CHAUVEL & GLATT , LLP

Many view estate planning as planning their affairs after they pass away. While much of the work is geared towards that eventuality, an often less understood and important need requires planning for if and when you become temporarily or permanently incapacitated.

There are three general options for assistance to handle your financial affairs should you face this difficult but often likely situation.

The first option is unavoidable if you become incapacitated without properly executed documents within an effective estate plan. In this situation, someone will need to go to court to seek a Conservatorship on your behalf. A Conservatorship is a court-appointed individual that handles the affairs of an incapacitated person. The process is 1) time-consuming, delaying the ability to transact your business, 2) expensive, as it requires court and attorney costs, and 3) not guaranteed, as it is ultimately up to the court to decide whether the conservatorship is necessary and who is the best position to assume that role. If the court decides a conservatorship is necessary, the appointed conservator may not be the person you would not have wanted to handle your business.

The second option is often a component of an estate plan: a Durable Power of Attorney (“POA”). This is a document that names a person, who acts as your agent, and details what specific acts the agent is authorized to conduct on your behalf. A component of the POA allows you to determine when it would go into effect, whether immediately or upon a triggering event or determination, often by a one or several physicians. It is important this document is well drafted, customized, and in compliance, to be accepted by a financial institution. While there are specific laws which require financial institutions to accept a POA, delays can occur while that process plays out with non-compliant documents.

The third option, specifically related to property included in your living trust, is the appointment of a Successor Trustee. This role is assumed by a person you previously designate to immediately take over your trust management if you become incapacitated.

For many, it is practical and recommended to have both a POA agent and a Successor Trustee, as a Successor Trustee can only manage trust assets, and a POA agent can conduct business relating to non-trust assets and other financial matters.

Contact the Estate Planning Attorneys at Chauvel & Glatt to establish or update documents and determine the best option to ensure your affairs will be efficiently managed should you be unable to yourself.

This material in this article, provided by Chauvel & Glatt, is designed to provide informative and current information as of the date of the post. It should not be considered, nor is it intended to constitute legal advice.  For information on your particular circumstances, please contact Chauvel & Glatt  at 650-573-9500 for legal assistance near you.