Is Incapacity Planning in Northern California Really Important? www.norcalplanners.com 1

IS INCAPACITY PLANNINGIN NORTHERN

CALIFORNIA REALLY IMPORTANT?

“Your incapacity plan should also address financial decision-making. If you use a revocable living trust as the centerpiece of your estate plan, you could empower a disability trustee to administer the trust if you ever become unable to handle the tasks on your own.”

TIMOTHY P. MURPHY NORTHERN CALIFORNIA CENTER FOR ESTATE PLANNING AND ELDER LAW

http://www.norcalplanners.com/

Is Incapacity Planning in Northern California Really Important? www.norcalplanners.com 2

When you are going through life as a relatively healthy adult, the prospect of

incapacity can seem alien to you. Of course we all recognize the fact that elders

sometimes become unable to handle all their own affairs, but it can seem like

this only happens to a small minority.

While it is not a very pleasant prospect consider, the facts tell a different tale.

Many people need help with their day-to-day needs because of physical

limitations, and this is certainly part of the equation. However, in many cases,

the individuals in question can make sound decisions on their own, and they

simply need help with certain activities.

Is Incapacity Planning in Northern California Really Important? www.norcalplanners.com 3

At the same time, there are those who do become incapacitated physically, and

mental incapacitation can also enter the picture. When it comes to mental

incapacity, Alzheimer's disease looms large.

You can learn a lot about Alzheimer's disease if you explore the Alzheimer's

Association website. They devote a lot of time, energy, and expertise to the

subject, and their work is very valuable.

According to the website, this disease strikes approximately 45 percent of

the oldest old. This term, “oldest old,” is used to describe people who are at least

85 years of age.

If you are thinking that

only a small percentage of

people live to this age, you

should understand some

longevity data. The Social

Security Administration has a

life expectancy calculator on

its website. Using the tool, if

you were to celebrate your 67th birthday today, your life expectancy would be

85 years of age or older depending on your gender.

As you can see from the statistics, if you live long enough to collect Social

Security, and most of us expect to do so, it is likely that you will reach your mid-

eighties and perhaps beyond. Alzheimer's is a looming threat for the oldest old,

and there are other causes of incapacitation.

Is Incapacity Planning in Northern California Really Important? www.norcalplanners.com 4

ADVANCE DIRECTIVES FOR HEALTH CARE

To prepare for possible latter life incapacity, you can devise an incapacity

plan that addresses the contingencies that you may face. Advance directives for

health care will be part of the plan.

One part of a California advance health care directive is a living will.

Doctors can sometimes use life-sustaining measures like artificial nutrition and

hydration and mechanical respiration to keep terminal patients alive indefinitely.

Many people would prefer to refuse these measures, and others would accept

them.

The decision is something that each person should make individually. When

you execute an advance health care directive in California, you can state your life

Is Incapacity Planning in Northern California Really Important? www.norcalplanners.com 5

support preferences, and doctors would be compelled to follow your instructions

if a life-support scenario should present itself.

Another aspect of an advance health care directive in California us the

health care proxy or durable power of attorney for health care. This section is

used to empower a representative to make medical decisions on your behalf in

the event of your incapacitation.

We should point out the fact that the “durable” designation is significant,

because a power of attorney that is not durable would no longer be in effect if

the grantor was to become incapacitated.

Is Incapacity Planning in Northern California Really Important? www.norcalplanners.com 6

FINANCIAL MATTERS

Your incapacity plan should also address financial decision-making. If you

use a revocable living trust as the centerpiece of your estate plan, you could

empower a disability trustee to administer the trust if you ever become unable to

handle the tasks on your own.

Another option would be the execution of a durable financial power of

attorney. The agent that you choose would be able to handle your financial

affairs if you ever become incapacitated.

SUMMARY

A comprehensive estate plan will go beyond the facilitation of postmortem

asset transfers. You

should also address

potential end-of-life

contingencies when you

are devising your plan.

With an advance

health care directive, you

can record your life

support preferences so

that you can be certain

that your own wishes will

be carried out if you are ever unable to communicate in real-time. Provisions can

also be added to name hand-picked decision-makers to handle your medical

decsions in the event of your incapacitation.

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With either a living trust or financial power of attorney, your financial

affairs can also be addressed.

Action is required if you are unprepared for these eventualities. If you set

up a consultation with an experienced and qualified estate planning attorney,

you can embed a sound incapacity plan within a broader, comprehensive estate

plan.

REFERENCES

American Bar Association

http://www.americanbar.org/groups/law_aging/resources/health_care_decision_

making/consumer_s_toolkit_for_health_careadvance_planning.html

Alzheimer's Association

http://alz.org

http://www.americanbar.org/groups/law_aging/resources/health_care_decision_making/consumer_s_toolkit_for_health_careadvance_planning.htmlhttp://www.americanbar.org/groups/law_aging/resources/health_care_decision_making/consumer_s_toolkit_for_health_careadvance_planning.htmlhttp://alz.org/

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About the Author

Timothy P. Murphy

Timothy P. Murphy is an estate planning and elder law attorney whose practice emphasizes helping people to build, preserve and pass on their wealth. He works with his clients to accomplish their goals while avoiding unnecessary court proceedings and minimizing or eliminating exposure to death taxes. Mr. Murphy also assists families facing the myriad of problems associated with dealing with a loved one’s declining

health and rising needs for care. He has practiced law in the Sacramento area for over 33 years, first with a large firm, and then with his own firm since 1987.

Tim has written a regular column on legal issues for Senior Magazine. He also was a regular featured guest on the Money Experts radio program heard locally on KFBK (AM 1530). Tim has been featured in the Sacramento Bee, Sacramento Business Journal, Sacramento Magazine, Comstock’s Magazine and other publications on estate planning and related topics. He also assisted local Channel 3 (KCRA) in an investigative report on the trust mill problem in the Sacramento area and was featured on Channel 10 (KXTV) in its series on personal financial planning.

Northern California Center for Estate Planning and Elder Law www.norcalplanners.com SACRAMENTO 2277 Fair Oaks Boulevard Suite 320 Sacramento, CA 95825-5599 Phone: (916) 437-3500 ROSEVILLE 3017 Douglas Blvd. Ste. 300 Roseville, CA 95661 Phone: (916) 437-3500

http://www.norcalplanners.com/