A comprehensive estate plan is meant to manage your estate at your death and should also positively impact your life by planning for and providing necessary protections while you are still alive.
Planning for incapacity
Incapacity, the inability to handle your own personal or financial affairs because of a mental or physical condition, can happen at any stage of life.
According to the CDC, nearly 29 percent of adults across all age groups live with some form of disability and about 14 percent live specifically with a cognitive impairment.
Many people who reach advanced age eventually experience physical or cognitive decline that affects their ability to manage their personal, financial or legal affairs. Proactive estate planning allows you to decide in advance how your affairs will be managed if you become incapacitated.
Without a comprehensive plan, the court may have to intervene and appoint someone to act on your behalf.
For example: When Alex was in his 40s, he put together a cursory estate plan, a simple will detailing who would get his accounts and property upon his death.
However, Alex did not update his plan as he aged. In his late 70s, he developed Alzheimer’s disease. Because Alex had not legally appointed an individual to handle his affairs for him, the court had to get involved and appoint a guardian.
What is a ‘guardian’ or ‘conservator’?
In Texas, a guardian is an individual appointed by the court to make decisions on behalf of an incapacitated person who did not appoint someone to do so through comprehensive estate planning prior to losing capacity.
A guardian of the person makes decisions about an individual’s personal and medical care, while a guardian of the estate manages their financial and legal affairs.
In a guardianship proceeding, the court’s goal is to determine and implement solutions that will serve the incapacitated individual’s best interests.
Four reasons to avoid guardianship
• High costs. Simply put, guardianships are expensive. Legal fees and court costs can quickly chip away at the value of your money and property, leaving less for your care and for your loved ones after you pass.
• Family conflict. Another significant drawback of guardianship is the potential for family conflict. Relatives may disagree over who is best suited for the role or how decisions should be made.
• Lack of privacy. Guardianships are a court-supervised proceeding and become part of the public record, meaning that aspects of your private, medical and financial affairs are often open to public view.
• Lack of clarity. For example, if Alex had appointed people he trusted as agents under medical and financial powers of attorney and expressed his wishes for end-of-life medical care in his estate plan, his affairs would be handled exactly as he wished during his incapacity.
Fortunately, a guardianship can be avoided. You can take a few specific steps in your estate plan to ensure that your affairs never end up in a court-appointed guardian’s hands:
1. Powers of attorney. A complete estate plan includes powers of attorney, which allow you to appoint trusted individuals, called agents, to act on your behalf if you become unable to manage your financial or medical affairs.
These documents ensure that the people you select, not the court, are the ones making decisions for you. In addition to granting authority over healthcare or finances, powers of attorney can also include nominations for a guardian in case court involvement ever becomes necessary.
While a judge still makes the final appointment, naming your preferred person in advance gives you a voice in the process.
2. Long-term care planning. You may never need long-term care in the form of ongoing assistance with daily activities or medical support.
However, building a long-term care strategy into your estate plan provides peace of mind and ensures that you will receive care according to your wishes if it becomes necessary.
Avoiding guardianships, and the stress and expense, is a relatively pain-free process if handled well ahead of time.
This article is provided as a service of the Law Office of Lasca A. Arnold, PLLC.
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