When you’re healthy, it’s hard to imagine being unhealthy. But it happens; in fact, if you’re in your thirties or forties, you are three times more likely to become incapacitated in any one year than to die. Incapacity refers to the inability to provide informed consent for medical decisions; it also refers to the inability to manage your finances and make day-to-day personal business decisions.
Incapacity can be caused by a car accident, work accident, medicine overdose, stroke, head injury, dementia, and the like. Incapacity can be temporary or permanent. And, if you don’t have your own incapacity plan in place, a court will likely take over and create a plan for you. The court’s plan may not be what you would want.
For example, if you are incapacitated for more than a brief period and you don’t have your own plan in place, a court will hold a conservatorship proceeding. The court will hear evidence as to your capacity and determine whether you have legal capacity, or not. If it determines that you do not (even in some cases where you object), the court will appoint a conservator to make medical decisions on your behalf and a conservator to make financial decisions on your behalf. The court will oversee the ongoing conservatorship.
Conservatorships are a total loss of control and are very expensive. The court takes charge and may appoint a stranger, not necessarily a family member, to manage your assets and handle your financial decisions. Conservatorships are expensive because you need to pay court fees, conservator fees, medical witness fees, and, likely, two attorneys’ fees (one attorney for you and one for the family.) Fees are ongoing because the court continues supervision.
A comprehensive incapacity plan in California includes an advance health care directive, living, HIPAA release, and organ donation authorization for health related issues. It also includes a financial power of attorney and/or a revocable living trust. If you don’t have these incapacity planning documents, or if your documents are more than a few years old, consult with a qualified and experienced estate planning attorney.