Sorry Folks, That Ship Has Sailed
It is not uncommon for my office to receive a call from a panicked family member of an elderly individual. The call may go something like this:
Caller: Hi, I'm calling to see how much it costs to get some estate planning done for my mom.
Paralegal: We'd be happy to help you if we can. Why don't you first tell me a little bit about your mom.
Caller: Okay. Well, mom's not doing too well these days. She's in an assisted living facility and mostly doesn't recognize us anymore. Although she sometimes has good days, most of the time she's confused and is asking for her husband who died three years ago.
Paralegal: Okay. What kind of property does your mom have?
Caller: Well, she has a home that's paid for. She has a brokerage account, a checking and savings account, some farm land in Tooele and I think she has some municipal bonds that she invested in once. But I'm not really sure.
Paralegal: Does your mom know what property she owns and does she understand its value?
Caller: Oh heavens no! She put me on her checking account years ago because she was so overwhelmed with trying to manage her finances. I don't think she has a clue how much she owns, nor could she keep it straight even if we told her.
Paralegal: I think we can help you, but you'll need to meet with an attorney to discuss some of the legal implications of your mother's situation.
Although this above excerpted conversation is a fictitious example, and a very abbreviated one at that, it illustrates a trap that many people fall into with regard to estate planning.
In order for an estate plan to be legally valid, the individual creating the plan must possess "testamentary capacity." In Utah, the law states: "An individual 18 or more years of age who is of sound mind may make a will." U.C.A. Sec. 75-2-501. What does "sound mind" mean? It is generally accepted that a testator (person creating the estate plan) must:
1. Know the nature and extent of his or her property
2. Know the "natural objects of the testator's bounty," or those persons most of us would expect to take the property (like spouses, children, grandchildren, etc.)
3. Understand the basics of the plan for distributing the property, and
4. Understand how the above elements work together to form the plan.
In the above example, the mother for whom the child was calling appeared to be struggling with at least one (and possibly more) of the tests above. Of course, such a determination of legal capacity should not be made over the phone. But frequently, in a case like this, it is far too late to do estate planning in the manner that most people would expect.
Rather, it becomes necessary to discuss with the caller the potential need for a court ordered guardianship and/or conservatorship. Once established, the guardian and/or conservator can petition the court to allow them to do estate planning. However, the plan must be approved by the judge before it can be executed.
Although working through the court system is typically not a painless process, it is available and typically the most effective solution at that stage. Be aware, however, that there are costs (monetary and non-monetary) associated with establishing guardianships and conservatorships. If you or someone you know may be in need of a guardianship or conservatorship, you will want to speak with an elder law attorney who can help you understand all of the issues surrounding these kinds of legal proceedings.
Or better yet, you can avoid guardianships and conservatorships altogether by doing the planning well in advance of mental or physical incapacity. Doing so typically costs much less and works far better than waiting until a judge has to be involved.