A well-thought-out estate plan involves preparing not only for the expected but also for the unexpected. One such unexpected event is the possibility of incapacitation. Contrary to widely held belief, planning for incapacity is not just for older or ill individuals. Anyone can lose their capacity due to an injury or illness when they least expect it. Regardless of how young or healthy you are, incapacity planning is something to include on your “to-do” list when setting up an estate plan.
The legal team at Harrison Law, PLLC, is dedicated to helping clients in Gilbert, Arizona, and the surrounding areas achieve peace of mind by providing them with customized solutions to convey their plans and wishes. We understand that incapacity planning can be a sensitive and personal matter, which is why keeping information and communications with our clients is of utmost importance to us. Feel free to call our office at (480) 320-2310 to start developing your incapacity-proof estate plan.
Incapacity Planning: What Does It Involve?
While it is vital to enjoy your life to the fullest every day, you should keep in mind that life can be unpredictable. According to Arizona Court Help, an individual may be considered incapacitated when he or she is unable, for any of several reasons, to make or communicate responsible decisions regarding their own care. Some people, such as those living with certain severe developmental disabilities, are chronically incapacitated; others are incapacitated temporarily, as the result of medication or other short-term intervention. However, anyone may lose their capacity through illness or accident without warning. Incapacitation often does not conveniently “call ahead” so that one has time to prepare; a sudden illness or devastating accident can strike at any time. For this reason, people can benefit from planning for incapacity before it happens through what is known as “incapacity planning.”
As the name implies, incapacity planning involves drafting certain legal documents to prepare for temporary or permanent incapacity. An individual may need to prepare the following documents if their goal is to plan for incapacity:
- Last Will and Testament
- Power of attorney
- Revocable living trust
- Advance directive
- Provider Orders for Life-Sustaining Treatment (POLST)
Without these and other documents in place, court intervention may be necessary to make decisions regarding your post-incapacity life and death on your behalf. The problem with court intervention is that the court’s decisions may not align with your wishes and preferences.
Estate Planning Documents for Incapacitation
The Arizona estate planning attorney at Harrison Law, PLLC, helps people of all ages create various documents when planning for incapacity. Some of the most common documents include the will, power of attorney, and a revocable living trust.
Last Will and Testament
Even though many people understand that having a will is a must, an estimated 60% of Americans do not have this document in place, according to the American Association of Retired Persons. The Last Will and Testament can include instructions for how you want your assets to be distributed after your death. While incapacity by no means is the end of life, you will not be able to write a will––or create any other estate planning document, for that matter––once capacity is lost. If an individual passes away without a will, their assets will be divided among their heirs according to intestate succession laws of the state in which the deceased was a resident.
Power of Attorney
Power of attorney is usually one of the fundamentals when it comes to planning for incapacity. These documents are used to designate an agent who would make decisions about an individual’s assets, finances, or medical care on their behalf in the event that they become unable to represent themselves and make decisions on their own. Just like the Last Will and Testament, a power of attorney document must be completed while the principal is still mentally and physically competent. In the absence of a power of attorney, the court will appoint a person to manage an individual’s affairs after they become incapacitated.
Revocable Living Trust
A revocable living trust, which can certainly become an invaluable tool in incapacity planning, allows an individual to manage their property and assets even after they are transferred into the trust. Many people create revocable living trusts primarily to avoid probate and minimize estate taxes, without realizing that this trust can also be helpful when planning for temporary or permanent incapacitation. The trust should contain the so-called “incapacity clause” to establish the process for determining the grantor’s incapacity (the grantor is the person who creates the trust). The clause may explicitly describe what constitutes incapacity and state that during the period of such incapacity, the designated trustee can manage the property and make decisions regarding the trust estate.
Incapacity and Illegality of Contracts
The law recognizes three bases for incapacity when it comes to creating estate planning documents and other contracts:
- Minors. Minors cannot enter into contracts until they reach the age of majority, which is 18 in most states, including Arizona. Signing a contract before one’s 18th birthday means that the contract will be voidable.
- Vulnerable parties. A “vulnerable” person is anyone who does not have the capacity to understand the content of the contract and the consequences of signing such a document. An individual incapacitated due to a sudden injury or illness is a common example of a vulnerable person.
- Intoxicated persons. People intoxicated by alcohol, drugs, or other substances cannot sign contracts due to their inability to comprehend what they are doing.
A document is not enforceable when signed by any of these categories of individuals. For this reason, it is important for people to create the necessary incapacity planning documents in advance before capacity is lost. Incapacity planning can put your mind at ease by ensuring that your wishes will be respected at a later date.
Get Help With Incapacity Planning
At Harrison Law, PLLC, we understand that planning for incapacity can be a sensitive topic for individuals and families. That is why we are here to listen to your concerns and understand your circumstances. If you do not create a proper plan, your loved ones may be left with uncertainty and the burden of making tough decisions regarding your finances and medical care. Our legal team can advise you on the tools you can use to prepare for possible incapacitation, even if you are still relatively young and healthy. We can provide you with compassionate and personalized service to ensure that you have the appropriate documents in place. Tell us about your unique circumstances and find out how we can help you with incapacity planning in your particular case. Call (480) 320-2310 to book an appointment.
© 2023 Matthew W. Harrison and Harrison Law, PLLC All Rights Reserved
This website and article have been prepared by Harrison Law, PLLC for informational purposes only and does not, and is not intended to, constitute legal or financial advice. The information is not provided in the course of an attorney-client relationship and is not intended to substitute for legal advice from an attorney licensed in your jurisdiction.
