Incapacity – Snow White and the Seven Steps

CunninghamLegal – The Living Trust Lawyers

Incapacity is generally defined as lacking the ability to make decisions for oneself. This can occur due to a mental impairment or a physical disability or illness, which prevents a person from having the ability to communicate their reasonable decisions to others. Like most people, Snow White did not know that she would become incapacitated. However, she did understand that proper estate planning doesn’t merely focus on transferring assets upon a person’s death. She knew that an estate plan should also prepare for the possibility that a person may become incapacitated and provide for control of assets and guidance for health care decisions during that time.

Snow White had been warned that the evil queen was out to get her. Despite the warning, she still took a bite of a poisonous (and possibly non-organic) apple. That one bite led to Snow White’s incapacity. She lay unconscious in the forest surrounded by non-CPR certified dwarves, while her real property and financial accounts seemingly had no guidance and medical professionals feared that there was no one who could speak on Snow White’s behalf.

Fortunately, Snow White had a thorough estate plan and she had taken the proper steps to ensure that during her period of incapacity, she didn’t lose control of her assets or medical decisions. The steps she followed were to:

1) Have a Revocable Living Trust: Snow White visited a qualified estate planning attorney who drafted a Revocable Living Trust as the cornerstone of her estate plan. The person she selected as her successor trustee will be guided by the provisions of the trust during Snow White’s period of incapacity.

2) Have a Durable Power of Attorney: A durable power of attorney allows for a person to act as the agent, or attorney-in-fact, on behalf of a person who is incapacitated. Snow White named the successor trustee of her trust to be her attorney-in-fact, thus this person has the power to manage assets that are inside or outside of the trust.

3) Decide When the Durable Power of Attorney Will Be Effective: The durable power of attorney can be effective immediately, upon the signing of an authorization by a person who still has capacity, or upon the occurrence of an event that causes a person’s incapacity. Snow White preferred that her durable power of attorney be effective immediately upon the signing of her estate plan, which means that her attorney-in-fact could act in her best interest anytime thereafter.

4) Create a List of Assets, Obligations and Accounts to Guide Your Successor Trustee and Your Attorney-in-Fact: It can be daunting to assume responsibility for another person’s assets and finances. It is recommended that you keep a current list of assets, obligations, and accounts to allow the people that you have nominated to seamlessly act on your behalf.

5) Have an Advance Health Care Directive: Also referred to as the “medical-power-of-attorney”, this document allows a person to be named as the health care agent and empowers them to make decisions on behalf of an incapacitated person.

6) Thoughtfully Select Who is Best Suited to Make Medical Decisions: It is important to select a health care agent who is comfortable speaking with medical professionals and advocating on behalf of the incapacitated person. Snow White selected the dwarf named Doc as her health care agent. His name indicates that he has a medical background and therefore would be comfortable discussing possible treatments and procedures with Snow White’s doctors.

7) Name People to Receive Medical Information (HIPAA Authorization): The Health Insurance Portability and Accountability Act requires that information relating to a person’s medical condition only be released to named “HIPAA agents.” Although Snow White wanted only one health care agent to make decisions for her, she authorized a handful of dwarves and family members to receive information related to her medical condition.

By following the steps listed above, Snow White’s assets were managed during her period of incapacity by people she had previously selected. Additionally, her health care agent was able to discuss and authorize her treatment. The experimental “kiss-by-a-prince” therapy proved successful and Snow White regained her capacity and her ability to control her assets and make her own health-care decisions. And by avoiding poisonous, non-organic apples, she was able to live happily ever after.

We invite you to contact us any time for an appointment with our legal and tax experts. We have offices throughout California, and we offer in-person, phone, and Zoom appointments. Just call (866) 988-3956 or book an appointment online.

Best, Jim
James Cunningham Jr., Esq.
Founder, CunninghamLegal