Sudden Incapacity

Incapacity

What if you were to suffer a massive stroke, and then lose a significant amount of physical mobility and mental capacity? What would your family do? Sadly, this is not an uncommon situation. This happened to two of our clients about a year ago, one was a 75-year-old male, and the other was a 60-year-old female.

This is the typical timeline for what will happen next:

(1) Patient receives initial care at the hospital, family is in shock and distraught;

(2) Patient is moved to a Rehabilitation Facility, family is now wondering: how long will it be for, can he/she come home, how would we pay for this care, who can access the patient’s retirement accounts and savings accounts, who can make medical decisions for the patient?

(3) Social Worker at the Rehab talks to the family about 2 months in, asking what they want to do with Patient. Options are: go home (hire 24 hour care), or find a skilled nursing facility. Family looks into the cost of the 2nd option and finds out it’s about 10K per month. Family looks into the 24 hour caregiver option, and finds out it’s about $7K-$9K per month. Family is now in a panic.

(4) Family decides to seek advice from a lawyer on what to do. First of all, how to access his/her funds. Secondly, how to take care of the patient long term, and how long before the money runs out.

An estate planning lawyer in Palatine, IL knows it is very difficult to assist the family when they are in this crisis mode. The options are very limited. If the patient is truly incapacitated mentally, an attorney can open a Guardianship court case, which can be a nightmare. The cost is about $8K-$10K to start and will have an ongoing yearly cost of $2K-$3K. Plus the family must take time to go to the courthouse once a year.

As for the cost of the long-term care, the options are very limited at this point. Once the family can access the patient’s funds via the Guardianship, then they would need to pay for his/her care out of pocket, until their assets are below the minimum amount to qualify for Medicaid.

The consequences of the major health event of a debilitating stroke are often disastrous. The family will have many challenges, emotionally, physically and financially.

There are ways to minimize some of the challenges. It’s called proper Estate Planning. The Guardianship can be avoided just by creating current Powers of Attorney for Property, and for Health Care. The cost of long-term care can be reduced with the implementation of a Medicaid Protection Trust. Both of these solutions can be implemented, but they must be done when you are healthy and coherent and are willing to make a few changes in the title to your assets.

Before this type of horrific event surprises you or your family members, make sure that you get your estate plan done. You will have peace of mind and will reduce the financial and emotional distress placed on the entire family in the event of a sudden incapacity.

Thanks to Bott & Associates, Ltd. for their insight into estate planning and preparing for sudden incapacity.