Do not make the common mistake of associating incapacity with the elderly. Incapacity is very much a concern for the young as well. In fact, prior to around age 40 you are three times more likely to become incapacitated than you are to die. One in four of today’s 20-year-olds can expect to be out of work for at least a year because of a disabling condition before they reach retirement age. If you care what happens to you and your assets in the event incapacity does strike, you need to plan for the possibility.
Many people fail to plan for incapacity because they mistakenly believe this to be the case. The reality is that even if you are married there is no guarantee that it will be your spouse or a family member making serious, even life or death, healthcare decisions for you if you are unable to make them. Sometimes, more than one family member believes that he/she should be the one making those decisions. The result is a court battle that could result in a family feud that leaves the family divided.
Who will control your assets during a period of incapacity creates the same dilemma as who will make healthcare decision for you – and may cause the same divide within your family. In the absence of a plan that gives someone the legal right to control your assets, a court will likely be forced to appoint someone. That person may – or may not – be someone you would want taking over control of your assets.
By incorporating an incapacity plan into your comprehensive estate plan you are able to use legal strategies and tools that collectively determine who will control your assets and make important decisions for you in the event you are ever incapacitated. It allows you to make crucial decisions now instead of a judge making them for you later or deciding who will make them for you.
A Power of Attorney is a legal agreement that allows you (the “Principal”) to grant another person (your “Agent”) the legal authority to act in your place in legal matters. That authority can be general, allowing your Agent almost unfettered power to act on your behalf, or limited, only granting your Agent the authority to act on your behalf in specific situations or for a designated period of time. While a Power of Attorney can be a helpful incapacity planning tool, it has some drawbacks, including the risk that third parties won’t accept your Agent’s authority. It also has some limitations because even a general POA won’t usually cover all situations. Most states, for example, require you to execute a specific type of document to give someone the legal authority to make healthcare decisions for you.
An advance directive is a legal document that allows you to plan ahead and make your own end-of life wishes known in the event that you are unable to communicate those wishes at some later time and/or appoint someone to make decisions for you. State law dictates what types of advance directives are recognized in the state. New Hampshire recognizes two types of advanced directives, including:
- Power of Attorney for Health Care which allows you to appoint someone as your Agent to make decisions for you in the event you are unable to make them yourself because of you incapacity at some point in the future. Your Agent will have the authority to consent, refuse to consent, or withdraw consent to medical treatment, and may make decisions about withdrawing or withholding life-sustaining treatment. Your Agent cannot consent to commitment to a state institution, sterilization, or termination of treatment if you are pregnant and if the withdrawal of that treatment is deemed likely to terminate the pregnancy, unless the treatment will be physically harmful to you or prolong severe pain which cannot be alleviated by medication.
- A New Hampshire Declaration which is New Hampshire’s version of a Living Will. In New Hampshire, a living will is very limited in scope, only allowing you to make a statement that you want life-sustaining treatment withheld or withdrawn if you are near death or permanently unconscious.
One of the most commonly used incapacity planning tools is a revocable living trust. When used to plan for the possibility of incapacity it works by allowing you to appoint yourself as the Trustee of the trust and appoint someone of your choosing as the successor Trustee. Your estate assets are then transferred into the trust. Because you are the Trustee, you continue to control those assets just as before; however, if you become incapacitated the successor Trustee (chosen by you) takes over as Trustee, thereby shifting control of your assets to the person of your choice without the need for court intervention. Moreover, when you recover you can resume your position as Trustee as if nothing happened. Finally, because the trust is revocable, you can move assets in and out of the trust with ease and even replace the successor Trustee if you wish to do so at any time.
If you have a loved one who has become incapacitated, as a result of Alzheimer’s or simply the natural aging process, seeking guardianship may be your only option if you wish to keep them and their assets safe. A guardianship is a relationship established by a court of law between the person who needs help, referred to as the “ward,” and the person or entity named by the court to help the ward, known as the “Guardian.” Considered the option of last resort because of its restrictive nature, courts will only approve a guardianship if convinced it is absolutely necessary. If you find yourself worried about a loved one, consult with an experienced guardianship attorney about your legal options.
If you have additional questions or concerns related to incapacity planning, contact the experienced New Hampshire incapacity planning attorneys at DeBruyckere Law Offices by calling (603) 894-4141 to schedule your consultation.