When you are devising a plan for aging that ultimately allows for the effective distribution of your legacy to your loved ones, you should cover all your bases. While it is not the most pleasant thing in the world consider, it is quite possible that you could become unable to handle all of your own affairs at some point in time. There are other causes of incapacity, but Alzheimer’s disease alone is enough to make advanced planning absolutely necessary.
Everyone has heard about this disease, but you may be surprised to hear exactly how ubiquitous it has become. According to the Alzheimer’s Association, four out of every 10 people who are 85 years of age and older have contracted this scourge on our nation’s elderly. Of course, Alzheimer’s causes dementia, and people that are experiencing this condition will become unable to handle all of their own affairs eventually.
If you were to do nothing to prepare for the possibility of incapacitation late in your life, the court could be petitioned to appoint a guardian and/or a conservator. A guardian is an individual that would handle your personal decision-making, and a conservator would be a financial representative. It is possible for the same person to serve both of these roles. However, a fiduciary entity like a trust company or a bank could be called upon to act as the conservator.
There is nothing inherently wrong with this process, but some potential drawbacks can enter the picture if a guardianship/conservatorship situation arises. One of them is the fact that everyone in your family may not be on the same page with regard to the choice of conservator and guardian. This can cause acrimony during a time when people should be pulling together in support of one another.
Plus, if the situation winds up in the hands of the court, you would lose control over the decision-making process. If you knew right now that you are going to need someone to handle your personal and financial affairs eventually, you would probably want to be the one that empowers representatives to make decisions on your behalf.
Durable Powers of Attorney
It is possible to take steps in advance to make guardianship and conservatorship proceedings unnecessary. When you are devising your estate plan, you can include legally binding documents called durable powers of attorney. Most people are aware of the fact that a power of attorney is used to name someone else to act on your behalf. A standard power of attorney would no longer be in effect if you were to become incapacitated, but durable powers of attorney do remain active.
With a durable power of attorney for health care, you can name an agent or attorney-in-fact to make medical decisions for you if you ever become unable to make them yourself. Along these lines, you can also include a HIPAA release form. This acronym stands for the Health Insurance Portability and Accountability Act that was passed in 1996. It prevents medical professionals from sharing records with anyone other than the patient unless a release form has been signed.
On the financial side, you could include a durable power of attorney for money management purposes. Once again, you could use the same person to act as the agent for both purposes, or you could name two different individuals or entities. In addition to this, if you are using a revocable living trust as your asset transfer vehicle within your estate plan, you can empower a disability trustee to administer the trust in the event of your incapacitation.
Contact Our Firm!
If you would like to discuss incapacity planning or any other estate planning or elder law matter with a knowledgeable member of our firm, you can schedule a consultation if you give us a call at 586-493-7661.