I feel like I say this a lot, but I can’t say it enough: the time for estate planning is when you have absolutely no need for estate planning. When you need it, it’s too late.
Estate planning is more than a will. It is arranging your affairs so that everything is set up in a way that makes life easier on your loved ones. My personal goal is to make it so that when/if I get sick or dementia that my family will be sad and that is all. They will not be frustrated or confused or unable to handle things, because I will have set everything up ahead of time. When I die, the only thing they will have to deal with is grief, because everything else will be in a nice, neat folder all ready to go. It only seems considerate.
One of the biggest things that people fail to do is to set up powers of attorney. I get why. Most people don’t want to give up control. I don’t want to give up control. I’ve been a grown adult with autonomy for enough decades that I’d have to stop and do the math and carry the one to figure out exactly how many years. I’m not keen on the idea of someone else making medical decisions for me or taking over my checkbook. But I’m also cognizant of the face that there may likely come a time where I am not capable of doing either of those things. I don’t want my children to have to go to Court and hire lawyers and bump up against procedural brick walls to get simple things done.
Not when the solutions are so simple.
Under the law in the United States, in order to participate in any kind of contract, you have to be competent to make a contract. That means that you have to have the capacity to understand what you are doing from a legal standpoint. Children, by definition, don’t have the capacity to make contracts, so until your 18th birthday you need an adult to co-sign any contract. If you have certain mental or neurological illnesses that are untreated or untreatable, like Alzheimer’s or certain schizophrenias or traumatic brain injuries, you might not have the capacity to make contracts. Sometimes a lack of capacity can be temporary, like if you are in a medically induced or short-term coma.
Legally speaking, contracts aren’t what regular people think of as contracts – written documents with “we do formally agree to the following” and parties of the first and second part and signatures on the bottom. Contracts can be something as simple as a check or a credit card or a car insurance policy.
The way around these problems is to set up powers of attorney – both financial and medical – while everything is just fine. They are simple forms, generally not expensive, in which you designate who you want to be in charge in the event of your incapacity. That’s the trick – you don’t give up any control while you are able to do things for yourself. The power doesn’t kick in until a doctor says you can’t do it anymore.
SO MANY TIMES people come to me with Mom or Dad in the hospital and they want me to draw up a power of attorney for Mom or Dad so they can deal with the finances or the insurance or the hospital. I ask them if they can get a doctor to sign off on Mom or Dad being competent and they give me that look. I have to say no. It’s too late. Mom or Dad no longer has the capacity to sign a power of attorney, even though everyone on Earth agrees that this is what Mom or Dad would have wanted. Unless you have a doctor who says you are fully capable, it isn’t going to fly. Now you have to go to court to get guardianship or conservatorship.
Being proactive is always better. Even if it’s an uncomfortable subject, it will make things easier in the long run. And cheaper, if that makes it an easier sell.
Nothing in this article should be construed as legal advice. It is being offered for informational purposes only.
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