Estate Planning For Events While You Are Living – Whiteboard Video

Incapacity Planning is Estate Planning

Estate planning is more than distribution of assets upon death. It protects people while they are alive as well. This video is a primer on the three primary legal instruments used in the event of incapacity.

VIDEO SCRIPT – No matter who you are and no matter how much wealth you may or may not have, there are some key estate planning steps to protect you while you are alive.  These steps are often called “incapacity planning,” which essentially prepare for the unfortunate possibility of being unable to take care of yourself. They also avoid the expensive, stressful and dilatory probate process of guardianships and conservatorships.

There are three basic incapacity planning instruments that go by different titles depending on the governing jurisdiction: power of attorney appointing a person to act on your behalf to manage your financial and legal affairs, a power of attorney for health care appointing a person to make medical decisions on your behalf and what is often called a living will…which authorizes an individual to withhold or withdraw life-sustaining medical support when a person has a terminal condition.

The person who executes a power of attorney is generally called the principal and the person given the power of attorney is often called the attorney in fact. It is usually possible – but not always advisable – to appoint multiple concurrent attorneys in fact who jointly can make decisions pertaining to one’s finances or medical treatment. That can cause problems when there is disagreement between or among them.

In any event, it is always important to appoint a “successor” attorney in fact in the event the primary attorney in fact is unable to serve for some reason.

The financial power of attorney is often effective immediately, but it is not uncommon for persons to make the power effective only upon future incapacity. This is commonly known as a springing power of attorney. Because there can be delay or difficulty in obtaining proof of incapacity, attorneys will often recommend that a power of attorney be effective immediately rather than springing.

Attorneys in fact become fiduciaries of the principal with each state setting its own standards of conduct. For example, a state may require attorneys in fact to operate under the “prudent person standard” when it comes to investing assets of the principal. And attorneys in fact may not commingle the principal’s assets with their own.

A health care power of attorney usually requires that at least one and sometimes two physicians certify that the principal is incapacitated. Due to federal law protecting private health information, it is critical that any health care power of attorney specifically authorize an attorney in fact to access certain types of protected information and the principal should execute a separate document containing such an authorization.

States may require that additional permissible powers be specifically enumerated in health care powers of attorney: consent to autopsy, organ donations and consent to withhold or withdraw artificially supplied nutrition and hydration are some typical provisions.

While the term living will has been abandoned by many states, the concept remains the same: when a person is persistently unconscious, sometimes called a vegetative state, with no reasonable expectation of recovery, then procedures that prolong artificially the dying process can be withdrawn. Again, only a physician can make the medical determination that there is no reasonable expectation of recovery.

Some states allow a person to actually disinherit an individual who interferes or acts in contravention to the expressed wishes of a declarant.  These are but a few of the many provisions that are contained in the three main documents that protect you while you are alive. Always seek competent legal counsel to draft these important documents and do not rely on the “backyard advice” of friends and neighbors or rely on do-it-yourself forms found on the internet. There are too many requirements and subtleties to drafting these important legal instruments.




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