Family and Wealth Planning, Incapacity Planning

It’s Not Just About Death and Taxes: The Essential Legal Documents You Need for Incapacity Planning

Two weeks ago Jane (not her real name) called my office trying to find out if I had prepared an estate plan for her dad. She had found among his belongings my contact information but no documents. She was desperate and hopeful. After asking the routine ethical questions and giving legal disclaimer — we do not provide information about our clients to third parties, etc. She explained that her dad was in the hospital and had suffered an stroke. I remembered him and our conversations but, unfortunately, he never came back to my office to start his plan.

Her dad had his savings and retirement plan and a bit of money to cover his own expenses; however, no one had any access to his bank accounts or any of his assets. The daughter was very distressed. The hospital wanted to send him to a rehabilitation center she did not agree with, but she had no access to money to pay for a better one or to decision making without any documentation.

It is not the end of the world, I said. It would have been a lot easier and cost-effective to have the right documents in place, but now you can certainly start an Emergency Guardianship.

Guardianship is a legal action for a court to designate a guardian for an incapacitated adult. The only problem is that Jane’s brother wanted to be in control and did not want Jane making all the decisions for her dad.  The court battle has just began.

Where do I want to get with this? This is a real life example that shows that comprehensive estate planning is about more than your legacy after death, avoiding probate, and saving on taxes. It must also be about having a plan in place to manage your affairs if you become mentally incapacitated during your life.

What Happens Without an Incapacity Plan?

Without a comprehensive incapacity plan in place, a judge can appoint a guardian to take control of your assets and health care decisions.  This guardian will make all personal and medical decisions on your behalf as part of a court-supervised guardianship.  Until you regain capacity or die, you and your loved ones will be faced with an expensive and time-consuming guardianship proceeding. It is possible for the judge to appoint a family member to make these decisions, but upon conflict, the court may decide to appoint a total stranger to make your personal (financial and medical) decisions.

What Happens to Your Finances During Incapacity?

If you are legally incapacitated, you are legally unable to make financial, investment, or tax decisions for yourself. Of course, bills still need to be paid, tax returns still need to be filed, and an investment strategy still needs to be managed.

So, you must have these two essential legal documents for managing finances in place prior to becoming incapacitated (remember, once you become incapacitated you can no longer appoint anyone):

  1. Financial Power of Attorney. This legal document gives your agent the authority to pay bills, make financial decisions, manage investments, file tax returns, mortgage, rent, and sell real estate, and address other financial matters that are described in the document.
  2. Revocable Living Trust. This legal document has three parties to it: The person who creates the trust (you might see this written as “Trustmaker” or “Grantor” or “Settlor” – they all mean the same thing); the person who manages the assets transferred into the trust (the “Trustee”); and the person who benefits from the assets transferred into the trust (the “Beneficiary”).  In the typical situation you will be the Trustmaker, the Trustee, and the Beneficiary of your own revocable living trust while you are alive and well, but if you ever become incapacitated, then your designated Successor Trustee will step in to manage the trustls assets (your assets) for your benefit.

Health Care Decisions Must Be Made Too

If you become legally incapacitated, you won’t be able to make health care decisions for yourself. Because of patient privacy laws, your loved ones may even be denied access to medical information during a crisis situation and end up in court fighting over what medical treatment you should, or should not, receive (like Terri Schiavo’s husband and parents did, for 15 years).

So, you should have these three essential legal documents for making health care decisions in place prior to becoming incapacitated:

  1. Medical Power of Attorney. This legal document, also called an Advance Directive or Medical or Health Care Proxy, gives your agent the authority to make health care decisions if you become incapacitated.
  1. Living Will. This legal document gives your agent the authority to make life sustaining or life ending decisions if you become incapacitated. You can specifically decide in this document if you want or not life sustaining or life ending procedures.
  1. HIPAA Authorization. Federal and state laws dictate who can receive medical information without the written consent of the patient. This legal document gives your doctor authority to disclose medical information to an agent or agents selected by you.

Is Your Incapacity Plan Up to Date?

Once you get all of these legal documents for your incapacity plan in place, you cannot simply stick them in a drawer and forget about them.  Instead, your incapacity plan must be reviewed and updated periodically and if certain life events occur – such as you or your agent moves to a new state or you marriage or go through a divorce. If you keep your incapacity plan up to date, it should work the way you want it to work if it is ever needed.

Fee free to leave your comments below or email me at

Yahima Suarez, PA

This post is for information purposes only and shall  not be construed to constitute legal advise.

Yahima Suarez
Yahima Suarez, J.D. Estate Planning for your Family


Estate Planning, Incapacity Planning

Do you Have a Guardian for Incapacity? Factors to Consider when naming a guardian or guardians for incapacity

As we mentioned before, having guardians named for the event of incapacity is a very important task if you want to avoid a court process (a guardianship) and an stranger making decisions over yourself and your assets.  It is easy just to throw names out there and write down someone; and in fact, having someone designated is better than not having anyone.

However, it would make the designation more likely to work as planned if you consider these factors:

  • Where does the agent live? With modern technology, the distance between you and your agent should not matter.  Nonetheless, someone who lives nearby may be a better choice to make decisions in a daily basis, either health-related or financially-related, than someone who lives in another city or state.
  • How organized is the agent? The agent will need to be well organized to manage your health care needs and be very responsible, keep track of your assets, pay your bills, and balance your checkbook, in addition to being able to manage their own finances and family obligations. Think that this may be  temporary or a long term assignment.
  • How busy is the agent? If the agent has a  demanding job or travels frequently for work, then the agent may not have the time required to take care of your finances and medical needs.
  • Does the agent have expertise in managing finances or the health care field? An agent with work experience in finances or medicine may be a better choice than an agent without it.
  • In sum, an agent who is willing and able, organized and that can follow your instructions and be true to your wishes, shall be an asset.

Remember that you can always name a guardian to handle your money and assets (financial affairs) and a different one to make medical decisions for you. This may be wise and it can help lessen the load for each guardian and you can have checks and balances on each other.

If you choose the wrong person to serve as your financial agent or health care agent, your incapacity plan is likely to fail and you could end up in a court-supervised guardianship, as well as your assets. Thus, it is extremely important to review your designations and update them every so often – at least every three-year reviews are recommended, or upon any change in circumstances (marriage, divorce, or someone moves).

In order to create an incapacity plan that will work the way you expect it to work, you need to carefully consider who to choose as your agent. But probably the most important steps in designating the chosen person as your agent is knowing that this person is willing and able to serve. So, before you designate your choice of agent, talk to that person and make sure the person can do it and wants to it.

I will be happy to answer any questions you may have. Leave your comments below or email me at

Yahima Suarez, PA

Yahima Suarez
Yahima Suarez, J.D. Estate Planning for your Family
Estate Planning, Incapacity Planning

Do you have a Guardian for Incapacity?

A common misconception is that estate planning equates to death planning.  But planning for what happens after you die is only one piece of the estate planning puzzle.  It is just as important to make a plan for what happens if you become mentally incapacitated.

What Happens Without an Incapacity Plan?                                                      

Without a comprehensive incapacity plan, a judge can appoint an agent, known as a guardian to take control of your assets and make all personal and medical decisions for you under a court-supervised guardianship.   The guardian must report all financial transactions to the court either on an annual basis or at least every few years.  The guardian is also typically required to obtain court permission before entering into certain types of financial transactions (such as mortgaging or selling your real estate) or making life-sustaining or life-ending medical decisions.  The court-supervised guardianship will then continue until you either regain capacity or die.

Who Should You Choose as Your Financial Agent and Health Care Agent?

As you can see above, a guardian has an important and involved role in your life if you become incapacitated.

Creating an incapacity plan can help you create a plan that will avoid a court-supervised guardianship.

Rather than having a judge decide, your incapacity plan will have you appoint one or more agents to carry out your wishes. There are two very important decisions you must make when putting together your plan:

  1. Who will be in charge of managing your finances if you become incapacitated (your financial agent); and
  2. Who will be in charge of making medical decisions on your behalf if you become incapacitated (your health care agent).

The most important part of these designations is that you can leave written instructions to guide your guardian make the decisions as you would have wished those decisions made.

For Factors to consider when naming your guardian or guardians, get tuned for out next post . . .

If you have any questions on the subject or would like to know something specific on the subject, post it below or email me at

Yahima Suarez, PA

Yahima Suarez
Yahima Suarez, J.D. Estate Planning for your Family
Family and Wealth Planning

A friend is now gone 

2005 was a year of many surprises and anticipation. It was, however, one of the best years for when Santa arrived. It was no common Santa, it had the usual hat, the usual clothes, and belt but instead of boots, it had four legs!

Baci (kisses in Italian) arrived to our life to stay for over ten precious years. Thank you daddy and Rosi for the special gift.

It was a shared gift nonetheless. As I was finishing my last year of law school and then had to study for the bar, my time was very limited. My mom was his second mom as he was growing up and when it was time for me to leave home and be on my own, Baci shared two homes.

As time went by, he preferred the more serene and structure environment of my mom and Jesu.

He was spoiled. He followed schedules he imposed, like get up from the dinner table and go lay in the sofa, every night. He would not allow Jesu to enjoy a dessert for long. He woke up to clean himself in the bathroom rug every morning with my mom and no matter how old he got, he loved toys.

In 2016 he went to heaven, yes I believe there is a doggy heaven because he was the sweetest little creature ever born!

So I say goodbye to a great friend and a member of my family. We will always love you!

Your family — Yahima