Incapacity Planning in New York: Are There Alternatives for Managing Property When Someone Becomes Incapacitated?Dec 03, 2013 / By: Barton P. Levine, Esq. / Category: Estate Planning
Just as most people prefer not to dwell on their own immortality, people frequently prefer not to acknowledge the possibility of their own incapacitation. While this is certainly understandable, it can also create significant problems for family members and loved ones if incapacity does actually strike. By acknowledging the possibility of incapacity, and planning accordingly in your estate plan, you can avoid a wide range of potential problems down the road. One problem that often presents itself when an individual suddenly becomes incapacitated is property management. In New York, there are a number of alternatives for managing property when someone becomes incapacitated; however, the alternative available to you, or to your loved ones, will depend on whether or not you have planned ahead of time for the possibility of incapacity.
If you are involved in a tragic accident tomorrow that causes severe injuries which leave you in a coma, someone will need to make decisions for you and manage your assets. From a legal standpoint, the method used to manage your assets will depend on the extent (or absence) of your existing incapacity plan. In the absence of an incapacity plan, or any incapacity documents, a family member or loved one will need to obtain a court order to be able to manage your property. He or she will need to file a petition for conservatorship and/or guardianship. If granted, a conservatorship can provide the legal authority necessary to manage, and even sell, your property. The conservatorship process, however, can be lengthy and costly. In addition, it can cause family discord if everyone involved doesn’t agree who should be the conservator.
Incapacity Planning in New York
To prevent the cost, frustration, and potential conflict involved in petitioning for conservatorship you should create an incapacity plan ahead of time. Of even more importance is the fact that by creating a plan you decide who will manage your property and how that property will be managed instead of letting a court make those decisions without your input.
One property management alternative is a living trust. As the maker of the trust you are able to appoint yourself as the trustee and then name one or more individuals as successor trustee. Property can then be transferred into the trust. You may then include the events that would cause the successor trustee to take over, such as your incapacity. Upon your incapacity, the successor trustee immediately becomes trustee and, therefore, controls all of the trust property. As the trustee, he or she can manage or even sell the property if the trust terms permit it.
Another option is to title property jointly. If you co-own property with someone and you become incapacitated the co-owner has the legal ability to manage, but not sell, the property. A power of attorney can also be used to manage property if you become incapacitated if you execute the POA ahead of time. A POA gives your designated agent the legal authority to enter into transactions relating to your property is the POA is a general POA or if the POA specifically includes this authority.
The Law Offices of Barton P. Levine is a member of the American Academy of Estate Planning Attorneys.