You may view estate planning as a purely financial endeavor. Indeed, it is important to facilitate a smooth and efficient transfer of assets to your loved ones after you pass away.However, there are some other things to consider as well. One of these would be incapacity planning.
Have you ever asked yourself who would manage your property in the event of your incapacitation? If you do nothing to name your own financial decision-maker, people who have an interest in your affairs could petition the court to appoint a conservator to act in your behalf.
In the state of Iowa a conservator is an individual who can be appointed by the court to handle the financial affairs of a ward. A guardian would make decisions with regard to the ward’s care.
There are a few reasons why you would want to engage in incapacity planning to avoid a conservatorship hearing. For one, you as the person who may no longer be able to make sound decisions will have no say in the matter. The court will decide who takes over control of your finances.
In addition to this, there is no guarantee with regard to concurrence among your family members with regard to whom the conservator should be.
Thirdly, the need for an immediate decision maker may exist. It may take some time for the court to appoint a conservator, especially if the matter is being contested.
Alternatives for Property Management
It is possible to arrange for future asset distributions to your heirs through the creation of a revocable living trust. The primary reason why people use these trusts is to enable transfers of assets outside of the costly and time-consuming process of probate.
However, there is an incapacity planning advantage that goes along with the creation of a revocable living trust. When you create the trust terms you can name a disability or successor trustee. This individual or entity would administer the trust in the event of your incapacitation.
Another way to empower someone of your own choosing to manage your property would be to execute a durable power of attorney. With this legal device you name an agent or attorney-in-fact. This representative will be able to act in your behalf in a legally binding fashion if you were to become incapacitated at some point in time.
With these incapacity planning instruments it is important to recognize the operative term “durable.” A standard power of attorney that is not durable would no longer remain in effect if the grantor or principal was to become incapacitated. Durable powers of attorney do in fact remain in effect upon the incapacitation of the grantor.
This post should provide you with a brief overview. If you have questions about incapacity planning, don’t hesitate to contact our firm to request a free consultation.