Some Frank Thoughts On Planning For Incapacity

Waiting to Plan

In my years of estate and elder planning, clients have presented at various stages of life’s unfolding: marriage, birth of grandchildren, retirement, incapacity, death. Events welcomed or feared prompt clients to seek advice and the legal tools needed to navigate the passages. I admire those who have the foresight and the discipline to undertake this. But there are many, many more of us who do not take that step.

Most of us, I think, would rather wave off these thoughts and tend to the urgencies of daily life. Life planning is a chore that seemingly can be postponed until later. We would rather devote that time and money to living life rather than thinking about accidents, old age or other scary prospects. But my experience is that failure to plan will create emergencies for the family that could have been avoided in large part. A crisis can occur at anytime. We all think we have time, but not all of us do.

When a Crisis Occurs

The most familiar client comment I hear in an Elder Law crisis (as opposed to planning) conference is “We should have done this years ago”. The problem with waiting until a crisis looms is that it’s often too late. If no planning has been done, the questions erupt. Who is in charge? How do they get legal authority to act? How will medical services, nursing homes be paid for? How do you take care of an elderly parent who remains at home? The family scrambles to protect the patient’s health and finances. Everything is more complicated than they ever dreamed. Often there is needless expense and frustrating delay. Family relations may be harmed. The options for care may be limited and disappointing.

What is Involved in Planning

Once you prepare for these life events, you can put the nagging worry away. You can’t see into the future, but you can prepare for the journey. Your journey may be like a trip to Florida in the winter. You only need pack some light outerwear and probably a few heavier things in case of freakish weather. Or it may be more like a Himalayan expedition requiring extensive and sophisticated outfitting. Most of us are somewhere in between. But here’s the difficulty: Rarely do we know which journey will be ours.

My thought is that this old adage holds true in estate and elder planning: “Prepare for the worst and hope for the best”. Do you buy insurance for your house? Of course. What is the chance that your house will burn down compared to the chance you will need long term care in your home or in a facility in later years? Nursing home costs average about $6,000 to $7,000 a month and can easily wipe out life savings. I encourage my clients to purchase long term care insurance. But for those who don’t have that option, there are other solutions that must be addressed early on.

This planning is especially important for women. The statistics show that women are more likely to become a caregiver to a parent or spouse, with the attendant drains on energy, work, finances, and time. And a woman is more likely not to have a spouse to take care of her when she needs it. When I ask a couple about their plan for long term care, often the husband seems to be thinking “She is”. Funny, but telling.

Whatever your circumstances, you need these documents at a minimum: Will, Financial Power of Attorney, Health Care Power of Attorney and a HIPAA Waiver. You may need others, such as a revocable living trust, life insurance trust, caregiver agreements, promissory notes, deeds and so on. But the value is not in the documents so much as in the strategy, the plan. The documents allow the strategy to be implemented. If you go to the internet and download “forms”, you may have documents but you don’t have a plan, or more accurately you have someone else’s plan. This is intensely personal planning, and for the present at least, is much better done by a knowledgeable and experienced human who sits across the table from you than by a computer program in the cloud.

Do I Really Need All this Mumbo-Jumbo?

My clients are less than thrilled with the dreaded “legalese” and the thickness of the stack of their documents. I sympathize. To be honest, I wish I could simplify them. We would all be happier. But simpler is not better in most cases. We hope that your planning will turn out to be more than you actually need, like too much luggage. It is a very good thing if you don’t need to trigger the planning you’ve done for nursing home confinement or dementia. Do you consider your hazard insurance a waste of money if your house doesn’t burn down? If you do need it, this planning can preserve your life savings, your family’s harmony and your house as well. Ask someone who has gone through a health care crisis with elderly parents after having done this type of planning and ask them how valuable it can be.