Planning for Incapacity
An estate plan often focuses on what happens after you die. However, if you have not made arrangements in the event you become mentally incapacitated, your plan is incomplete. If your plan does not specify how financial or health care decisions will be made and you become incapacitated, a court-appointed guardian must act on your behalf. Below is a list of documents that will ensure your affairs are in order:
- Revocable Trust. Also called a “living trust,” this is designed to hold most of your assets. As trustee, you have control over the assets, but if you become incapacitated, your designee takes over.
- Durable Power of Attorney. This authorizes a designee to manage your property and finances, with the limitations you create.
- Living Will. It expresses your preferences regarding life-sustaining medical treatment in the event you are unable to communicate your wishes.
- Health Care Power of Attorney. This authorizes your designee to make medical decisions on your behalf in the event you cannot make or communicate them yourself.
- HIPAA Authorization. Even if you have a health care power of attorney, some medical providers refuse to release medical information. Thus, it is important to sign a HIPAA authorization allowing providers to release medical information to your designee.
See E. Hans Lundsten and Joseph Marion III, Estate Planning Pitfall—You Haven’t Planned for Incapacity, JD Supra Business Advisor, Dec. 15, 2014.
Special thanks to Jim Hillhouse (Professional Legal Marketing (PLM, Inc.)) for bringing this article to my attention.