incapacitated estate planning


Most people know that they need a will and that if they don’t have one, state laws of descent and distribution will control how their estate is distributed. What they often don’t consider is what laws will apply if they become incapacitated.

For the purposes of this article, an incapacitated person is one who, because of a physical or mental condition, is substantially unable to manage the person’s own financial affairs. If a person becomes incapacitated, and he or she has not done any other planning then the person’s estate may become subject to a guardianship.

All guardianships are court supervised. Unlike probate, there is no such thing an independent guardianship. Because of this, guardianships can be cumbersome, slow and expensive. To avoid the need for a guardianship of the estate, a traditional estate planning tool has been the statutory durable power of attorney. This power of attorney is the appointment of an agent with authority to handle financial affairs on your behalf. If you become incapacitated, then your attorney-in-fact or agent can handle your finances.

Recently, more and more problems have arisen with the use of powers of attorney. Even though Texas has a statutory form for powers of attorney that clearly defines the meaning of the terms, many financial institutions refuse to recognize the power of attorney. Common excuses include that the bank has its own form it wants to use, that the power of attorney is too old or too new, or they just don’t feel comfortable with it.

As an alternative, more estate planning attorneys are recommending that their clients consider a living trust. The trust can name a successor trustee in the event of incapacity and may even define the way in which incapacity can be determined without a court proceeding.

You need to discuss how to plan for incapacity, as well as death, and determine what is the best way to protect your finances.

Hammerle Finley Law Firm. Give us a call. We can help.

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The information contained in this article is general information only and does not constitute legal advice.