Estate Planning is about carrying out our wishes after we die,  But in addition to a good Estate Plan, everyone over the age of 18 also needs a good Incapacity Plan that takes care of you during your lifetime if you become incapacitated.

Blues singer Etta James signed her Power of Attorney in 2008, granting her son from a previous marriage, Donto James, the power to make her legal decisions in the event of her incapacity. Her husband of 41 years, Artis Mills, claimed that when she signed the document, she was of questionable mental competency, and filed a court proceeding to take control of about a million dollars of bank accounts in her name.  He claimed he needed the money to pay for her care and keep her at home, rather than in a nursing home.  In most states, this would be done through a conservatorship proceeding (called “guardianship of the estate” in some states).  Since California is a community-property state, and because Mills is the spouse, his lawyer instead opted to file a separate lawsuit which asks for Etta’s money to be declared to be community property and to permit Mills to move the cash to a joint account with his name on it.

The son claimed that he, like Mills, wanted Etta’s money to be used for her care and to keep her at home, rather than an institutional setting.  Donto’s preference was for someone independent to manage the money instead of Mills.  Donto, along with another of Etta’s sons, claimed that she was still mentally sharp in 2008 and that she continued touring and performing across the country until 2009.

Fights between spouses and children of a prior spouse (or other parent) happen frequently when someone develops Alzheimer’s disease or another form of dementia.  That’s why having the proper legal documents in place, signed early, before there is any question of whether someone is competent, is so important.

It is hard enough on the family when a loved one has Alzheimer’s disease; a family feud in court only makes it that much harder.  The case lasted until the family finally came to terms with their differences, shortly before James died.  The settlement allowed her husband to make her medical and financial decisions as her conservator (called guardian in some states), but only permitted him to control $350K for her medical care.

Here at The Law Firm of Evan H. Farr, P.C., we advise that our clients should always make a Durable General Power of Attorney as part of their comprehensive Incapacity Plan, whether this is done alone or in connection with a comphrenseive Estate Plan.  A General Financial Power of Attorney (always "durable" when used in connection with estate planning) authorizes your Agent, sometimes called "Attorney in Fact," to act on your behalf and sign your name to financial and/or legal documents.  If you are unable to carry on your legal and financial affairs due to age, sickness, or injury, the Financial Power of Attorney is an essential tool.  Don’t assume that your spouse already has the legal right to speak or act on your behalf.  He or she does not, unless you have the proper documents in place.

In Part 1 and 2 of our series, we examined four of the reasons that probate is such a nightmare. 

Here is another reason:

If you are not competent at any time prior to your death, the Trustee of your Living Trust can assume the role of caretaker of your real estate and other assets.  Having a Living Trust in place can help you to avoid the costly and embarrassing public proceeding of guardianship and conservatorship, where your children or other loved ones have to prove that you are unable to handle your own legal and financial affairs.  A Living Trust combined with a Power of Attorney offers the most comprehensive incapacity protection available