One of the most common client questions is why they need to plan at all. With estate taxes at comfortable limits (For 2013, $5.25M) the reasons for planning may seem murkier. Incapacity planning is one increasingly important reason to consider. With individuals living longer, with estimates of 84-86 for adults reaching age 65 today, it is increasingly likely that incapacity issues will be experienced.
What is Incapacity Planning?
Incapacity occurs when an individual is physically or mentally unable to do certain things or manage their affairs. This could happen because of Alzheimer’s, dementia or other similar circumstances. Unfortunately, if individuals and their families delay advance incapacity planning they may face serious and costly consequences. Families should watch for early warning signs and plan properly to avoid later headaches.
If an adult is incapacitated, they will no longer be able to execute documents. Without proper documents, like a living trust or power of attorney, Arizona families may be forced to go to Probate Court to obtain guardianship or conservatorship authorities over their loved ones. This may result in time delays and avoidable expenses.
A recent media story highlights one potential impact of failing to have plans in place. If a couple seeks a reverse mortgage, in community property states like Arizona, both spouses will be required to sign; this may prove a significant hurdle to overcome if one spouse is dealing with dementia. Without proper planning, the caretaking spouse may have difficulty signing documents or executing the reverse mortgage.
At Estrada-Legal, PC we believe your family is your most important asset. Contact us to discuss how we can plan for you and your family.