So, you’ve finally gotten around to creating that Last Will and Testament you’ve been putting off for so long. Maybe you even added a trust or a few other estate planning tools to help deal with various end-of-life and legacy planning challenges. With all of that, your estate plan is finally complete – right? Maybe not. The fact is that you aren’t really protected unless you’ve also included a plan to deal with unforeseen and incapacitating illness or injury too. Here are five very important reasons why you need incapacity planning to complete your estate plan strategy.
Incapacity Can Strike at any Time
Incapacity isn’t something that just happens as you get older. While dementia can certainly leave anyone in an incapacitated state, it is not the only condition or event that can have that effect. In fact, incapacity can strike at any time, and can impact anyone regardless of age or prior health status. A car accident can leave you physically and mentally incapacitated. Disease and illness can have the same effect. In every instance, the results can include a lack of mental capacity or an inability to effectively communicate your wishes.
Far too many of us just assume that those things only happen to other people, and simply rely on the hope that we can avoid incapacity altogether. The problem with that outlook is obvious: hope is not a strategy. Your incapacity plan is similar to an insurance policy for your car or home. You need it even though you hope to never be forced to use it. And consider this: while estimates suggest that there’s only about a twenty percent chance that you’ll become incapacitated before you retire, those chances rise to as much as seventy-five percent after retirement. You need to protect yourself!
You Need a Plan to Express Your Convictions
How do you feel about life-sustaining medical treatment? Have you given any thought to whether you want to be resuscitated if you stop breathing or your heart stops beating? Perhaps you’ve already considered these possibilities and expressed your wishes to friends or family – but is that enough from a legal standpoint? Unfortunately, the answer is no. Without a legal document expressing those wishes, medical providers may end up providing treatment that you would never accept if you were given the choice.
Your incapacity plan can provide the instructions needed to ensure that you only receive medical care that comports with your ethical, religious, and lifestyle convictions. A healthcare directive can enable you to designate someone to make medical decisions on your behalf, while a living will and Do-Not-Resuscitate declaration can help medical staff to better understand how you feel about certain types of treatments. Without this planning, you may have no way of expressing your beliefs and ensuring that they are properly honored by those who have been charged with providing you medical care.
The Alternative is Court-Supervised Guardianship
Of course, even if you don’t have a plan in place, decisions must still be made. You’ll have financial concerns that need to be addressed. There will be ongoing medical issues that will require some type of decision-making as well. Your family won’t be able to provide that decision-making without the proper authorization, though, and that means that they’ll have to contact the probate court to seek guardianship over your affairs. Unfortunately, a court-ordered guardianship isn’t always all that it’s made out to be.
The court may choose the same person that you would have selected in your incapacity plan, but there’s no way to guarantee that. It’s also possible that you’ll end up with your interests being represented by someone you never would have chosen. The most effective way to ensure that your decisions are made by someone you fully trust is to create an incapacity plan and select your own agent to represent your financial and medical interests.
Without a Plan, Your Assets Could be at Risk
Of course, guardianship can have more of a negative impact than mere inconvenience and stress for your loved ones. There is a financial cost to it all too – and those costs will end up being paid by your estate. Yes, that’s right; when you are provided a guardian by the court, you end up paying for all those costs. That includes court costs and attorney’s fees, as well as any stipend provided to the guardian for his or her services.
Over time, those costs can be substantial. In fact, there are instances in which incapacitated individuals have their entire estates consumed by the costs of guardianship. And even if that doesn’t happen, your wealth can still be at risk if your guardian fails to exercise the appropriate level of fiscal responsibility or engages in questionable behavior. Fraud and negligence are real concerns.
Your Family Deserves Peace of Mind
Stress and anxiety can afflict the family members of incapacitated persons, and the lack of a coherent incapacity plan can magnify those concerns. Family stress can even turn into conflict in cases where members of your family have different opinions with respect to how you want your affairs managed. All this conflict can result in schisms that tear the family apart, as your incapacitation becomes a stumbling block that does lasting damage to the relationships that bind your loved ones together. You owe it to your loved ones to ensure that you’ve done everything possible to avoid that potential conflict and give your family members the peace of mind they deserve.
Naturally, there’s no law that says that you must have an incapacity plan in place to protect your interests when illness or injury occur, but the very real benefits of having that protection are simply too great to ignore. At Frank & Kraft, Attorneys at Law, our incapacity planning team understands how important it is for everyone to have these protections, and will work with you to ensure that your loved ones have the peace of mind they deserve. If you’re ready to safeguard your interests and help your family avoid the stress and costs associated with guardianship, call today at (317) 684-1100, or contact us at our website.
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.