected planning for any client, with the following special
considerations. PD can be a along term illness lasting many decades. Therefore,
the age of the agent is important, naming sufficient successors is important,
and consideration to using a revocable trust in addition to a durable power of
attorney to provide long term professional management of assets to avoid undue
imposition on a particular agent, or a lack of sufficient successor agents.
Many PD clients reach a stage in the progression of their illness when
executive dysfunction becomes problematic. It will become difficult to balance
bank statements, make significant decisions, and so forth. Therefore, the
provisions to be included in a power and/or revocable trust should be tailored
while the PD client has the ability, to provide structure and guidance to an
agent and successor trustee should this occur.

Since PD is a steadily deteriorating chronic illness,
similar to Alzheimer’s, or Primary Progressive Multiple Sclerosis, an agent
under a durable power, or a successor trustee under a living trust will
generally have knowledge of the pending need to serve as the client’s condition
worsens, and in advance of taking control of the client’s affairs.

Handwriting Issues

Addressing Handwriting Issues

There are a number of common PD symptoms which can make the
PD client’s handwriting difficult to read or illegible. Significantly,
handwriting can vary depending on the course of the client’s PD and even
depending on the time of day relative to the affect of the various PD
medications. Tremors can make writing difficult to read. Bradykinesia can make
writing so slow as to impede a productive signing meeting. In addition,
micrographia is common. This results in the letters written getting smaller and
smaller and closer and closer together. A PD client’s handwriting may be fine
and then as the effectiveness of his or her medications wear off, and prior to
being able to take the next dose, micrographia may set in. Signatures may
change over the course of a long meeting.

Several steps can be take to address these issues:

• Schedule extra time for signing meetings.
• Use special powers of attorney for executing
  documents at a closing. For example, if stock in a family business will be
  sold, to facilitate the closing provide in the stock purchase (or other)
  agreement that the client may be represented by a an agent under a power of
  attorney at the closing and attach the proposed special power as an exhibit to
  the draft documents so that it can be approved in advance. Consider using a
  special power solely for the closing that grants the agent power to due all
  things necessary for the closing only and thereafter lapses.

• Be cognizant of the skepticism the IRS often shows
  to transactions consummated under a power of attorney.

• Create a special affidavit acknowledging the
  variations in the PD client’s handwriting. This could be used to support the
  legitimate signing of documents even if writing is quite different. It may also
  be useful for the PD client to have when signing documents at a bank or other
  location. The affidavit could indicate the PD client’s name, address and other
  identifying information, and then explain the PD symptoms that impact
  handwriting, and how. The affidavit could be signed by the PD client, witnessed
  and notarized at different times to create a single history of the variation in
  signatures.

• If handwriting to execute the many documents
  required by a more complex plan is difficult and a power of attorney is
  utilized, consider having the PD client execute a special power for purposes of
  having a named agent, and perhaps not a beneficiary of the plan, execute the
  documents to implement that one plan. In that special power expressly state
  that the power is being executed to facilitate the execution of documents for
  that transaction solely because of the tremors or bradykinesia of the PD. If
  the IRS were to challenge the transaction at a later date on the basis that the
  client was not competent, the corroboration of competency and the specific
  power used for a specific physical purpose, will differentiate the transaction
  from many of the estate planning transactions challenged by the Service which
  the issue of an agent executing documents is raised.

Power of Attorney

Durable powers of attorney for PD clients should also take
into account the characteristics of PD. The decision whether or not to use a
springing power of attorney warrants special consideration. The problems of
triggering a springing power are common to all clients. If a client is
insistent on a springing power, even a client with a chronic illness, the power
may only have to be triggered once, when the level of incapacity reaches a
point where an agent has to permanently take over. Thus, a springing power is
feasible to use.

As explained above, it may be advantageous for the PD client
to occasionally use an special immediate power to facilitate execution of
documents for particular transactions even though the PD client is competent
and the broad general durable power has not “sprung”.

Compensation provisions should also be tailored to the
circumstances of a PD client. For any client with a chronic illness, an agent
under a durable power may serve for a long period, perhaps decades. Therefore,
it may be appropriate to compensate the agent. Some draftspersons use
references to state law compensation for a trustee as a gauge for calculating
the agent’s compensation.

Given the long term nature of the assistance a PD client
will need, a funded revocable trust should probably be used in addition to
relying on the durable power. In such cases the power should be coordinated
with the trust, especially if different people are named (e.g. a bank or trust
company under the revocable trust and a family member under the power).

Living Wills and Health Care Proxies

Living wills and health care proxies for an PD client will
generally be similar for most clients, but do warrant a few considerations.

The PD client may be competent to handle his or her affairs
so that an agent’s powers under a health care proxy may not be triggered.
However, the presence of bradykenesia, akinesia, or other symptoms, may make it
difficult for the PD client to handle some routine medical matters. Therefore,
preparing a stand alone HIPAA medical release authorizing an agent to receive
medical information, to help the PD client, who continues in control, should be
considered. There may be no need for the PD client to abrogate decision making,
but it might be desirable to permit a spouse, partner or other family member to
monitor medical matters.

The PD client might wish to include an express provision
concerning donating brain tissue samples for PD research efforts. The language
should be specific enough to assure that the donations will be used for PD
research. Even some clients with religious preferences against organ donations
may wish to provide for this. In such cases care should be taken to explicitly
acknowledge that although organ and tissue donations are against the client’s
religious beliefs, they are intentionally permitting the donations of brain
tissue if it can productively be used to advance PD research.

Given the progressive nature of PD, a guardianship
designation should be included in the health care proxy (or a separate guardian
designation prepared). Some state laws expressly permit this. But, at minimum
such a designation provides clear evidence of who the client would want to
serve in such capacity if a later court proceeding were necessary to confirm a
guardian. If a revocable living trust, durable power, and health proxy are all
completed, it may lessen the need for the PD client to ever have to address the
issue of a guardianship.

Last Will

The need for the PD client’s family members to include
special needs trusts (“SNTs”) to protect the PD client will, as for all
clients, vary depending on the circumstances. Many with PD will face
devastating financial burdens making SNTs essential in, for example, a spouse’s
will for a surviving spouse with PD. However, many with PD, although perhaps
less so for those with YOPD, will be diagnosed towards the tail end of their
careers, or even in retirement. Therefore, they will have had relatively full
and often successful careers. Many with PD may continue working for some time
after diagnosis. The typical diagnosis of Parkinson’s which is at ages in the
50s and 60s (other than YOPD which tends to affect those in their 40s) continue
their careers long after diagnosis, although they might require some
accommodations. This contrasts with other chronic illnesses. For example,
Alzheimer’s is typically diagnosed at even older ages and Multiple Sclerosis is
typically diagnosed between the ages of 20-50. At these ages many clients with
PD have savings, long term disability and long term care insurance. For these
PD clients a SNT in a parent’s or spouse’s will may not be warranted. However,
for the YOPD client, whose career is truncated before substantial savings can
be realized, special needs planning may in fact be necessary.

As would be expected, many PD clients with the financial
wherewithal will be interested in providing charitable support to the PD
center, charities, or other programs that provided them assistance and support.
This type of charitable giving should be planned for in a manner that best fits
the PD client’s disease course and family responsibilities.

Revocable Living Trust

Revocable trusts are an obvious technique to assist any
client with a chronic illness to manage assets. However, as with the durable
power of attorney discussed above, there are a few nuances for the PD client.
The typical revocable trust isdrafted
with the grantor as sole trustee. For a client with advanced Parkinson’s it may
not be possible for the PD client to serve even as a co-trustee.In advanced stages, the PD client cannot
process information.However, the PD
client may be best served by a hybrid approach. Naming the PD client as a sole
trustee may prove problematic at some future point, but identifying the point
on the continuum of symptoms and competency issues at which replacement of the
PD client as trustee should occur is not simple. Not naming the PD client as
trustee cedes control from a client who often has the capacity to make
decisions. Relying on a transition to a successor trustee not only creates the
expected issues with triggering the transition (as with a springing power of
attorney), but also, the complete removal of the PD client as trustee may be
unwarranted. A better approach for the
PD client might be to have the PD client and another person or institution as
co-trustees from inception, with either being granted authority to act
independently to take the actions that might be required. The use of an
institutional co-trustee of a fully funded revocable living trust may provide
the PD client the most involvement and control over his or her finances for as
long as possible, without the risks other arrangements may create.