None of us know when we may become incapacitated, or die, but we do know that death is coming for us all, eventually. This is just one reason to plan ahead. There is another great reason to get your preferences clearly stated in writing; incapacity happens to many of us once we reach a certain age.
As San Diego Judge Julia Kelety said recently, “Capacity is a moving target”, and incapacity can be caused temporarily by dehydration, or infection, or permanently by damage to your brain. Whether incapacity is temporary or permanent, the incapacitated individual doesn’t know they are incapacitated. This means that you could become incapacitated and not know the extent to which your judgement and ability to process new information are compromised.
Your estate plan is a tool with many purposes the primary of which is for you to stay in control when the challenges of life come. If you don’t explore the “what ifs”, and get your preferences into writing [What if I am incapacitated and can no longer pay my own bills, or do my own grocery shopping?], then you might find yourself being managed and protected by a court procedure called “Conservatorship” (this is called Guardianship in every state except California).
You may have heard about Britney Spears and her Conservatorship. Her father served as her Conservator for many years, and recently, after a lot of pressure, he stepped down. At this writing, I believe her Conservatorship has been terminated. How does anyone get “Conserved” in the first place? They exhibit self-destructive behavior resulting in being a danger to themselves or others, or they have become uncooperative and extremely vulnerable.
We all have the right to pursue happiness, even if that means gambling all of it away, or giving away your funds to new friends. When you are a danger to yourself and others, or you are particularly vulnerable, someone in your life may approach the court and ask that a Conservatorship be set up to protect you.
As an example, a young person, disabled since birth, may have parents who wish to continue caring for him after he turns 18. These parents then hire an attorney and petition the court to be the Conservators for their son. Conservatorship is a complex process, including an investigation by the court, and an appointment of a Guardian Ad Litem (a court appointed attorney for the purpose of advocating for the disabled son) who will look into the best interest of the son. It can take months, or years for such a Conservatorship to be established, and then the financial and medical life of the Conservatee (the son in this example) may be court supervised for decades. There is much more to know and understand about Conservatorship, which this blog post will not cover.
For someone who is able (competent, has capacity, in their right mind, etc.), planning ahead can prevent Conservatorship. If you have created an estate plan (please work with a qualified estate planning attorney), you will have selected the person(s) who will be responsible for you when you can no longer be responsible for yourself. Not only will this person be personally liable for making sure all your bills get paid, they will also be responsible for accounting for all you have and where it goes. This responsibility extends to how they communicate with your beneficiaries, and tax, legal, financial, and perhaps, medical, professionals. This person will have certain duties based on what your estate planning documents say and what is in the law. You can learn more by reading Ethics for Trustees 2.0.
You may assume that a family member, or friend, will just step in to do this work for you, but they still need legal authority either granted by you through your estate plan documents, or through the Probate Court. Getting an estate plan is much less costly than a Probate procedure, and you have the advantage of keeping your affairs private. Hopefully, you’ll avoid being Conserved, too.
Marguerite Lorenz, CTFA, CLPF is a Master Trustee and a Managing Partner at Lorenz Private Trustees (MyTrustee.net) and has served as a Trustee and Executor since 2003.