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INCAPACITY PLANNING

Why It’s Important and What It Includes

Copyright 2013. Purcell and Amen - Attorneys at Law, Your Estate Matters LLC www.yourestatemattes.com 2

While old age related incapacity is certainly a valid concern, the reality

is that you could become incapacitated tomorrow as a result of a tragic

accident or a debilitating illness.

Statistics tell us that less than half of all Americans have a comprehensive estate plan despite

understanding the importance of a plan. Even fewer people have included incapacity planning

in their estate plan. The reason for this is simple-just as people prefer not to contemplate their

own death they also prefer not to think about their own incapacity. Moreover, for those who

do consider the possibility of becoming incapacitated they typically think of it in terms of an

old age related disease such as Alzheimer's, which leads to the belief that creating an

incapacity plan while young isn’t necessary. While old age related incapacity is certainly a valid

concern, the reality is that you could become incapacitated tomorrow as a result of a tragic

accident or a debilitating illness. If that happens, who will make decisions for you? Who will

control your assets and your finances? Who will take care of your children? The bottom line as

that in the absence of an incapacity plan the answers to these questions are unclear.

Incapacity Defined

In the State of Missouri, “incapacity” is defined as follows:

“an incapacitated person is one who is unable by reason of

any physical or mental condition to receive and evaluate

information or to communicate decisions to such an extent

that he [or she] lacks capacity to meet essential

requirements for food, clothing, shelter, safety or other care

such that serious physical injury, illness, or disease is likely

to occur.”

The State of Missouri defines “disabled” as follows:

“unable by reason of any physical or mental condition to receive and evaluate information or

to communicate decisions to such an extent that the person lacks ability to manage his [or her]

financial resources.”

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What Happens Without an Incapacity Plan?

In the event you become incapacitated as a result of an accident or some other sudden,

unforeseen set of circumstances there are number of areas of your life in which someone will

need to step in and make decisions on your behalf if you have not planned for the possibility of

your incapacity. People often make the mistake of assuming that a spouse, adult child, or

parent will automatically be given the legal right to make important decisions and have the

legal authority to control assets; however, it is not always that simple. In a worst-case scenario

your family and loved ones may end up in a protracted and costly legal battle to determine

who will have control over you and your estate during your incapacity. Eventually, someone

will win the battle and be appointed as your guardian and/or conservator; however, it might

not be the person you would have chosen. A guardian is someone who has the authority to

make personal decisions on your behalf while a conservator is someone with the legal

authority to make decisions relating to your estate assets.

What Decisions Will Need to Be Made?

Although each situation is unique, there are a number of areas of your life in which decisions

will need to be made in the event you become incapacitated, including:

Healthcare – often the most immediate decisions that must be made when someone is

incapacitated relate to healthcare. Will life-sustaining treatment be used? Will artificial

nutrition and hydration be supplied? Decisions like these may need to be made and if

you are unable to make them than someone else must make them for you.

Bills – if you are incapacitated for more than a short period of time someone will need

to pay your bills which will require access to your finances.

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Assets – if your incapacity lasts for a significant period of time, or is permanent,

decisions relating to your assets will have

to be made. For example, it may become

necessary to sell a home or a vehicle if it

becomes clear that you will no longer be

living in the home or driving the vehicle.

Minor Children – if you have

minor children someone needs to have

the legal authority to take care of your

children immediately upon your

incapacitation. If the other biological

parent is an option than this may not be

an issue; however, for a single parent with an absent or uninvolved parent, this alone

should be reason to create an incapacity plan.

Personal -- There are numerous personal on day-to-day decisions that need to be made

for an incapacitated individual, such as where you will live, what doctor you will treat

with, and who will care for you on a daily basis.

What Can an Incapacity Plan Do?

In short, an incapacity plan allows you to decide ahead of time who will make decisions for you

in the event you become incapacitated. You may also have the ability to make decisions

relating to health care issues for yourself ahead of time to ensure that your wishes are

honored down the road.

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Common Incapacity Planning Strategies

Just as each comprehensive estate plan is as individual as the person who creates the plan, so

is every incapacity plan. There are, however, a number of strategies and documents that are

commonly used in the creation of an incapacity plan, including:

• Living Will – in Missouri, a Living Will allows you to make a declaration indicating your

desire that your death not be prolonged by the administration of “death-prolonging

procedures.” For a living will to take effect, you must have a “terminal condition”.

• Advanced Directive – an advanced directive in Missouri also allows you to express

healthcare wishes but where a living will is limited in its application an advanced

directive is much more broad, taking effect whenever you become incapacitated. In

addition, an advanced directive allows you to appoint an agent who can make decisions

on your behalf if you are unable to make them.

• Power of Attorney – a power of attorney allows you to appoint an agent to act on your

behalf in legal transactions or to make legal decisions for you. If you make the POA

durable it will survive your incapacity. A POA can be general or limited in nature.

• Revocable Trust – a revocable trust allows you to appoint yourself as the trustee while

naming a spouse, parent, child or other loved one as successor trustee. You may even be

able to create your own conditions under which the successor trustee takes over. You

can then transfer assets into the trust, providing the successor trustee with immediate

control over those assets in the event of your incapacity.

Now that you have a better understanding of what the term “incapacity” means and what

happens if you become incapacitated you should also have gained a better understanding of

why it is important to have an incapacity plan in place.

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References

Missouri Bar, Living Wills and Other Advanced Directives

Missouri Bar, Guardians and Conservators under Missouri Law

Family Caregiver Alliance, Legal Issues in Planning for Incapacity

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Estate Planning and Elder Law Attorneys in St. Louis, MO St. Louis Estate Planning Attorneys: Planning for Your Future Today

Missouri Estate Planning attorneys Purcell and Amen, Attorneys at Law – Your Estate Matters,

LLC. are here to help you with legal issues regarding St. Louis Elder Law, Veterans Aid and

Assistance, Probate, Wills, Trusts, Trust Administration, Powers of Attorney, Health Care

Directives, GBLT, and all things required to establish a proper estate plan for the future of both

you and your loved ones. Our law firm understands the varying dynamics of modern families and

seeks to address these issues in the estate plan so your estate is distributed only to those who you

request, instead of those who may be otherwise legally obliged to it. Estate planning can be a big

project that requires consistent maintenance; however, our professional Estate Planning attorneys

can organize all of the legal paperwork and logistics for you, while offering helpful legal advice

along the way.

Purcell and Amen, Attorneys at Law – Your Estate Matters, LLC. 10805 Sunset Office Dr., Suite #100

St. Louis, MO 63127 Phone: (314) 966-8077

www.YourEstateMattes.com

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