Thinking about estate planning? Don’t wait until it’s too late and make this (potentially) costly estate planning mistake

As our Baby Boomers continue to age, the average age of our population is increasing. There are more older adults in the United States now than ever before.  As a result, I am seeing a lot more clients come to me, generally spouses of someone who is having mobility and dementia issues as they age.  Often, a decision has to be made regarding care and how to pay for the care.  Care in an assisted living community in California can cost $10,000 – $20,000 monthly, or more.  A couple may, for example, be considering a reverse mortgage to pay for care. But to sign paperwork, an individual must have “capacity,” meaning they must not have dementia or disorientation that prevents them from understanding the documents they are signing. Obviously, too, someone who is unconscious cannot sign documents either.

Too often, the couple waits until it is too late.  When a person has capacity, they can sign a Power of Attorney document that allows someone else, usually their spouse, to act on their behalf for their finances, such as to sign documents. Once capacity is lost due to dementia or illness, then a Power of Attorney is no longer an option and to obtain the ability to act on an individual’s behalf requires a conservatorship.

A conservatorship is a court process that gives an individual, usually a family member/spouse, the ability to manage the care and finances of another who does not have capacity to do so on their own. The process can take several months, and the court fees alone are up to $1,200.  Hiring an attorney can dramatically increase this cost.  In contrast, obtaining a Power of Attorney takes very little time and even with an attorney preparing it for you, is not going to be more than a few hundred dollars.

Everyone should have a Power of Attorney for both finances and medical care once they turn 18.  Have you created yours yet?

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