Estate Planning, Capacity Issues, & Your Parents

Estate planning is critical in terms of protecting assets and ensuring your wishes are carried out. Although you may be an adult that has a plan in place, do your parents? The older a person is before getting a plan in place, the greater the risk that they will not have the capacity to sign their own documents. Not having estate planning documents can negatively impact both themselves and the individuals who step up to assist them with their financial affairs and healthcare decisions when they are no longer able to make those decisions. Usually, these individuals are their adult children. If you bring your parents to an estate planning attorney when they have already lost their capacity, the attorney cannot allow your parent to sign the documents and you are left with the unfortunate choice of court intervention. With that in mind, let’s talk about the significance of competence, the difference between guardianship and conservatorship, and the challenges associated with determining capacity. 

Competence & Estate Planning

If you want to help your ageing parents create an estate plan, the first question is whether they possess the mental capacity to sign their estate planning documents. For purposes of signing a Last Will and Testament, the parent must understand who their beneficiaries are and have an idea of what assets they own. For purposes of signing a Power of Attorney, the parent needs to understand the document they are signing and understand who they are appointing as their fiduciary. The parent needs to be able to clearly articulate what their wishes are for any estate planning document.

To determine that a person has the requisite capacity, attorneys may ask basic questions, such as whether the parent can identify their children, beneficiary, and assets. If there are doubts about capacity, seeking a medical opinion may be necessary. Although helpful to have, a letter of capacity from a doctor must be given very close to the date the estate planning documents are signed or else a new capacity letter may need to be required. Many doctors may be hesitant to give an opinion about capacity because they don’t want to incur liability if they make the wrong call. This often results in a primary physician referring the parent out to a neurologist to make the final determination. Such referral could result in months of waiting for an appointment. This is a time-consuming process, and ideally, your parents create a plan before it escalates to this extent. If it is ultimately determined that capacity is an issue, the children may be forced to seek guardianship for conservatorship. 

Guardianships & Conservatorships

When a parent is deemed incapable of making decisions, the children can pursue guardianships and conservatorships to protect their parent’s interests. To become either one, a court must appoint you. Guardians have the authority to make personal and healthcare decisions for the individual. They are there to make the decisions that align with the parent’s best interest and overall well-being. 

Conservatorships are different in terms of responsibilities. They manage the financial affairs of the parent. (Guardianships and conservatorships are not limited to children and their parents.) The conservator can handle the person’s assets, manage their investments, and pay their bills. One person can hold both positions, but it can also be two different people.

Ultimately, obtaining a Guardianship or Conservatorship over your parent gives you the same power as a Power of Attorney, but it is time consuming and expensive to achieve. 

Build an Estate Plan with Select Law Partners, PLLC

Navigating estate planning while facing the challenges of capacity and competence can be complex. The legal team at Select Law Partners, PLLC, understands how to protect you, your assets, and your loved ones through diligent estate planning. Contact our experienced attorneys for professional and compassionate guidance regarding estate planning and questions regarding capacity. Allow us to safeguard your family’s future.

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Sara Josey

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