Are people in comas really brain dead? - Why you should talk with your healthcare agent

In a recent article Reuters' article, "Vegetative patient "talks" using brain waves" Kate Kelland writes,

British and Belgian researchers used a brain scanner called functional magnetic resonance imaging to show the man, who suffered a severe traumatic brain injury in a road accident in 2003, was able to think "yes" or "no" answers to questions by wilfully changing his brain activity.

This story follows closely on the heels of another recent article by CNN's Mark Tutton, "Trapped 'coma' man: How was he misdiagnosed?" which reported how a Belgian car crash victim was misdiagnosed as being in a vegetative state for 23 years, when he was actually conscious the whole time.

These two articles highlight the need for those executing healthcare powers of attorney to have thorough conversations with their healthcare agents regarding the type of care and treatment decisions the healthcare agents should pursue if called upon to act.

Many state legislatures, including North Carolina's, have created statutory forms for healthcare powers of attorney and living wills.  While these forms convey the necessary legal authority, most are silent when it comes to communicating the principal's (the person on whose behalf the agent acts), wishes and desires.

Every person executing a healthcare power of attorney or a living will should discuss the following scenarios with their agent:

  • If you are in a coma or persistent vegetative state
  • Near death and in a coma with a small, but uncertain, chance of regaining higher mental function
  • Terminal illness with weeks to live, but sometimes seem awake and seem to have feelings
  • Brain damage or brain disease that, while not life threatening, is irreversible, but makes you unable to think or have feelings
  • Other situations that come to mind

In these situations, should your healthcare agent:

  • Treat aggressively
  • Attempt to cure but re-evaluate frequently
  • Limit treatment to less invasive/less burdensome treatment
  • Provide comfort care only
  • Other

Only by making their wishes clearly known to their healthcare agent, can someone insure that their wishes are clearly understood and honored. 

Is your 529 plan safe from creditors?

North Carolina law exempts contributions to 529 plans from the reach of creditors. Recently a bankruptcy court called 529 plan exemptions into question, ruling that a grandparent's $40,000 contribution to a 529 plan owned by their child could be seized by the child's creditors in bankruptcy. 

In In re Bourguignon (.pdf), the debtor's mother contributed 40k to the 529 plan the debtor set up for the debtor's kids about two weeks prior to the debtor filing bankruptcy. The entire 40k was reached by the bankruptcy court and used to pay the debtor's creditors, leaving NO MONEY to pay for college!

As the court noted, it is the timing, not the source of the funds that determines whether it is property of the estate. The Bourguignon court explains why 529 plans enjoy only limited protection under bankruptcy law. Note the court's analysis is under 11 USC 541, which is property of the estate, not the exemptions and opt out provisions under 11 USC 522.

North Carolina is known as an "opt-out" state, which means North Carolina residents who file bankruptcy must use the exemptions provided by North Carolina law, not the federal bankruptcy exemptions. Under North Carolina law, only $25,000.00 of a 529 plan are exempt from the account owner's creditors. No amounts placed in a 529 plan within the 12 months preceding bankruptcy are exempt.

The asset protection issue could be solved simply by having a trust or llc be the account owner of the 529 plan. Where there are actual or anticipated large gifts to a 529 plan, it would be wise to set up a trust or llc to protect all funds within the 529 plan from creditors, not just the amounts protected under the Bankruptcy Code and North Carolina law.