When people find out that I am estate planning attorney I sometimes get the reaction that I am a tax attorney. Tax planning is an important part of estate planning, and it has implications in multiple places in the planning world, but it is not the core of estate planning. I tell people that estate planning is planning for when somebody else decides. When you are no longer in charge of your affairs you will want to be in charge of who does manage them. You will want them to have the necessary tools to do the job, and you will want to establish some rules and guardrails to ensure that your goals are fulfilled by them. You will want this to be organized in a fashion which doesn’t leave a mess, and allows for the efficient management of your affairs by this other person. That’s estate planning.
When will you no longer be in charge? Either at your death or your incapacity. Indeed, estate planning is as much about planning for incapcity as for your death. Death is certain, incapacity is not, but I actually find incapacity more concerning that death. As an estate planning attorney, I encourage my clients to plan for the very real possibility that they will snot be in charge of their own affairs at some point in their life. This has implications not only for you, but for the people who rely on and love you.
So, Just as they plan for their eventual death, they should also plan for incapacity. When we discuss incapacity planning, however, my clients often want to know who decides when a person is incapacitated and how that decision is made.
Incapacity Does Not Discriminate
All too often, when people think about the possibility of becoming incapacitated, they immediately associate that possibility with old age. While the natural aging process itself, helped along by conditions such as Alzheimer’s disease, can result in incapacity, you do not have to be a senior to end up incapacitated. On the contrary, incapacity can strike anyone at any age because of a workplace injury, a serious illness, or even a car crash. To help you understand the need to plan for the possibility of your own incapacity, consider the following facts and figures:
- Just over 1 in 4 of today’s 20-year-olds will become disabled before they retire
- In December of 2012, there were over 2.5 million disabled workers in their 20s, 30s, and 40s receiving SSDI benefits.
- A typical 35-year-old has a 24% chance of becoming disabled for 3 months or longer during his/her working career.
Who Decides the Issue of Incapacity If Someone Petitions to Be My Guardian?
The decision as to whether you are incapacity comes upon in a variety of contexts. I might be in a guardianship proceeding, in which a Guardian is be appointed to make personal decisions for you, to take over control of your estate assets, or both. For a Guardian to be appointed, a court must make a determination of incapacity and will be guided by statute in making this decision. North Carolina General Statutes § 35A-1101(7) defines incapacity as:
“An adult or emancipated minor who lacks sufficient capacity to manage the adult’s own affairs or to make or communicate important decisions concerning the adult’s person, family, or property whether the lack of capacity is due to mental illness, intellectual disability, epilepsy, cerebral palsy, autism, inebriety, senility, disease, injury, or similar cause or condition.”
In a guardianship proceeding, it will be up to the judge to make the determination of incapacity after listening to testimony and reviewing any evidence introduced during a hearing on the matter.
Who Decides Incapacity in Order to Use the Authority Granted in an Advance Directive for Health Care?
Another situation in which the finding of incapacity is required is when someone wants to invoke the authority to make health care decisions for you or implement the instructions you might have left in Living Will or other advance directive. An “advance directive” is a legal document through which you may provide your directions or express your preferences concerning your health care and/or to appoint someone to act on your behalf. Physicians and others use them when you are unable to make or communicate your decisions about your medical treatment.
North Carolina recognizes two types of advance directives. The first is a North Carolina Health Care Power of Attorney which allows you to appoint someone, referred to as your “Agent,” to make health care decisions for you if you cannot make them because of your incapacity. In North Carolina, the Health Care Power of Attorney is a separate document from your Durable General Power of Attorney (which controls financial and legal matters). A North Carolina Health Care Power of Attorney goes into effect “when your doctor determines that you are no longer able to make or communicate your health care decisions.” The statutory form North Carolina Health Care Power of Attorney allows you to designate a specific physician who will make this decision, but defaults to your attending physician in the absence of a designation. At Clarity Legal Group we recommend our clients rely on the attending physician, just as a matter of practicality.
The second type of advance directive is a North Carolina Advance Directive for a Natural Death which is North Carolina’s version of a Living Will This document lets you state your wishes regarding the withholding and withdrawing of life-prolonging measures in the event that you can no longer make your own health care decisions and you are terminally ill, permanently unconscious, or suffer from advanced dementia or other irreversible loss of cognitive ability. This document goes into effect when “your doctor determines that you cannot make or communicate your health care decisions and you have one of the conditions that you indicate should trigger your declaration.” This literally overlaps with the Health Care Power of Attorney criteria.
Who Decides Incapacity under a General Durable Power of Attorney or Trust Agreement?
If you reach the point that you are no longer able to take care of your affairs, good planning will have included a General Durable Power of Attorney and perhaps a Living Trust as means to allow another person to manage your affairs. Both of these documents include criteria for establishing your incapacity which are more or less contractual in nature. You, working with your attorney, can decide what constitutes incapacity and thus allows your designated agent under the Power of Attorney and also your Successor Trustee to take over. The options range from requiring no proof of incapacity to requiring the certification of multiple physicians that your are incapacitated and a lot of options in between,
At Clarity Legal Group we also encourage clients to consider whether they want their lawyers to serve as a gate keeping for the making of these decisions and if so, to provide us written instructions which serve as a guide for us in performing this service.
Contact Durham Incapacity Planning Attorneys
As I look back on what I have written above, I feel as if I may have raised as many questions as I have answered. If you have additional questions or concerns regarding incapacity planning within your estate plan, andyou reside in North Carolina and particularly in the Raleigh, Durham and Chapel Hill areas contact the estate planning attorneys at Clarity Legal Group by calling us at 919-484-0012 or contactus online.