WHAT HAPPENS WHEN WE FAIL TO PLAN FOR OUR INCAPACITY OR DISABILITY

There are ways to plan for disability or incapacity other than through the execution of a Durable Power of Attorney. They include, but are not limited to, establishing a trust to manage your assets and property and the use of joint accounts. A trust is a more complicated legal arrangement than the Durable Power of Attorney but it can be used in lieu of or in addition to the Durable Power. Even with a trust, however, you still need a Durable Power for authority to handle non-trust matters. A trust is beneficial for some people and its preferred by some estate planning attorneys over a Will and Durable Power. I don't think it's "one size fits all" and I believe the client needs to determine what suits them best after thoughtful, sound legal advice from a seasoned estate planning attorney.

The use of joint accounts allows the joint account owner to access the funds in the joint account for the benefit of a disabled account owner. Joint accounts are often used by married couples to manage their day-to-day expenses and household costs. But outside of a marriage, joint accounts have risks and unwelcome outcomes. So they are usually not recommended for non-married persons. And, even with married couples, a person has more than simply one joint account such that their other assets may not be accessible without a Durable Power of Attorney (such as their IRA, 401(k), etc).

Also, you should understand that simply because a married couple owns everything in their joint names does not eliminate the need for a good Durable Power of Attorney. Both spouses must still execute the legal documents in order to sell, mortgage, or refinance their home, regardless of whether you own it as tenants in common or with rights of survivorship. And, don't try to talk yourself out of a Power of Attorney by thinking you have everything covered. No matter how well you have organized your affairs and your property, there are a whole host of things that have nothing to do with how you own your property that could create hardships if you become incapacitated and don't have a Durable Power of Attorney.

So what happens if you become disabled or incapacitated and have not planned for such an event by executing a good Durable Power of Attorney (or some type of trust agreement along with your Durable Power)? More likely than not, your family will have to file a legal proceeding in the probate court to have you declared “incapacitated” by the court and request the appointment of a family member as your guardian and your conservator. The appointment of a guardian is required to handle your personal affairs, such as making living arrangements, authorizing medical care and making health care decisions. The appointment of a conservator is required in order for someone to have authority to handle your property and financial affairs, to pay your bills, access your funds and manage it all because you are unable to do it and no one has the legal authority to do it for you.

Guardianship and conservatorship proceedings in the probate court are time-consuming, expensive and, even if they are uncontested, they are still stressful and difficult for the family. They can also cause family arguments and discord if the family members do not agree on who should be appointed as the guardian and conservator. These proceedings always require the appointment of an attorney to represent the person who is alleged to be incapacitated. They always require that physicians and other persons be appointed to examine the person and the examiners must always file written reports with the Court. A hearing is then held in the court with witnesses and testimony, required notices must be sent to family members, and other legal and procedural requirements must be adhered to and followed. These legal requirements take a great deal of time and result in a good bit of expense, all of which could have been eliminated had the person planned ahead and executed a good Durable Power of Attorney.

Although a Durable Power of Attorney can never provide a 100% guarantee that if you become incapacitated or disabled you and your family will not end up in the probate court. Sometimes no amount of planning can avoid family fights and conflicts. That said, however, it is the best protection you can buy. And, it comes with a great deal of peace of mind that you have taken the necessary steps to protect yourself and your family should you become disabled or incapacitated. An overwhelmingly large majority of the people who plan for their disability by executing a good, broad, well-written Durable Power of Attorney never see the inside walls of the probate court in a guardianship and conservatorship proceeding. Let that be the case for you, too. I encourage you to be in the majority, plan for the possibility of your disability and execute a good Durable Power of Attorney.

(The information provided in this article is for informational purposes only and is of a general nature. The information should not be construed as legal advice. If you have any questions about the subject matter of this article or related matters, you should consult with a professional advisor for advice. Deirdre W. Edmonds is the former Horry County Probate Judge and is the owner of The Law Office of Deirdre W. Edmonds, PA, located at 1500 Highway 17 North, The Courtyard, Suite 213, Surfside Beach, SC 29575. The Law Office of Deirdre W. Edmonds, PA focuses on estate planning, probate administration, probate and trust litigation, disability planning and elder law. Contact Deirdre W. Edmonds via Telephone: (843) 232-0654; Website: www.dedmondslaw.com; and Email: dedmonds@dedmondslaw.com.)