What is Incapacity in estate planning ?

How does a typical trust define incapacity ?

Most trusts say you're incapacitated when two doctors sign a letter saying you can't manage your affairs. Sounds objective. Sounds safe.

Sounds objective. Sounds safe. Sounds like someone has never actually used an HMO.

What happens when two doctors won't agree ?

Tom lived in West Hills. Did everything right. Had a trust.

Then Tom had a stroke. Not a mild one. The kind that leaves you in a rehab facility, unable to pay bills, unable to speak for yourself.

His trust required two doctors to sign off on incapacity.

Tom's daughter called the primary care physician. He agreed to sign. Known Tom for 20 years.

Then she called the hospital. Needed the attending physician. The hospital said: "HIPAA. We can't confirm he's here."

She's his daughter. His health care agent. Paperwork in hand. Didn't matter.

How long did that take?

Three weeks. Three weeks of hold music. Three weeks of trying to log into his HMO account. Three weeks of no one calling back.

Getting one doctor to return a call is a miracle. Getting two to agree is like folding a fitted sheet. Getting a hospital to violate their own HIPAA policy? Impossible.

Meanwhile, Tom's bills went unpaid. The utility company sent a shut-off notice. The mortgage went past due.

Your trustee can't step in. Your bills aren't getting paid. Your power of attorney is as effective as a used dryer sheet.

How could they have fixed it?

• Review the trust if its more than a few years old. That 'two physician' language is outdated. Most decent estate planners don't use that anymore.

  Because it doesn't work in the real world.

• Amend the trust. Not by the same attorney who wrote it — they'll want to keep their language. Find someone else. Doesn't have to be me. Just someone else.

Not perfect. But better.

Dirty Laundry Tip

Incapacity planning isn't about paperwork. It's about keeping the lights on. And not leaving your daughter on hold for three weeks.

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