What is the most efficient way to plan for possible future mental incapacity?
Planning for mental incapacity is actually an important component of a comprehensive estate plan, and can help save beneficiaries (and your own estate) thousands of dollars in costly guardianship costs.
As a general starting point, understand that once a person reaches the point of incapacity, there are a number of legally binding transactions that he or she will no longer be able to complete. For instance, an incapacitated person (e.g., one suffering from the effects of dementia) cannot sign a contract, borrow money, sell real estate, make changes to an estate plan, or engage in financial transactions. In effect, the signature of such person becomes legally voidable upon contest from an interested party, which can create significant unnecessary stress for family members.
There are generally two ways in which a person can arrange for another person to step into their shoes and sign documents on their behalf: the easy way and the hard way. By going the easy route, an individual can execute a durable power of attorney, appointing another person or group of people with the authority to act as agent for the individual. Under Massachusetts law, an agent’s authority may be as broad or narrow as the language in the document – and the specific agent powers will be listed in the power of attorney. In addition, the “durability” of the document signifies it remains enforceable even past the point of incapacity, allowing the agents to take over on behalf of the principal for purposes of conducting financial and legal transactions.
If there is no power of attorney in place, and an individual becomes permanently disabled under the effects of a severe mental condition, it will be necessary to pursue an adult guardianship. This process can take several months to complete, and will require attendance at a hearing to determine if guardianship is in the individual’s best interests. What’s more, next-of-kin may contest the guardianship or file cross-petitions if there is an objection to a certain individual serving as guardian. By establishing a simple power of attorney in advance, however, this process can be avoided.
To discuss your estate planning options, including provisions to protect your loved ones if you should ever become incapacitated, please contact the skilled Massachusetts attorneys of Hutchings Barsamian Mandelcorn, LLP at: 781-431-2231.