The Truth Behind Disability Planning
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 client’s perspective, disability planning should take precedence over estate planning since it directly benefits the client and because the chances 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 estate planning firm might continue to assist them in managing their assets and providing for themselves and their dependents.
When a client is intellectually incapacitated to the extent of being unable to make business or personal care choices or physically crippled to the point of being unable to convey 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 declared incapable, the court may take away their power to make personal and commercial choices and appoint someone else to do so under the supervision of the court. The elder law services ensure your long term care includes asset protection.
Probate is often thought of as the legal process of transferring assets from a deceased person’s name to a beneficiary or heirs. A “live probate” is a kind of probate court hearing that takes place in real-time.
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 business operations and there are commercial difficulties to be resolved. The guardian or conservator will be required to deposit 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.
Even though incapacity before death is rare, it should be taken seriously. Advisors should treat disability planning in the same way that estate planning is approached, emphasizing to their clients the importance of preparing for the future as well as the hereafter. The greatest way to prepare customers is to work cooperatively with all wealth planning specialists. During the planning phases, the client’s handicap, and after the client’s death, having a clear knowledge of each other’s tasks and a close connection with the client is critical.