Brrr! It’s cold out there. All the more reason to stay inside and take care of indoor projects. This week I enjoyed the warmth of my office while I listened to a webinar presentation about helping clients plan for possible incapacity. I found the facts and figures to be staggering. The surprising statistics on incapacity:
- Stroke and Alzheimer’s disease are the 5th and 6th highest causes of death in the U.S.
- Alzheimer’s affects 1 in 9 people over the age of 65.
- Stroke is a leading cause of long-term disability
- 34% of people hospitalized in 2009 for stroke were younger than 65 years of age.
- 49% of all Americans have at least one risk factor for stroke (e.g., high blood pressure, high cholesterol, smoking, atrial fibrillation)
I never realized how many people struggle with this.
I was also struck by a review of Powers of Attorney, where an individual, the Principal, gives an Agent the authority to do things for him or her. Contrary to what many people think:
- Having a Power of Attorney designation in place does NOT remove rights from the Principal.
- The Agent cannot overrule the Principal.
- Third parties may complain that the Power of Attorney is not “fresh” enough – that it was signed more than a couple of years before it is being used.
For example, if I am the Agent for my Granny and she is writing checks willy-nilly, I can talk to her to suggest that, as her Agent, I take over check writing. If she wants to write checks, however, as her Agent I cannot prevent her from writing checks. The Power of Attorney does not take away any of her rights.
Often the onset of Alzheimer’s Disease or dementia is gradual and the person does not realize that they are impaired or incapacitated, so they resist giving their Agent the authority to help them. If the Agent (or someone else) feels that the Principal’s behavior is detrimental to themselves or others and wants to take power away from the Principal, they may need to pursue a Guardianship proceeding.
One of the ways to address incapacity planning is with trusts. First, the principal chooses the rules that will decide when he or she is incapacitated. Then, if and when these are triggered, the incapacity plan of the trust (a revocable living trust) goes into effect.
As the article below goes into more detail, having a trust as part of your plan is not about being rich. It is about a plan that takes care of you and your family in the ways that you want…a comforting thought for a very cold time of year.