While you are alive and competent, you should plan for incapacity. It is an essential part of an estate plan and the estate planning process. When possible, court proceedings for guardianship and conservatorship should be avoided. Here is why
Patty is single and works full-time as a nurse. She is in a car accident, suffers a serious head injury, and becomes unable to manage her medical and financial affairs. She has been informed that rehabilitation will take months. Regardless, her bills still need to be paid. She has a mortgage, a car payment, medical bills, utility bills, and she has a dog and two cats. Some of her assets will need to be sold to cover her bills and have enough money to take care of her animals. Who will take care of those things now that Patty cannot do so? Who will manage her affairs and make medical decisions on her behalf? If Patty has not made that decision for herself, a court will make those decisions for her.
Regrettably, Patty did not do any estate planning before her becoming incapacitated. So, for someone to step in and act on her behalf, they must petition the court to become her guardian or conservator. The list of interested parties includes family members, friends, or social service agencies.
A conservator is sometimes called a guardian of the estate. They exercise authority over an individual’s financial affairs. Sometimes an added problem arises when more than one person seeks to be appointed as conservator. However, even if the process runs effortlessly, it will still be a public procedure. Plus, it will be expensive in both time and money. In addition, if Patty recovers and wants to regain control over her affairs, she may find that removing the guardian or conservator may prove challenging.
Accidents and injuries are not the only way someone can become impaired. The Social Security Administration states that “the probability of becoming disabled between age 20 and normal retirement age is 25 percent … of dying between age 20 and normal retirement age is 13 percent.” Retirement offers other opportunities for incapacity as we age. The Alzheimer’s Association estimates that approximately 17 percent of people with Alzheimer’s dementia include those aged 75-84, and 32 percent of people aged eighty-five and older suffer from the condition.
The key to protection against incapacity is having an estate plan BEFORE there is a problem. Preparing your estate plan while you are competent keeps you in control over who will manage your affairs in the likely event you become incapacitated.
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