When we think of estate planning, we ask ourselves: What happens if I die? Certainly, this is a very important question. While failing to plan for death can cause terrible consequences, failing to plan for disability could be even worse.
An even more important question is: What happens if I become disabled? Each year, countless Americans become disabled through injury, disease, or advanced age. According to the Disability Statistics Center of the University of California at San Francisco, “[t]he proportion of the U.S. population with disabilities has risen markedly during the past quarter-century.” The Disability Statistics Center attributes this marked rise to the demographic shift toward an aging population over the past 25 years. This aging trend is expected to continue or accelerate over the next 25 years. The life expectancy of the average American has risen steadily and, at age 76.7, it has never been higher. According to Health, United States, by the National Center for Health Statistics of the U.S. Department of Health and Human Services, it is expected that the percentage of Americans living past the age of 65 will increase by over 50% by 2030.
Disability is never easy. Becoming disabled without proper planning can be a nightmare involving family disputes and court involvement. Following are some commonly asked questions about disability:
Q. Who will decide where I live?
A. A local judge would have to appoint a Guardian who would make that decision. Of course, the judge may not choose the same person you would have chosen.
Q. Who will decide medical treatment issues?
A. Depending on the state, if your family members agree, they can make that decision. However, if family members disagree, you could be back with the local judge getting a Guardian appointed.
Q. If I have no chance of recovery, will I be kept on life support?
A. Unless you have planned properly, you probably will be kept on life support. In most states, you will be kept on life support unless there is clear evidence you expressed wishes to the contrary; usually this requires something in writing.
Q. How will my bills get paid?
A. Your family or friends must go to your local court and have someone appointed your Guardian. Again, this judge probably does not know you and may not appoint the same person you would choose. In the appointment process, people must testify in open court that you do not have the ability to care for yourself. It can be draining financially and emotionally. Your Guardian would have to report to the court for as long as you are disabled.
Q. What happens if my investments need to be changed quickly due to market conditions or to reflect new circumstances and risk tolerance?
A. A court would have to appoint a Guardian. Nobody but the Guardian would be able to act for you.
Q. What happens if my son needs his tuition paid while I’m disabled?
A. Again, if you haven’t planned, nobody can act for you until the court appoints a Guardian for you. If bills, such as your son’s tuition, need to be paid in the interim, a friend or family member would have to use their savings or borrow to pay the bill.
Q. How will my income tax return get filed?
A. If you are single, only your Guardian would have that authority.
While you cannot eliminate the risk of disability, planning can eliminate the uncertainties and make it easier on everyone involved. A Revocable Living Trust allows a Successor Trustee to step in and change your investments quickly and easily. If needed, the Successor Trustee can sell assets and pay medical and other bills. No Guardian is needed, nor is there a need for the court to be involved.
A General Durable Power of Attorney complements the Revocable Living Trust and allows your Agent to transfer any overlooked assets into the trust. Further, your Agent can act for you to sign tax returns and other documents. Typically, your Agent would have the authority to decide where you live. A Health Care Power of Attorney designates someone to make health care decisions for you. That document also expresses your desires regarding life support.
A Revocable Living Trust, a General Durable Power of Attorney, and a Health Care Power of Attorney, prepare you for any disability and make decisions easier on you, your family, and your friends.
A qualified attorney, one who specializes in estate planning, can help you plan for disability.
Ronald “Chip” Morrison, Jr. is a Board-Certified Specialist in Estate Planning and Administration by Louisiana Board of Legal Specialization and a member of the American Academy of Estate Planning Attorneys. He has been engaged in Louisiana trusts and estate law for the last 17 years. Our firm serves clients throughout southern Louisiana. To learn more about how you can achieve your estate planning goals, please call (504) 831-2348 or visit our website at www.morrisonlawplc.com.
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