Incapacity planning is an important part of a comprehensive estate plan. People often equate estate planning to the transfer of financial assets, but there is more to it than that.
If you think about it logically, people do not ordinarily pass away while they are still fully capable. A significant percentage of individuals become unable to make their own decisions for a period of time before they pass away.
There are various different causes of incapacity, but one very ubiquitous cause is Alzheimer’s disease. According to the Alzheimer’s Association, one out of every eight senior citizens has Alzheimer’s disease. As you get older, the likelihood of contracting Alzheimer’s disease increases.
In the geriatric community people who are at least 85 years of age are referred to as the “oldest old.” Approximately 45% of people in this age group are Alzheimer’s sufferers.
If you are thinking that it is unlikely that you will ever live beyond the age of 85 you should understand the facts. According to the United States Census Bureau the 10 year age group between 85 and 94 grew faster than any other between 2000 and 2010.
Incapacity planning involves the execution of legally binding documents called durable powers of attorney. With these legal devices you appoint attorneys-in-fact who are empowered to make medical and financial decisions in your behalf in the event of your incapacitation.
If you want to you can have one person act as your medical decision-maker while a different person manages your financial affairs.
The execution of durable powers of attorney will allow you and your family to avoid a guardianship proceedings should you become incapacitated at some point in time. If you are no longer able to make your own decisions the court can be petitioned to appoint a guardian to act in your behalf.
This can be a difficult proceeding. It can be time-consuming, and this is part of the problem. In addition, everyone in your family may not agree on all of the details. Some may claim that you are not really incapacitated.
Even if they all agree that you are incapacitated they may have differing ideas with regard to whom the guardian should be.
You can avoid all of this by executing durable powers of attorney.
Guardianship is also relevant to parents of young children. When you are drawing up a last will as the parent of a dependent child you can nominate a potential guardian.
This would be the person that you would want to see caring for your children if both parents were to pass away.
It is also possible to nominate your own guardian, but you are needlessly involving the court if you go this route. Without question, the execution of durable powers of attorney is a much more efficient course of action.
- Estate Planning for Millennials: The Right Time Is Now - February 20, 2024
- VA Veterans Pension: A Guide for Seniors and Disabled Wartime Veterans - February 1, 2024
- Navigating the Crossroads: Estate Planning After Divorce - January 16, 2024