The most neglected aspect of estate planning is preparing for the potential of incapacity. While many individuals consider estate preparation in the event of death, just a small percentage consider disability planning. From the customer’s perspective, disability planning should take precedence over estate planning since it directly benefits the customer and because the possibilities of being disabled in the next year outweigh the chances of dying in that time until a person is far into retirement age.
Making Provisions for Disabilities
The client’s disability planning partners can assist them in managing their assets and ensuring that they and their dependents are well-provided for.
When a client is mentally ill to the extent of being unable to make business or personal care choices, or physically incapacitated to the point of being unable to communicate instructions for the administration of their affairs, disability planning is necessary. When a medical professional determines that a person lacks the mental capacity to make business or personal care choices, they are deemed incompetent.
When a court determines that a person is legally incapable of making commercial or personal care choices, they are referred to as incompetent. When someone is found incompetent, the court may take away their power to make personal and commercial choices and appoint someone else to do so under the court’s supervision.
Probate is the legal process of transferring assets from the name of a dead individual to the names of a beneficiary or heirs. A “live probate” is a kind of probate court hearing that takes place in real-time. Your elder care lawyer can ensure that your rights and interests are protected.
A person who is suspected of being mentally ill and unable to handle their affairs is granted living probate. Someone files a lawsuit against them in probate court, asking the judge to take away their power to make medical and/or commercial choices and transfer it to someone else. It’s a costly procedure in which the individual accused of incompetence pays both sides’ attorneys.
The court will appoint a guardian or conservator if a person is considered incapable of managing their own business operations and there are commercial issues to be addressed. The guardian or conservator must post a bond to safeguard the estate from theft or mismanagement, as well as provide a full accounting to the court for auditing on a regular basis.
Despite the fact that death-related impairment is rare, it should be taken seriously. Advisors should approach disability planning in the same way they do estate planning, emphasizing to clients the need to prepare for the now as well as the future. The best way to prepare customers is to work together with all the wealth planning specialists. Throughout the planning phases, the client’s disability, and after the client’s death, having a clear knowledge of each other’s tasks and a close connection with the client is critical.