is incapacity planning in northern california really important
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Is Incapacity Planning in Northern California Really Important? www.norcalplanners.com 1
IS INCAPACITY PLANNINGIN NORTHERN
CALIFORNIA REALLY IMPORTANT?
“Your incapacity plan should also address financial decision-making. If you use a revocable living trust as the centerpiece of your estate plan, you could empower a disability trustee to administer the trust if you ever become unable to handle the tasks on your own.”
TIMOTHY P. MURPHY NORTHERN CALIFORNIA CENTER FOR ESTATE PLANNING AND ELDER LAW
Is Incapacity Planning in Northern California Really Important? www.norcalplanners.com 2
When you are going through life as a relatively healthy adult, the prospect of
incapacity can seem alien to you. Of course we all recognize the fact that elders
sometimes become unable to handle all their own affairs, but it can seem like
this only happens to a small minority.
While it is not a very pleasant prospect consider, the facts tell a different tale.
Many people need help with their day-to-day needs because of physical
limitations, and this is certainly part of the equation. However, in many cases,
the individuals in question can make sound decisions on their own, and they
simply need help with certain activities.
Is Incapacity Planning in Northern California Really Important? www.norcalplanners.com 3
At the same time, there are those who do become incapacitated physically, and
mental incapacitation can also enter the picture. When it comes to mental
incapacity, Alzheimer's disease looms large.
You can learn a lot about Alzheimer's disease if you explore the Alzheimer's
Association website. They devote a lot of time, energy, and expertise to the
subject, and their work is very valuable.
According to the website, this disease strikes approximately 45 percent of
the oldest old. This term, “oldest old,” is used to describe people who are at least
85 years of age.
If you are thinking that
only a small percentage of
people live to this age, you
should understand some
longevity data. The Social
Security Administration has a
life expectancy calculator on
its website. Using the tool, if
you were to celebrate your 67th birthday today, your life expectancy would be
85 years of age or older depending on your gender.
As you can see from the statistics, if you live long enough to collect Social
Security, and most of us expect to do so, it is likely that you will reach your mid-
eighties and perhaps beyond. Alzheimer's is a looming threat for the oldest old,
and there are other causes of incapacitation.
Is Incapacity Planning in Northern California Really Important? www.norcalplanners.com 4
ADVANCE DIRECTIVES FOR HEALTH CARE
To prepare for possible latter life incapacity, you can devise an incapacity
plan that addresses the contingencies that you may face. Advance directives for
health care will be part of the plan.
One part of a California advance health care directive is a living will.
Doctors can sometimes use life-sustaining measures like artificial nutrition and
hydration and mechanical respiration to keep terminal patients alive indefinitely.
Many people would prefer to refuse these measures, and others would accept
them.
The decision is something that each person should make individually. When
you execute an advance health care directive in California, you can state your life
Is Incapacity Planning in Northern California Really Important? www.norcalplanners.com 5
support preferences, and doctors would be compelled to follow your instructions
if a life-support scenario should present itself.
Another aspect of an advance health care directive in California us the
health care proxy or durable power of attorney for health care. This section is
used to empower a representative to make medical decisions on your behalf in
the event of your incapacitation.
We should point out the fact that the “durable” designation is significant,
because a power of attorney that is not durable would no longer be in effect if
the grantor was to become incapacitated.
Is Incapacity Planning in Northern California Really Important? www.norcalplanners.com 6
FINANCIAL MATTERS
Your incapacity plan should also address financial decision-making. If you
use a revocable living trust as the centerpiece of your estate plan, you could
empower a disability trustee to administer the trust if you ever become unable to
handle the tasks on your own.
Another option would be the execution of a durable financial power of
attorney. The agent that you choose would be able to handle your financial
affairs if you ever become incapacitated.
SUMMARY
A comprehensive estate plan will go beyond the facilitation of postmortem
asset transfers. You
should also address
potential end-of-life
contingencies when you
are devising your plan.
With an advance
health care directive, you
can record your life
support preferences so
that you can be certain
that your own wishes will
be carried out if you are ever unable to communicate in real-time. Provisions can
also be added to name hand-picked decision-makers to handle your medical
decsions in the event of your incapacitation.
Is Incapacity Planning in Northern California Really Important? www.norcalplanners.com 7
With either a living trust or financial power of attorney, your financial
affairs can also be addressed.
Action is required if you are unprepared for these eventualities. If you set
up a consultation with an experienced and qualified estate planning attorney,
you can embed a sound incapacity plan within a broader, comprehensive estate
plan.
REFERENCES
American Bar Association
http://www.americanbar.org/groups/law_aging/resources/health_care_decision_
making/consumer_s_toolkit_for_health_careadvance_planning.html
Alzheimer's Association
http://alz.org
Is Incapacity Planning in Northern California Really Important? www.norcalplanners.com 8
About the Author
Timothy P. Murphy
Timothy P. Murphy is an estate planning and elder law attorney whose practice emphasizes helping people to build, preserve and pass on their wealth. He works with his clients to accomplish their goals while avoiding unnecessary court proceedings and minimizing or eliminating exposure to death taxes. Mr. Murphy also assists families facing the myriad of problems associated with dealing with a loved one’s declining
health and rising needs for care. He has practiced law in the Sacramento area for over 33 years, first with a large firm, and then with his own firm since 1987.
Tim has written a regular column on legal issues for Senior Magazine. He also was a regular featured guest on the Money Experts radio program heard locally on KFBK (AM 1530). Tim has been featured in the Sacramento Bee, Sacramento Business Journal, Sacramento Magazine, Comstock’s Magazine and other publications on estate planning and related topics. He also assisted local Channel 3 (KCRA) in an investigative report on the trust mill problem in the Sacramento area and was featured on Channel 10 (KXTV) in its series on personal financial planning.
Northern California Center for Estate Planning and Elder Law www.norcalplanners.com SACRAMENTO 2277 Fair Oaks Boulevard Suite 320 Sacramento, CA 95825-5599 Phone: (916) 437-3500 ROSEVILLE 3017 Douglas Blvd. Ste. 300 Roseville, CA 95661 Phone: (916) 437-3500
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