The Truth of Incapacity and Why You Need To Prepare
I recently met with my Tucson client, Bill, to review his trust because of law changes. He was newly married and brought his wife, Mary, to our meeting. I reviewed the important law changes that affected Bill’s trust and before our discussion ended, I asked Mary if she had any estate planning in place. Mary replied, “I don’t have anything of value to give to anyone, so I don’t need any estate planning.” Unfortunately, Mary’s response was very typical since many people believe estate planning is only for those with a large estate.
I asked Bill and Mary to walk through two stories with me. The first story was where Bill and Mary were traveling together and got in a car accident. Mary was seriously injured and could no longer care for herself or make her own decisions. Who would be able to help Mary?
The second story was where Mary woke up one morning and noticed Bill was very pale and nonresponsive. Bill was having a stroke and was rushed to the hospital. Unfortunately, the stroke did serious damage and Bill could no longer make his own decisions. Who would be able to help Bill?
Unfortunately, Mary has no estate planning in place so a court proceeding called a Guardianship and Conservatorship will have to be started by someone who would like to be able to make Mary’s financial and medical decisions. Likely, this will be Bill, but Mary’s children from her previous marriage may come forward and ask the judge to be her Guardian and Conservator.
The court process of a Guardianship and Conservatorship is very humiliating, time consuming, public and expensive. The judge will appoint the person whom he feels has Mary’s best interests at heart. The cost of an average proceeding is approximately $5,000-$10,000. On an annual basis, the appointed guardian and conservator is required to report to the court on the status of the incapacitated person.
Fortunately, Bill had estate planning in place which avoids a court proceeding of a Guardianship and Conservatorship. Bill had already chosen who he would want to make his financial and healthcare decisions if he became incapacitated. There will be no court proceeding because his wishes were dictated in his trust, and the savings to Bill’s estate is huge.
If you are over the age of 18, you must have healthcare and financial planning documents nominating an agent who will handle your affairs if you become incapacitated. These documents consist of a Financial Power of Attorney, Healthcare Power of Attorney, Mental Healthcare Power of Attorney, HIPAA and Living Will.
About Morris Hall:
At Morris Hall, we have focused our legal practice on estate planning for over 40 years. Along with estate planning, our attorneys help clients and their families with matters of probate, trust administration, wills, powers of attorney, business planning, succession planning, legacy planning, charitable gifting and other important legal aspects. We also have divisions in financial, real estate and accounting to help you incorporate all of your planning together, ensuring that everything works perfectly for your needs and situation. Our Arizona offices are located in Phoenix, Mesa, Scottsdale, Tucson, Prescott, Flagstaff and Arrowhead. Our New Mexico offices are located in Albuquerque, Las Cruces and Santa Fe. Contact us today at 888.222.1328 to schedule an appointment!