Article -- "Protective Legal Strategies for Persons with Huntington’s Disease"
[November 7, 2005]
Donald N. Freedman

(This article is based on a talk Don Freedman gave at an educational conference of the Huntington’s Disease Society of America-Northeast Region, in Tewksbury, Massachusetts, on November 5, 2005.)

PREFACE

Since this article may be read by persons some of whom may have limited or no familiarity with Huntington’s Disease, I will begin with some basic information (from printed materials of the National Huntington’s Disease Society of America) on the disease, so that readers will be better able to apply my observations to other contexts.

Huntington’s Disease is an inherited progressively degenerative brain disorder resulting in loss of both certain mental faculties and physical control. It is caused by a mutated gene. Every child of a parent with Huntington’s Disease has a 50-50 chance of inheriting the gene and coming down with the disease. Testing for the gene is very accurate. Thus, in light of family history, the risk if not the uncertainty of the disease is often known well in advance of the onset of symptoms.

Symptoms sometimes arise in childhood, but most often between 30-50 years of age and progress over a 10-25 year period. Symptoms vary among individuals but may include: depression, personality changes, mood swings, forgetfulness, impaired judgment, unsteady gait, involuntary movements, slurred speech, “intoxicated” demeanor and difficulty swallowing. Ultimately, the weakened individual succumbs to pneumonia, heart failure or other complications.

These physical, cognitive and emotional factors can plainly have an adverse effect on the capacity of any individual to make and communicate decisions about important matters in his life, as well as the capacity for work and for the performance of all activities of daily living.

At some point in the progression of the disease, it becomes clear that the individual is no longer able to make or communicate important life decisions. On the other hand, there is a period at the beginning of the disease during which it is clear that the individual is still able to make decisions.

Many people have observed that it can be particularly difficult with Huntington’s Disease to assess competency during the months or years during which it is not “clear” that the individual either can or cannot make decisions for himself. This is due in part to the variable ways that symptoms may progress. People for whom more subtle cognitive/emotional aspects of the disease predominate in the early years may often seem fine and pass as competent, even though their capacity is in fact quite impaired. People in this group may be better able to communicate than to make decisions. On the other hand, people whose motor problems predominate early may still have a high degree of cognitive function and emotional control, but be perceived, because their communication is slow and less effective, to be incompetent. For these people, the problem is less on making than on communicating their decisions. Professional assessment of capacity by a neurologist, psychiatrist or psychologist trained and experienced in Huntington’s Disease may be essential to determining competency.


DISABILITY LAW AND HUNTINGTON'S DISEASE

The field of disability law covers a huge range of topics. The field includes a broad and varied array of special rights, protections and benefits that apply under federal and state law to people with a disability of some kind and some degree.

Important legal rights relate to entitlement to assistance from government benefit programs, including income maintenance under Social Security Disability and Supplemental Security Income and medical benefits under Medicare and Medicaid.

Other rights offer protection to persons with disabilities in the workplace, such as the right to reasonable accommodation for qualified handicapped individuals under the Americans with Disabilities Act, and the right to continuation of work-related health insurance under COBRA.

Legal rights also arise out of private contractual requirements, such as those in a health insurance policy or employer manual.

Most disability law issues affect people with Huntington’s Disease and other disabilities in similar ways, although some have particular resonance for Huntington’s Disease, for example, with respect to legal and ethical issues involved with genetic testing and access to health care information and protection of health care privacy under HIPPA.

A very important class of rights relates to the legal protection of persons lacking the capacity to protect themselves, including the right to decide, in advance of incapacity, by whom and under what guidance decisions are to be made about one’s legal and financial affairs (through a durable power of attorney) and about one’s medical care (through a health care proxy and medical directive), if one becomes incapacitated in the future.

Of all these aspects of disability law, I will focus now on certain legal actions, which I would advise the individual with Huntington’s Disease to take, in order to protect himself and his family when the disease (or the risk of the disease) is first medically confirmed. This is the crucial time for early and effective legal intervention, when the individual hopefully still has the capacity to plan for the future when he may have insufficient income and resources to provide for his health care needs, and when he will likely be unable to make important life decisions on his own.

Concerning such early legal actions, I would begin by noting that a very personal right that we all hold dear is the right to make decisions about our lives, including decisions about medical care. Without preparation, this right becomes meaningless with loss of capacity. But with preparation, we have the ability to project or extend that right into a foreseeable future in which we are not capable of making or communicating decisions about our care – including decisions about withholding or withdrawing life-sustaining care at end-of-life.


THE HEALTH CARE PROXY AND MEDICAL DIRECTIVE

That preparation first involves understanding and executing a legal instrument by which a competent adult may name and authorize another to make medical decisions for him, if and when he is unable to do so in the future. In Massachusetts, such an instrument is called a Health Care Proxy; the person named is the Health Care Agent. The agent is not authorized to act as of the time of signing, however, but only if and when a physician has determined that the individual is incapable of “making or communicating” decisions about his medical treatment, including decisions about withholding or withdrawing treatment at end of life.

Whereas in Massachusetts the agent can act based on incapacity EITHER to make OR to communicate medical decisions, some state’s laws require mental incapacity specifically before the agent can act. This can be a real problem in the Huntington’s Disease context, as I understand it, since at an early stage in the disease it is not uncommon for the individual to have good cognition, but lack the instrumental function or physical capacity to communicate in an effective and/or timely manner. If your state law is more focused on mental incapacity, you may consider including a statement in your Health Care Proxy setting out your concern in this regard. Then, your doctors may be more willing to act based on their conclusion that you are unable to communicate medical decisions, even if they remain uncertain about your ability to MAKE decisions.

Such statements of intent and instruction are appropriate for a health care proxy, because the law requires, to the extent possible, that the agent make medical decisions in accordance with your preferences under the circumstances. For that to occur, the agent must know your preferences.

In no area is the potential problem of unknown preferences greater than at end-of-life. You need to tell the agent your preferences about withholding or withdrawing life-sustaining care. Since much time may elapse between any such conversation and the time of making such a decision, it is certainly best to communicate such preferences in writing – living will or medical directive.

Also, people with Huntington’s Disease may be invited to participate in observational and therapeutic trials of experimental medications and treatments. Sometimes, the individual may have a chance of benefiting from the trial; sometimes, not. For example, many studies involve a certain portion of participants receiving a placebo rather than the experimental medication at all. Others are focused on collecting data on many people, that will not likely be of benefit to any of them individually. A competent adult has the legal right to decide whether or not to participate in any such study. He can give, or withhold, informed consent. He can decide that a 1:100 possibility of benefit is worth the risk, or not. Even if there is no possibility of benefit to himself, he may choose to participate, altruistically for the benefit of others, or choose not to participate. But what if the individual is not competent to decide? It is not clear as a legal matter, at least to me, that the Health Care Agent has the legal authority to consent to participation in therapeutic trials, at least where there is not a significant possibility to benefit to the individual. Therefore, if you have strong feelings, one way or the other, about wanting to participate in therapeutic trials in the future, then you should include guidance on this in or with your Health Care Proxy.

Whom should you choose as Health Care Agent? No one has a right to be named. I suppose most married people name the spouse, except if his or her mental or physical condition would limit the ability to review medical records, talk with doctors, participate actively in medical planning meetings, monitor health care providers, and so forth. If the spouse is inappropriate, most people with children name a child. Consider, however, proximity, availability, sensitivity and comfort level dealing with medical matters, the nature of your relationship with the child, and the child’s ability to make and stick to what may be very hard decisions (such as that to terminate life supports at end of life). Others choose a sibling or close friend.


THE DURABLE POWER OF ATTORNEY

Just as a health care proxy has the effect of extending your control over life decisions into the future on medical matters, so a Durable Power of Attorney has the effect of extending your control over legal and financial matters into a future in which you may not be able to make such decisions yourself, usually without need for guardianship or involvement of the courts. The person signing the Durable Power of Attorney is called the principal; the person named is the attorney-in-fact.

Whom do you choose as attorney-in-fact? Considerations similar to those with a Health Care Proxy apply, although the set of skills and sensitivities required is oriented toward legal, financial, benefits, investment, and estate planning considerations. Also, consider whether the person you would name has any potential legal, financial, marital, or business problems of his own that could interfere with his handling of your financial affairs for you, or expose your assets and income to his creditors.

What powers do you grant? There is no form or “boilerplate” set of powers that is right for every circumstance. Certainly some powers are common to most people and thus most instruments, but in the disability context we usually advise the client to include many that are not. For example, we will often recommend provisions that deal with government benefit programs (including Medicaid for long-term care), health insurance, long-term disability insurance, IRA’s and other tax-deferred investments.

Whether to include the power to make gifts or transfers on your behalf will often be an important decision. While potentially desirable for Medicaid planning purposes, such a power, if not carefully worded, can be misused by an agent with authority to transfer assets to himself and can also result in your assets being reached by the agent’s creditors.


EARLY PLANNING FOR HEALTH CARE FINANCING

Aside from health care proxies and durable powers of attorney, the other area of preparation involves finances, particularly in relation to health care. Unless personal resources are adequate to pay for care privately, it is critical that you begin to plan as much in advance of need as possible for government assistance with income maintenance and for financial assistance with medical care.

Understand the limitations of Medicare with respect to the financing of long-term care, in home- and community-based programs, in alternative living arrangements like assisted living, and in nursing homes.

Understand the Medicaid program in your state, but with respect to potential services and also eligibility requirements, which pertain to age; clinical criteria (with respect to disability, medical need, deficiencies in ability to manage activities of daily living); and financial status (with respect to assets, income, past transfers, and interests in trusts and annuities).

You need also to understand the special protections available in your state for the “community spouse” (where the other is in a nursing home); to minor or disabled children; to a child who has lived in your home and provided care prior to nursing home placement; to certain siblings with whom you share property interests, as specified in the Medicaid program in your state.

Many (although not all) actions that can be effective in helping to establish Medicaid eligibility, such as transfers, must usually be taken long in advance of need, because of the waiting or penalty periods that may apply.
Planning for future health care needs involves a moving target in many ways. The course of the disease varies, as will responsiveness to current and possible future treatments. Your personal and financial circumstances and those of the family will change. Certainly the law will change.

To provide a concrete current example of the reality that the law seems always to be in flux, note that at the time of this talk the US House and Senate are debating alternative ways to limit Medicaid eligibility. For example, under current law, the state can look back for three years from the time of application to determine whether many types of transfers should affect eligibility. Under the House proposal, the look-back period would be extended to five years, and a more punitive methodology would be used to determine the impact of any transfers within that period.

Opportunities for protective planning will in any event remain. For example, with married couples, one of whom has Huntington’s Disease it is always necessary to plan for the possibility that the spouse without the disease will be the first to die. Think about what would happen, financially, if your estate plan is built on the common components of (1) a “sweetheart will” where you each leave everything to the surviving spouse, joint ownership, and designation of the spouse as beneficiary under life insurance and retirement assets. In such circumstances, if it happens that the spouse without the disease happens to die first, all assets would end up in the name of the ill spouse, where they would be completely exposed to loss through spend-down in the event of long-term nursing home placement.

In the alternative, you may want to consult with an attorney about the appropriateness for you of a strategy based on re-titling ownership of assets so that most if not all are in the name of the well spouse, and on a change your wills so that, instead of leaving everything outright to the surviving spouse, you leave all (or a portion) IN TRUST for the benefit of the surviving spouse. This approach is intended to take advantage of a Medicaid provision under which a trust established and funded by will is NOT considered an asset of the surviving spouse, and need not be spent down on care before Medicaid eligibility is established. This is not, however, an appropriate strategy for everyone. Discuss with your lawyer whether this would be an appropriate for you.

Another example of financial planning that is most effective in advance of medical need relates to IRA’s, 401k’s and other retirement accounts, which have in recent years come to compose a larger and larger fraction of individual and family assets. Certainly don’t take any specific action based on these general observations without consulting with a qualified tax advisor, but let me note that, generally, if your estate still contains substantial tax-deferred accounts at the time of nursing home placement, you may well have a problem. While the Medicaid law permits transfer of assets from the ill spouse to the well spouse (and certain others) without Medicaid penalty, a transfer of an IRA or 401k account is a “taxable distribution” for IRS purposes. That means that the entire amount of the transfer is considered as taxable ordinary income in the year of the transfer. The transfer may have “saved” the assets for Medicaid purposes, but exposed them to income tax at very high marginal rates – maybe a total of 40% taking both state and federal taxes into account.

The problem just described might have been less severe if distributions had been taken over a number of years in advance of nursing home placement. Distributions would still have been taxable, but with less money taken out each year, potentially at much lower income tax rates.

Also, it is still possible to plan, well in advance, for the protection of the principal residence, which often is the family’s most important and valuable single asset. Transfers with a retained life estate may, in some financial and family circumstances, be an appropriate step to consider. Trusts, including irrevocable income-only trusts, are still a possibility, although the Medicaid rules are very particular in this regard.

In considering any transfer strategy, take into account not only the potential effectiveness of the approach from a Medicaid perspective, but also the impact of the transfer on the extent of your control over and access to your resources. Also, be realistic in assessing the risks to the resources now to be held, as a result of the transfers, by other family members. Good intentions aside, children may encounter personal, marital, legal, or financial problems of their own, which may undercut their ability to hold and use the resources for you if needed, as typically intended. Therefore, with any transfer plan, you must also have a fall-back plan to deal with reasonably anticipated circumstances in case transferred assets are not available for any reason.


CONCLUSION

What I would stress overall about planning to deal with future health care needs is the importance of planning early, and of reviewing your plan with your attorney periodically to determine whether you need to accommodate any changes in your own personal and financial circumstances, the circumstances of members of your family, or in the law.

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