Estate planning clearly involves arranging for the transfer of assets to your loved ones after you pass away. But, when you are making preparations for the future it would be wise to consider all the eventualities of aging. There are elder law issues that you may face when you reach an advanced age, and you may not be in a position to respond to them at that time. Therefore, to be fully protected you must make advance preparations with the assistance of an experienced elder law attorney.
One of these eventualities would be incapacitation that renders you unable to make sound medical and financial decisions. Statistics indicate that upwards of half of all people who reach the age of 85 and older are suffering from some form of dementia. You may be surprised to hear that this age demographic is the fastest growing group among us, so it is quite possible that you will live into your mid-80s and perhaps beyond.
If you were to be deemed incapacitated without making any advance preparations, you could become a ward of the state and a guardian would be appointed to handle your affairs. This can be avoided by executing documents called durable powers of attorney.
Most people have heard of powers of attorney. They are legal instruments that are used to appoint an agent to act in your behalf in a legally binding fashion. However, standard powers of attorney are no longer recognized should the grantor become incapacitated. Durable powers of attorney on the other hand do indeed remain in effect upon the incapacitation of the grantor.
You may want to execute two durable powers of attorney: one for health care decision-making, and one for financial matters. This is because of the fact that you may not feel as though the person that you would like to see making your medical decisions is the best choice as a financial decision-maker. By executing two separate documents you can name two different agents to act in your behalf, one for health care matters and one for financial decisions.
If you do not currently have an incapacity plan in place that includes durable powers of attorney, you would do well to be proactive and contact an experienced elder law attorney to arrange for an incapacity planning consultation.
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.