Friday, August 12, 2011

The Importance of Planning When You Have Capacity

In Georgia, incapacity planning takes several forms.  With planning documents, such as Advance Directives and Financial Powers of Attorney, one can designate who can make important life decisions, without the intervention of a court.  The downside to these documents, however, is that they must be executed when a person has sufficient capacity.  Unlike last will and testaments, Advance Directives and Financial Powers of attorney require more than just testamentary capacity to execute, and instead require the higher standard for contracts.  Another problem is that people with dementia may, in their illness, revoke the documents out of suspicion, thereby necessitating the use of a guardian and conservator.  However, even in that situation the documents do help a court determine who the proper person should be to serve as guardian and conservator.  Of course, particularly with Financial Powers of Attorney, it is essential that the agents named be very trustworthy.
            Trusts are probate avoidance devices.  Any property that is put into them becomes a non-probate asset, and thus not subject to probate proceedings.  Trusts may also have provisions to deal with incapacity.  However trusts have no control over assets that are not placed into them, either by deed, bill of sale, transfer of title or testamentary disposition.