incapacity planning in missouri
TRANSCRIPT
Incapacity Planning in Missouri www.yourestatematters.com 2
Estate planning should encompass more than just deciding who will receive your estate
assets when you die. Incapacity planning, for example, is something that should also be
included in any comprehensive estate plan. Tragedy can strike at any time, leaving you
unable to make important decisions and unable to manage your assets. If that happens,
who will make those decisions for you? Who take over control of your finances and
assets?
Absent an incapacity plan, the answer to those questions may be decided by a court of
law. By including an incapacity plan within your overall estate plan you are able to decide
for yourself who will make decisions for you as well as who will control your assets
should you be unable to do so at some point in the future.
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How Is Incapacity Defined in Missouri?
“Incapacitated” is often used to refer
to someone who is temporarily or
permanently unable to handle basic
tasks. The law, however, has a very
specific definition for the term
“incapacitated person”. According to
Missouri’s Probate Code, Section
474.410, and “incapacitated person
is:
"one who is unable by reason
of any physical or mental condition to receive and evaluate information or to
communicate decisions to such an extent that he or she lacks capacity to meet
essential requirements for food, clothing, shelter, safety or other care such that
serious physical injury, illness, or disease is likely to occur. The term "incapacitated
person" as used in this chapter includes the term partially incapacitated person
unless otherwise specified or apparent from the context;”
How Likely Are You to Suffer an Incapacity?
People frequently make the mistake of assuming that incapacity only happens to the
elderly. The truth, however, if that you could become incapacitated tomorrow as the
result of a serious accident or debilitating illness. In fact, you stand a one in five chance
of suffering a period of incapacity that is severe enough to keep you from being able to
work before you reach age 65. As you enter your “golden years”, your odds of becoming
incapacitated to the point of needing long-term care increase to one in two and jump to
three in four by age 85. Alzheimer’s and other age related dementia diseases are a
common cause or incapacity in the elderly. One in three older Americans dies with
Alzheimer’s or another form of dementia. Taken together, these statistics tell us all that
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the longer we live the higher the probability of suffering a temporary or permanent
period of incapacity.
What Can Happen without An Incapacity Plan?
To understand why incapacity planning is so important you need to first understand
what could happen absent a plan. Although you may have planned for the possibility of
your death by creating a Last Will and Testament, those plans will provide no guidance
should you become incapacitated because your Will only takes effect upon your death.
Imagine, therefore, that you are involved in a tragic accident tomorrow that leaves you
in a coma. Your sudden incapacitation can cause a number of dilemmas and legal
problems, including:
Medical decisions –who will make healthcare decisions for you? Absent an
advanced directive indicating what your wishes are and whom you wish to make
decisions for you it may be necessary to petition a court to determine who will
make decisions for you.
Asset management –who will manage and control your assets? Someone will
need to pay your bills, take care of your property, and monitor investments and
financial accounts. This too may require petitioning a court if you did not plan
ahead. If more than one individual seeks the right to control your assets and/or
make decisions for you a costly and adversarial court battle could ensue, causing
an irreparable rift in your family.
Guardianship of minor children – who will care for your children? If the children’s
other parent is unable, or unwilling, to step in a court will also have to make this
decision – without your input if you failed to create an incapacity plan.
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Selecting Your Executor, Trustee and Other Important Roles
The overall success of any estate plan depends on the initial design of the plan and the
ultimate implementation of the plan. The most well designed plan can fall apart if the
wrong people are left to implement the plan. For this reason, care should be taken when
choosing important roles within your plan, such as:
Executor – your Executor is responsible for probating your estate after your death
and is named in your Last Will and Testament. People often make the mistake of
naming someone to this role without giving much thought to the duties and
responsibilities involved in the position of Executor. The Executor opens and
closes the probate of your estate and oversees everything in between, including
the location and valuation of all estate assets, preparation of all probate
documents, notification to all beneficiaries and creditors of the estate and
defending the estate against challenges. The executor is also responsible for
paying any taxes owed by the estate which may require the sale of estate assets.
Not only is the role of Executor a time consuming role, but it can be emotionally
draining for a spouse, parent or child who is still grieving a loss. Keep all of this in
mind when selecting an Executor.
Trustee – if you create a trust in your estate plan you must appoint a trustee. This
can be an individual or entity and may be someone you know personally or a
professional. The trustee is responsible for administering the trust as well as
managing and investing assets held by the trust. Ideally, a trustee should have
experience in money management and/or investing as well as a basic knowledge
of the laws that apply to trusts. Although you can appoint a close family member
or loved one as your trustee, it is frequently better to consider a neutral third
party professional trustee to decrease the chance of a conflict arising down the
road and increase the chance that the trust assets will grow at a better than
average rate.
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Guardian –should something happen to you, and your minor child’s other parent
is unable or unwilling to care over the care of your child, a court will have to
appoint a guardian. Your Will is your only opportunity to let the court know who
your choice is for guardian of your child.
Agent – an Agent is someone to whom you grant authority in a power of attorney
or advanced directive. As your Agent, the individual has the power to make legal
decisions for you and/or healthcare related decisions to the extent authorized in
the POA or AD. Given the authority granted to an Agent, care should be taken
when choosing one.
Selecting Your Executor, Trustee and Other Important Roles
The good news is that by including an incapacity plan within your overall estate plan you
can avoid the above-mentioned unwanted consequences. Your incapacity plan should be
created with the assistance of an experienced Missouri estate planning attorney and will
be as unique as you are. Some common incapacity planning tools though include:
Power of attorney – a power of attorney gives your Agent the authority to act on
your behalf in legal matters. The authority you grant is up to you. If made durable,
a POA survives your incapacity.
Joint ownership – titling property jointly gives a c-owner access to the property;
however, the property cannot be sold or encumbered without your consent.
Revocable living trust –an extremely popular incapacity planning tool, a revocable
living trust allows you to appoint yourself as the trustee while appointing a spouse
or other loved one as the successor trustee. Most, or all, of your assets are then
transferred into the trust. As trustee, you maintain control over the assets unless
you become incapacitated at which point control of the trust (and therefore all
assets held in the trust) automatically transfers to the successor trustee.
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To ensure that your wishes are honored and that your assets are protected in the event
of your incapacity it is best to sit down with your Missouri estate planning attorney and
develop an incapacity plan that will fit into your overall estate plan.
Missouri Revised Statutes, Section 474.410
Family Caregiver Alliance, Legal Issues in Planning for Incapacity
Alzheimer’s Association, Alzheimer’s Facts and Figures
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Estate Planning and Elder Law Attorneys in St. Louis, MO St. Louis Estate Planning Attorneys: Planning for Your Future Today
Missouri Estate Planning attorneys Amen, Gantner&Capriano, Your Estate Matters, L.L.C. are
here to help you with legal issues regarding St. Louis Elder Law, Veterans Aid and Assistance,
Probate, Wills, Trusts, Trust Administration, Powers of Attorney, Health Care Directives, LGBT,
and all things required to establish a proper estate plan for the future of both you and your loved
ones. Our law firm understands the varying dynamics of modern families and seeks to address
these issues in the estate plan so your estate is distributed only to those who you request, instead
of those who may be otherwise legally obliged to it. Estate planning can be a big project that
requires consistent maintenance; however, our professional Estate Planning attorneys can
organize all of the legal paperwork and logistics for you, while offering helpful legal advice along
the way.
Amen, Gantner&Capriano, Your Estate Matters, L.L.C. 10805 Sunset Office Dr., Suite #100
St. Louis, MO 63127 Phone: (314) 966-8077
www.YourEstateMatters.com