Incapacity Planning

Some of the lesser-known benefits of a well-crafted estate plan are the provisions providing for both management of assets and instructions for personal care in the event of incapacity.  Estate planning documents that anticipate incapacity enable named representatives to manage an individual’s assets, and direct how health care decisions will be made.  Without these documents, family members may have to petition a court to attain power to manage the assets or make health care decisions for one who is incapacitated. 

The first document necessary in planning for incapacity is the durable power of attorney.  This document survives incapacity and gives a designee the authority to act on one’s behalf with regard to financial affairs.  The durable power of attorney is valid once the testator signs it, so selection of designee is imperative.  The next set of documents concerns heath care; and includes a health care proxy, living will and HIPAA authorization.  A health care proxy will give a designee the power to make health care decisions on one’s behalf.  A living will or advance directive can provide directions to caregivers and loved ones with regard to care or end-of-life matters.  A HIPAA authorization allows doctors to disclose important health information to caregivers. 

See Planning for Incapacity re: Estate Planning, The National Law Review, Apr. 23, 2015.

Special thanks to Jim Hillhouse for bringing this article to my attention.