Smart advance planning can help preserve family assets, provide for your own well-being and eliminate the stress and publicity of a guardianship hearing, which might be needed if you do nothing.
A guardianship or conservatorship for an elderly individual is a legal relationship created when a judge appoints a person to care for an elderly person, who’s no longer able to care for herself.
The guardian has specific duties and responsibilities to the elderly person.
FEDweek’s recent article entitled “Guarding Against the Possibility of Your Incapacity” discusses several possible strategies.
Revocable (“living”) trust. Even after you transfer assets into the trust, you still have the ability to control those assets and collect any income they earn. If you no longer possess the ability to manage your own affairs, a co-trustee or successor trustee can assume management of trust assets on your behalf.
Durable power of attorney. A power of attorney (POA) document names an individual to manage your assets that aren’t held in trust. Another option is to have your estate planning attorney draft powers of attorney for financial institutions that hold assets, like a pension or IRA. Note that many financial firms are reticent to recognize powers of attorney that are not on their own forms.
Joint accounts. You can also establish a joint checking account with a trusted child or other relative. With her name on the account, your daughter can then pay your bills, if necessary. However, note that the assets held in the joint account will pass to the co-owner (daughter) at your death, even if you name other heirs in your will.
There may also be health care expenses accompanying incompetency.
This would include your health insurance and also potentially disability insurance in the event your incapacity should happen when you are still be working, and long-term care insurance, to pay providers of custodial care, at home or in a specialized facility, such as a nursing home.