One of the most overlooked provisions in living trusts and financial and medical powers of attorney is how to determine your incapacity. This is a crucial issue in anyone's estate plan, but it's usually ignored or treated like an afterthought.
Why It Matters
Sometimes there is no question that you have become incapacitated. If you are in a coma, or if you are missing, or if you have been declared incompetent by a court, then your trust or power of attorney are not needed to further clarify anything.
But many times, your incapacity occurs gradually rather than all at once. This is usually due to the onset of dementia or mental illness. In situations like this, you may not know or believe that you are losing capacity, but those close to you can see that something is wrong. In situations like this, it is important to determine your incapacity quickly so that your assets are not subjected to waste or loss because of your failing mental health.
What You Can Do
Most "boilerplate" documents require an examination by two independent physicians to determine your incapacity in situations where it is questionable. This sounds like a good option to many, but it can create a few problems. During the initial stages of dementia or other mental illnesses, you may become defensive, paranoid, and aggressive. This makes it unlikely that you will voluntarily subject yourself to examination by multiple doctors. It can also be difficult to schedule those examinations in a timely way.
Instead of relying on two physicians, we prefer to create something we call a private disability panel. This is a group of 2 or 3 individuals - maybe your spouse, adult children, pastor, sibling, best friend - who know you well enough and who you trust enough that they can recognize when something is wrong and privately and efficiently make a declaration of your incapacity.
By selecting these people ahead of time, you are able to play an important role in this determination, as well. You will not be relying on people who you don't know or who don't know you to make such a personal decision.
The Goat Test
So, what's the goat test? My wife and law partner, Laurel, likes to use this test to describe what this looks like in practice and to help you determine who you should name in your disability panel.
If you announced to your friends and family that you had just bought a flock of goats, how would they react? There will be those who know you well enough to know whether this is normal and harmless behavior for you, on the one hand, or bizarre and dangerous, on the other. But others may not know what to make of your new acquisition.
You should choose people for your disability panel who would know whether you pass the goat test.
Here's the stuff we always put at the end: If you want to know more, we would love to talk with you. Best part, the conversation about how it could benefit you doesn't cost anything. Call us at (918) 770-8940, send an email to firm@tallgrassestateplanning.com, or click HERE to schedule a free consultation with a Tallgrass attorney.
Disclaimer: Reading this blog post does not create an attorney-client relationship, and it is not formal legal advice. This is for information purposes only. It is always best to speak with an attorney about your questions, assets, concerns, and needs.
