The topic of Estate Planning has historically revolved around the distribution of assets and caring for a decedent's minor children. By the way, since it is not a term used in our everyday vocabulary I thought it would be worthwhile to explain that the term decedent is one of those terms of art in the estate planning realm that refers to the person who is now deceased. In any event, the planning by and large tended to focus on post-death issues. These issues can be properly addressed in a variety of forms including through the use of a Will or Trusts. The subject matter of this post is planning for incapacity during one's lifetime.
As is the case in the post-death, distribution of assets arena, there is a mechanism in place according to the laws in the State of Wisconsin to deal with situations where no prior planning was done. When someone dies without a Will the laws of Intestate Succession apply to determine who gets what. Along the same lines, but with much less comfortable results, if someone becomes incapacitated or is no longer able to make health care or financial decisions for themselves then there are laws and court proceedings to appoint someone else to assist them. This will typical involve a Guardianship. A guardianship comes in two forms, guardian of the person and guardian of the estate. Generally speaking, the guardian of the person is in a position to make health care decisions for the Ward and the guardian of the estate will make the financial decisions. I mentioned that this process is much less comfortable because the court is involved along with a licensed psychiatrist and/or treating physician. You may also have noticed that the individual who can no longer care for himself or herself is referred to as the Ward. In order for a guardianship to be approved the petitioner much show the Court that the proposed Ward is not capable of managing his own health care or finances because of a mental disease such as Alzheimer, advanced dementia, etc. or other conditions limiting his ability to review, process and understand information. From experience I can say that the guardianship process is a very difficult time from an emotional standpoint.
The good news is that it is possibly to complete and execute a plan that will avoid the unpleasant guardianship situation describe briefly above. This is accomplished through the use of Power of Attorney for Health Care and General Durable Power of Attorney for Finances. These two separate and distinct documents are typically included as part of any Estate Plan. The Power of Attorney for Health Care by law does not become effective until the individual is incapacitated and two physicians sign statements to that effect. The General Durable Power of Attorney for Finances can be drafted to be effective immediately after it is signed or it can be drafted to only become effective when two physicians sign statements with the finding of incapacity.
It is very easy to provide so much information at one time that it is impossible to process everything. With that in mind I will break this topic into two separate topics. I will provide more information on each of the powers of attorney documents in separate posts in the near future. For additional information regarding powers of attorney it might be worthwhile to review the following material from the State Bar of Wisconsin: Health Care and POA for Finances.
