There are methods outside of guardianship to manage and protect your person and estate while you are sick, injured and incapacitated. Guardianship is a complex, costly, court-supervised process for protecting and managing the assets, debts, and person of someone who is incapacitated. These steps should be taken before “incapacity”.
These choices include: Trusts, powers of attorney, and healthcare power of attorney. Planning can also include the use “convenience” accounts with financial institutions. The use of a convenience account permits a person to spend money from your account without giving an ownership interest in the account to the person. This can be a very dangerous grant of power, as can any of the other documents discussed and should used only after careful thought.
Perhaps the easiest course to take is to grant “power of attorney” to a friend or relative. This power must be granted by a person who is competent. Competence in a very general sense means that the person is aware of what he or she is doing and understands the powers being given. Lack of competence is called “incapacity”. The granting of powers in a power of attorney can be made effective either immediately or only upon actual incapacity. Waiting until you are too sick or injured often means you will be unable to use the simplified methods to avoid guardianship.
A trust is the transfer of control of property by the owner (trustor) to a (trustee) person to manage for the benefit of a person (beneficiary). It is possible to transfer property to oneself for your own benefit if in the future the property will benefit someone else under the terms of the trust. When this is done the trust is called a living trust or revocable trust. These terms mean the trust can be changed or terminated at any time prior to the trustor dying or becoming incapacitated.
After a formal document is properly created, the person granted power under a trust or power of attorney can legally handle financial transactions on the other person’s behalf. It is important to also consider having a durable health care power of attorney so that you have someone you trust to make medical decisions on your behalf. A power of attorney can be revoked at any time while a person is competent.
If the condition of the ailing person is severe and no trust or powers of attorney were created, a guardian for the person and estate may be appointed. All states, provide for the appointment of a guardian if the person is so incapacitated that he or she can no longer handle matters. Friends, family or interested persons may ask the court to be appointed as guardian. You may designate who you do or do not want to serve as your guardian. In Texas family members have the first right to serve. If a long-term disability is expected a living trust may be an appropriate choice.
Trusts and powers of attorney may only be created by a person before being “incapacitated”, i.e. losing competence. If you have any questions about guardianship, trusts or power of attorney, or concerns about your estate, it is important to consult an attorney.
Let an experienced Estate Planning attorney, help you with your all of your life planning legal needs. Mr. Kennedy serves clients in Dallas, Fort Worth, Arlington, Mansfield, Grand Prairie, and all surrounding areas in Tarrant and Dallas Counties.