How Do I Plan for Incapacity?

With Alzheimer’s and dementia becoming more and more prevalent these days, more and more clients are asking me how to plan for incapacity in case they develop one of these devastating diseases. In addition, you may have your documents in place to plan for an incapacity, but your parents or other loved ones may need to get them done, especially if there are early signs that one of these diseases is setting in. This blog discusses some planning tips for preparing for incapacity, and it really should be part of every estate plan even if you or a loved one has none of these signs, because none of us knows whether this disease will affect us later in life.

The Good News – You Can Plan For It!

There is good news! In addition to planning for death, well-drafted estate planning documents also plan for incapacity and help you and your family avoid the need for a guardian (i.e., a person appointed by the court to take care of your housing, health care, and personal care needs) or a conservator (i.e., a person appointed by the court to manage your finances for you), and the attorney’s fees and court costs associated with doing so. Moreover, if you or a loved one are starting to slip, it is important to get the documents signed while you still have capacity to sign them.

What Documents Need To Be in Place?

In order to protect you and your family from having to go through a court process to establish a guardian or a conservator, I recommend having four documents in place:

1. Revocable Living Trust. For many clients, this document allows a trustee to take over your finances without court intervention if you or your loved one ever become incapacitated.
2. Durable General Power of Attorney (Financial Power of Attorney). This document allows your financial agent to make financial decisions on your behalf for all assets outside of your trust if you or a loved one become incapacitated. Some clients opt for a more limited financial power of attorney for this type of power of attorney, rather than a broader, general power of attorney.
3. Health Care Power of Attorney. This document allows your health care agent to make medical decisions for you if you can’t make them yourself.
4. Mental Health Care Power of Attorney. This document allows your mental health care agent to make mental health care decisions for you if you can’t make them yourself.

These four documents will govern if you ever become incapacitated. With them, your wishes are clearly spelled out and your family members can act on your wishes and protect you. Without them, a guardian and/or conservator will most likely be required (which effectively means that your family will have to go to court about these issues) if you ever become incapacitated.

A Couple of Other Things to Keep in Mind . . .

With all that said, there are a couple of other things to keep in mind:

1. Don’t try to do these documents yourself. Many clients try to do these documents themselves, thinking that they are no big deal. However, think of what would happen if those documents don’t work. If they don’t work, your family is stuck going to court and spending a lot more in attorney’s fees. The bottom line here is to make sure to go with a trusted estate planning attorney to draft the documents for you.

1. If they are already incapacitated, it’s too late. Finally, you should know that, if you or a loved one are already incapacitated, it’s too late to sign new documents. Sometimes, people call me to ask me if these documents can be drafted after someone is already incapacitated. The short answer is – “It’s too late then.” As a result, make sure your documents are reviewed and/or updated on a regular basis so that these documents are up to date when you need them.

Need help? Please call me today – 602.277.7000

Our firm has helped hundreds of families just like yours handle a wide variety of estate planning, business planning, probate, trust, and elder law issues. When families or business owners are not getting along, we can also handle any disputes and litigation related to their businesses, wills, trusts, guardianships, or conservatorships. Please give me a call, so that I can help you work through these difficult issues with confidence.