Mental Health Issues and Estate Planning

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Mental Health Issues and Estate Planning

Mental health used to be a taboo subject, one that people didn’t talk about in polite company. That’s something that has been changing in recent years as people realize just how prevalent mental illness actually is, thanks in large part to awareness campaigns by organizations like the National Alliance on Mental Illness (NAMI.) 

According to NAMI, 19.1% (nearly 1 in 5) of U.S. adults experienced mental illness in 2018. From an estate planning standpoint, mental illness raises some potential issues that both clients and their estate planner should be prepared to consider and address.

mental health issues and estate planning

  • Capacity to Serve as a Fiduciary. It is common for estate planning clients to name their spouse or children in key roles in their estate plans. However, if your spouse or child is dealing with schizophrenia, bipolar disorder, clinical depression, anxiety, or another mental illness, it may be difficult for them to make decisions; dealing with a mental health condition can be all-encompassing. That’s something to consider before automatically naming that spouse or child as your personal representative (executor), trustee, power of attorney, or health care agent.
  • Ability to Manage Assets. You should also consider your loved one’s ability to manage assets left to them in your estate plan. Leaving assets to someone battling a mental health issue could inadvertently enable poor decision-making. Many people in this situation choose to create trusts (or include trust provisions inside their Wills) designed to protect assets for mentally-ill loved ones, putting some guardrails around how those assets are used. If your loved one is receiving Social Security Disability payments or other government assistance as a result of their mental illness, it is especially important to factor that into your estate plan so an inheritance won’t accidentally jeopardize their eligibility for continued benefits.

Mental illness is common and treatable, and the fact that the stigma around it has lessened is a positive thing for those dealing with their mental health – and their loved ones. It makes it easier to bring issues like these estate planning concerns out into the open.

To learn more and to talk through your situation with an experienced estate planning attorney, contact our office today.