Estate planning involves planning ahead for the things that will take place after you pass away. While this is an important part of the process, you should also consider the eventualities of aging and the potential for a guardianship proceeding.
Incapacity Among Seniors
Clearly, this is not the most pleasant subject to consider, but incapacity looms as a very distinct possibility. The oldest segment of the population is growing faster than any other. Once you reach the age of 65, it becomes likely that you will live into your eighties.
Alzheimer’s disease strikes some 45 percent of people who are at least 85 years of age. Elders who are suffering from Alzheimer’s induced dementia typically become unable to handle all of their own affairs.
Alzheimer’s is the leading threat, but there are other causes of incapacitation. When you combine the statistics, you can see why incapacity planning is important.
If you were to become incapacitated late in your life without taking any steps to prepare for the possibility, a guardianship hearing could be convened. Under these circumstances, the state would appoint a guardian to act on your behalf if proof was presented that you were in fact incapacitated.
This can be a disconcerting prospect, because you would have no control over the choices that are made by the court.
Durable Powers of Attorney
You can plan ahead for possible incapacity and prevent a guardianship through the execution of legal documents called durable powers of attorney. With a durable power of attorney, you name an agent or attorney-in-fact. This person would be authorized to act on your behalf should you become incapacitated at some point in time.
To provide some clarity with regard to the “durable” designation, a durable power of attorney remains in effect even if the grantor of the device becomes incapacitated. A power of attorney that is not specifically designated as durable would no longer be effective upon the incapacitation of the grantor.
People typically execute two different durable powers of attorney: one for health care decision-making, and one for financial matters. If you want to, you could name two different respective attorneys-in-fact.
When you name your own decision-makers through the execution of durable powers of attorney, there is no need for a guardianship.
The difference between a durable power of attorney a guardianship can be reduced to one word: choice. When a guardianship is underway, the court will choose for you. If you create durable powers of attorney in advance, you make your own choices.
Free Incapacity Planning Consultation
If you would like to discuss incapacity planning with a licensed attorney, our firm can help. We offer free consultations, and we would be glad to assist you. Simply click this link to schedule an appointment: Indianapolis Incapacity Planning.
Mr. Kraft assists clients primarily in the areas of estate planning and administration, Medicaid planning, federal and state taxation, real estate and corporate law, bringing the added perspective of an accounting background to his work.