Incapacity in Nevada

INCAPACITY IN NEVADA Learn How is Incapacity Defined in Nevada, Why is Determining Incapacity Important and What are the Benefits of Incapacity Planning

BRYCE L. RADER Incapacity in Nevada

RENO NEVADA ESTATE PLANNING ATTORNEY www.wealth-counselors.com

Phone: (775) 823-9455

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“Incapacity” has many different meanings depending on the issue being discussed.

In estate planning, the term capacity means the ability to manage your own affairs and make important decisions for yourself. Circumstances in our lives, such as trauma or illness, can lead to incapacity. In some cases, incapacity is only temporary when the condition causing it has been cured or resolved. In any case, it is helpful to understand the legal consequences of a determination of incapacity. That way you can effectively plan for this unfortunate circumstance should it ever happen to you.

LEGAL INCAPACITY Capacity is important in many legal contexts. A person must be “legally competent” in order to execute a contract, will, or other legally binding document.

Competency does not only refer to mental capacity, but also age and maturity. For example, to enter a legally binding contract in most states, you must have reached the age of majority in your state. In Nevada, the age of majority is eighteen (18). The reason for this requirement is that immature individuals need to be protected from liability from a contract when that individual is presumed to be too inexperienced to understand or negotiate.

Incapacity in Nevada

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In the area of estate planning, legal capacity is a necessity in order to validly execute estate planning documents.

MENTAL INCAPACITY Medical conditions, such as psychosis and dementia, are known to lead to incapacity. Also, substance abuse, hypoxia, brain injuries, dehydration, and senility can all diminish a person’s ability to make responsible decisions for themselves. However, a determination of incapacity should never be based solely on a diagnosis. A medical condition may not presumptively result in a lack of capacity.

TEMPORARY INCAPACITY Once the condition or trauma that renders an individual incapacitated has been resolved, a person’s capacity may return.

In this case, the incapacity was only temporary. For instance, intoxication is a temporary condition that causes incapacity,

The good news is, through incapacity planning, you can make choices now while you are capable of doing so, that will ensure the person of your choice is designated to make decisions for you when you no longer can.

which is resolved once the person becomes sober. Of course, the incompetency of a minor is a temporary condition that lasts only until the person reaches the age of majority. A medical condition, such as a coma or a state of unconsciousness is also temporary. Once the person recovers, his or her ability to make decisions may also return.

Incapacity in Nevada

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Phone: (775) 823-9455

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HOW IS INCAPACITY DEFINED IN NEVADA? Nevadadefines an incapacitated person as follows: Incapacitated person means a person who is impaired by reason of mental illness, mental deficiency, advanced age, disease, weakness of mind or any other cause except minority, to the extent of lacking sufficient understanding or capacity to make or communicate responsible decisions.

NV Rev Stat ยง 132.175 (2013).

WHY IS DETERMINING INCAPACITY IMPORTANT? It may be necessary to determine incapacity because certain instruments only become effective when the person who executed the instrument has become incapacitated. The opposite may also be true; certain estate planning tools are no longer effective if the person is incapacitated. Determining incapacity can be a difficult and emotional process. Understanding the process, however, can make the process more tolerable.

WHO MAKES THE DETERMINATION OF INCAPACITY? If a medical determination of incapacity is challenged, it may be necessary for a legal determination of capacity to be rendered by a court of law. In most cases, the court requests medical opinions of the experts who examined the individual in order to judge capacity. In situations where there is no challenge to an incapacity determination, the court can rely solely on the medical records.

Incapacity in Nevada

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However, if family members contest the finding, the court may request an independent assessment.

CAN A DETERMINATION OF INCAPACITY BE REVERSED? Since incapacity can be temporary, a finding of incapacity can be reversed if the condition causing the incapacity has been effectively treated. When it is demonstrated to the court that the person has regained his or her mental capacity, the determination can be reversed and decision-making abilities reinstated.

WHAT SHOULD I DO IF I BELIEVE A LOVED ONE HAS BECOME INCAPACITATED? Someone who is mentally impaired may start to show signs of needing assistance in their personal affairs, such as becoming increasingly forgetful, disoriented, or unable to balance a checkbook. If this happens, you may need to consider whether steps should be taken to care for their needs and protect them from financial exploitation. In some cases, this can be done informally by family or friends. However, in most situations more

Incapacity in Nevada

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Phone: (775) 823-9455

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formal control of a person’saffairs may be required. This may include a guardianship or the transfer of a trusteeship when a living trust is involved.

A LIVING TRUST IS AN ALTERNATIVE A Living Trust provides for the appointment of a successor trustee to manage your estate should you become incapacitated. Most comprehensive estate plans will also include a durable power of attorney for property and a healthcare power of attorney. This type of planning is usually much less expensive, time consuming, and permits you the ability to select who you want to manage your estate or make medical decisions for you rather than a court controlled process to appoint and continually monitor your guardian.

THE BENEFITS OF INCAPACITY PLANNING The good news is, through incapacity planning, you can make choices now while you are capable of doing so, that will ensure the person of your choice is designated to make decisions for you when you no longer can. Aqualified estate planning attorney can help you create the comprehensive plan that meets your needs, while considering the possibility of future incapacity, long term or terminal illness.

Incapacity in Nevada

www.wealth-counselors.com

Phone: (775) 823-9455

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About the Author Bryce L. Rader Bryce L. Rader, a shareholder of the law firm, practices primarily in the areas of estate planning, probate, trust administration following death or disability and long term care planning, including guardianships and other Elder law matters.

With a law degree and a Master of Health Administration from the top health law program in the nation Mr. Rader began his career in public service with the Nevada State Board of Medical Examiners. While with the Board he dealt with many complex health care issues confronting the state and assisted in redrawing state health law. Mr. Rader next worked for the Governor’s Office, Consumer Health Assistance. As Deputy Chief Ombudsman he represented the interests of many citizens before health care providers, state legislators and other state agencies.

EDUCATION Mr. Rader earned a bachelor’s degree in Spanish from the University of Nevada, Reno in 1996.

He then went on to earn a law degree from Saint Louis University School of Law and a Master of Health Administration from the Saint Louis University School of Public Health in 2000. He is a member of the National Academy of Estate Planning Attorneys, the National Academy of the Elder Law Attorneys, the Academy of Special Needs Planners, the Northern Nevada Estate Planning Council, and the Washoe County Bar Association. He is also member of the Probate and Trust and Elder law sections of the state bar and a founding member of the Washoe County Probate Bar Association.

PERSONAL As a fourth generation Nevadan Mr. Rader has an intense love for his native state and its surrounding environs. He is an avid outdoorsman who enjoys backpacking and fishing with his wife and volunteering his time with the Boy Scouts of America.

Anderson, Dorn, & Rader, Ltd. Legacy and Wealth Planning Attorneys 500 Damonte Ranch Parkway, Suite 860 Reno, NV 89521 Phone: (775) 823-9455 Fax: (775) 823-9456

Incapacity in Nevada

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Phone: (775) 823-9455

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