Estate planning should be viewed as a comprehensive endeavor. Yes, you want to make sure that you facilitate efficient asset transfers after you pass away. At the same time, you should see a holistic picture and prepare for the eventualities that you may face toward the end of your life.
Incapacity planning is an important part of the equation. Many people become incapacitated and unable to handle all of their own affairs when they reach an advanced age.
People are living longer and longer lives. Once you reach the age of 65, the statistics indicate that you will live into your eighties. The portion of the population that was between 85 and 94 years of age grew faster than any other demographic segment between 2000 and 2010 according to the United States Census Bureau.
Alzheimer’s disease is very common among the oldest old. Approximately 45 percent of people who are at least 85 years of age are suffering from Alzheimer’s disease. Alzheimer’s causes dementia, and people with dementia are typically going to become unable to make their own decisions. Plan for these instances in advance.
If you were to become incapacitated without taking any steps to prepare for it in advance, interested parties could petition the state to appoint a guardian to handle your affairs. There are some negatives that go along with a guardianship proceeding.
For one, you are no longer in control. The court would appoint someone to act on your behalf, and you would be forced to accept the outcome.
Another negative is the potential for disagreements among loved ones with regard to the appropriate way to proceed.
Durable Powers of Attorney
You can be proactive about preventing a guardianship. It is possible to take the matter into your own hands through the creation of legally binding documents called durable powers of attorney.
The “durable” designation is significant. A power of attorney that is not specifically designated as durable would no longer be in effect if the grantor of the device was to become incapacitated. Durable powers of attorney do remain effective, and this is why they are used for incapacity planning purposes.
When you create a durable power of attorney, you are empowering an agent or attorney-in-fact to act on your behalf in the event of your incapacitation. When a durable power of attorney is in place, there is no need for a guardianship proceeding.
The major difference between a guardianship and a power of attorney is the matter of choice. You make your own choices when you create a power of attorney, and the state decides things for you if a guardianship hearing is convened.
Incapacity Planning Consultation
If you want to put an incapacity plan in place, send us a message through this page to request a free consultation: Grand Forks ND Incapacity Planning.
Latest posts by Raymond German, Estate Planning Attorney (see all)
- My Mother Just Passed Away. Now What Do I Need to Do? - December 12, 2019
- Income Tax Basis in Estate Planning - December 10, 2019
- 5 Considerations for the First-Time Executor - December 5, 2019