It is okay not to be okay. Removing the stigma of mental health starts with realizing that many people – about one in five of all US adults – are affected by mental illness. Understanding this can lead to more people getting the help they require, not only by seeking guidance from a mental health expert but also by planning for the future with mental health considerations in mind.
The odds are that you or somebody in your family is living with a mental health condition. Rather than ignoring what might be an uncomfortable topic, you should think proactively about the challenges of living with mental illness and set up an estate plan that addresses such challenges head-on.
Estate planning is a sensitive subject, and it can be even more sensitive when the issue of mental health is involved. If you need to set up an estate plan or revise an existing estate plan around mental health concerns, we are here to help. Please contact our office to set up an appointment with an estate planning attorney.
Nearly 50 Million Americans Suffer from Mental Illness
Saying that America is dealing with a mental health crisis is not an exaggeration. According to the National Alliance on Mental Illness, approximately 20 percent of US adults experience mental illness, including 1 in 20 who experience serious mental illness, and 17 percent of American youth experience a mental health disorder.
The mental health crisis has worsened during the coronavirus pandemic. Loneliness and isolation are fueling increases in anxiety, depression, and thoughts of suicide and self-harm, report Mental Health America. More people seek mental health screening and treatment, but around 23 percent of Americans with mental illness are still not receiving the services they need.
Improvement starts with acknowledging that there is a problem. Talking to a healthcare professional about mental health struggles and treatment options leads to better outcomes. One improved outcome can be creating an estate plan that considers your own or a family member’s mental health.
Your Mental Health and Your Estate Plan
Every estate plan should be tailored to the individual’s needs and their unique family dynamics. Several estate planning documents are available to address concerns about your mental health. Chief among such concerns is the possibility that, at some point, you may be unable to manage your affairs. To prepare for that contingency, consider having the following documents in place:
- Financial power of attorney. A financial power of attorney allows you to appoint somebody else to manage your finances on your behalf. For example, they can manage your bank accounts or sign papers at a real estate closing for you. Depending on your state’s law, the document can be set up so that it takes effect immediately or only upon the occurrence of a future event (e.g., you become mentally incapacitated).
- Medical power of attorney. A medical power of attorney gives an individual of your choosing the legal authority to make decisions about your medical care when you no longer can. You have the discretion to limit the kinds of decisions that your chosen representative may make.
- Revocable living trust. A revocable living trust contains money and property that you transfer into it, and you choose a person (the trustee) to manage it for your benefit while you are still alive. You can set up a living trust in such a way that it can be changed or revoked except when you do not have the mental ability to do so or have passed away. A living trust can also specify the distribution of the money and property when you die.
Importantly, for these documents to have legal authority, you must have mental capacity when signing them.
To ensure capacity, you may want to obtain a professional opinion from a licensed mental health provider stating that you are of sound mind and understand the meaning and effect of the documents you are signing. Alleging lack of capacity is an everyday basis for contesting an estate plan.
In addition, if you are entrusting somebody with the power of attorney authority, and that person has their mental health concerns, you should discuss the issue with your family as well as your estate planning lawyer.
Your Beneficiaries’ Mental Health
Having beneficiaries who suffer from mental illness presents a different estate planning challenge. You must pass your legacy to them in a way that serves their best interests. Discretionary trusts and supplemental needs trusts are two ways you can lookout for a mentally ill loved one even after you are gone.
- Discretionary trusts. If you are concerned that a family member’s mental illness will prevent them from spending their inheritance wisely, a discretionary trust is an option. With a discretionary trust, you choose a trustee who determines how to spend the money in the trust. The trustee can make sure that the money is used for the beneficiary’s necessities, and the beneficiary cannot squander it. This type of trust makes sense for somebody who is not receiving, and does not plan to receive, public assistance.
- Third-party special needs trust. As with a discretionary trust, a special needs trust has a trustee to make distributions for the beneficiary’s benefit. But in contrast to a discretionary trust, the money and property in a special needs trust do not go directly to the beneficiary. Instead, the money is used to pay for certain supplemental needs, such as personal care, therapy, and education. As a result, the money and property in the trust does not disqualify the beneficiary from becoming eligible for or receiving needs-based government benefits.
There is a significant difference between suffering from a severe mental illness, such as bipolar disorder or schizophrenia, and a minor issue, such as anxiety or depression. Some people’s mental health issues can come and go throughout their lifetime. Others’ illnesses are prolonged or recurrent. In some cases, a person may be genetically predisposed to mental illness that has not yet manifested. Proper proactive estate planning can protect you and your loved ones from whatever type of mental disorder may be of concern to you.
These are some of the factors to consider when making estate planning decisions based on mental illness in your family. Every individual and every family is unique. Your estate plan should reflect what you know now and be updated to reflect changes in your life and the lives of your family members. Contact us to learn how mental health considerations can fit into your estate plan.
At Cheever Law, APC, we don’t just draft documents; we ensure you make informed and empowered decisions about life and death for yourself and the people you love, which starts at a valuable and educational Life & Legacy Planning Session. The Life & Legacy Planning Session will allow you to get more financially organized than you’ve ever been before and make all the best choices for the people you love. If you have already completed your estate plan, we will review that plan at your Life & Legacy Planning Session to ensure that it will work the way you intend and address any holes or gaps that may be present if circumstances have changed since you executed your plan.