The contents of this website provides general information, is not advice and should not be treated as such.  Do not rely on the information on this website as an alternative to legal advice from an attorney and, if you have any specific questions about any legal matter, you should consult your attorney.

Incapacity Is Part of Estate Planning

When many people think about putting in place an estate plan, they often limit their vision to wills, trusts, probate administration, and passing along property and other assets. But your clients’ plan should also include putting in place provisions in case they become incapacitated and cannot manage their medical and financial decisions.

Illness and injury can happen at any age, and we must encourage clients not to wait until the worst happens. The following documents are urgent and necessary for every client, regardless of heath, age, or financial status.

Durable General Power of Attorney

A durable general power of attorney ensures that the person your client names can act on her behalf to manage financial affairs in the event she is unable to do so herself. Clients often think of this document in connection with dementia or care for the elderly, but there are many reasons why a person of any age might need this document. An illness or injury could require long term hospital care, regardless of a client’s age. Having a durable general power of attorney document in place ensures that your client’s financial obligations are met.

Health Care Power of Attorney

Clients should also have a health care power of attorney, allowing another person to make health care decisions should they become incapacitated. A car accident, heart attack, or any of a number of other medical emergencies can befall them that may cause them to be unable to communicate important medical decisions on their own. At some point, someone may need to step in to make critical decisions regarding your client’s well-being, and having a health care power of attorney in place designates that decision maker in advance, avoiding family disagreements and delays at a time when quick and crucial action may be needed. Knowing the person in charge of their medical decisions is someone they trust and have chosen can give both clients and their loved ones some peace of mind.

Living Will

This document is the one clients are often most resistant to discuss. A living will or advance care directive allows clients to express their wishes regarding end-of-life medical treatment. Clients can specify exactly what they want doctors to do in an effort to save or prolong their lives. No one likes to think about these concerns, but putting off the decision only leaves the burden on loved ones at a time when they are under duress. Specifying exactly what they do and don’t want done makes it easier for loved ones, taking away the responsibility of those decisions.

All of these documents can and should be updated on a regular basis. For instance, a client may have very different wishes at age 35 than at 55 or 75. Be sure to revisit these documents with your clients whenever they have a life change. Having these documents ensures peace of mind, both for themselves and for their loved ones.

Living Trust

A revocable living trust can be a good strategy for your client, too. While this powerful tool helps a client’s estate avoid probate (saving time, money and anguish) and provides asset protection for a client’s children in a divorce, it also can protect a client if she is suddenly no longer physically or mentally capable of handling her own affairs.

Without a living trust, if your client holds property in her name and becomes incapacitated, a court typically sets up a guardianship. The guardian would be named by the court, not your client. Many guardians draw fees for their services from your client’s estate. Family members might vie for this position, possibly creating discord among them.

Any contact a court-appointed guardian has with the court creates additional expenses, further siphoning away your client’s resources. Guardians must file annual accountings and reports, requiring even more expenses. Judicial proceedings are generally public record, and your client’s family might be forced to air sensitive information publically.

But a living trust can help avoid all that. If your client creates a trust and names a “successor trustee” in the event of her incapacity, then she avoids having a court appoint a guardian to oversee her assets and stops the unnecessary depletion of her estate by legal fees. She decides how to compensate the successor trustee, as well.

We hope this information was useful to you and helps your clients and their families. If you have a specific case or a question, don’t hesitate to call our office.