One aspect of effective estate planning includes incapacity planning. Incapacity planning is recommended as it outlines your wishes in the event that you become incapacitated. Incapacity planning is normally designed for a time in which you have an injury or illness and you are unable to make informed decisions pertaining to finances and your well-being.
Failure to have an incapacity plan in place means the judge will appoint someone to control your assets and this individual will make decisions about personal and medical needs. Effective incapacity planning will include:
- A financial power of attorney document. This legal document is designed to allow an agent of your choosing to pay bills, manage finances, file taxes, pay or sell real estate, and handle other financial matters as needed. When drafting the document, there are two forms, a “durable” or “springing” power of attorney. The durable power of attorney is designed to go into effect when it is signed where a springing power of attorney goes into effect when you have become incapacitated.
- Revocable living trust. An individual of your choosing will own and manage the assets, and they are placed into a trust. The beneficiaries are the individuals who receive property or other benefits per your wishes. If an individual becomes incapacitated, the designed successor trustee will manage the trust assets.
Part of incapacity planning must include provisions pertaining to healthcare decisions. When an individual becomes incapacitated, these legal documents are used to make appropriate healthcare decisions:
- Medical power of attorney. This document allows an agent of your choosing to make healthcare decisions on your behalf.
- Living will. A living will is a legal document designed to provide information about end of life care. Individuals can provide information about end of life wishes, such as extending care.
- HIPAA authorization. Federal and state laws require HIPAA authorization of written consent of the patient. Health care providers use the HIPAA authorizations to disclose medical information to the agent you have selected.
Meet With Incapacity Planning Attorneys
Experienced attorneys can provide assistance pertaining to incapacity planning. Incapacity planning can become outdated and may need to be reviewed every few years, or following a major life event. Contact our office to schedule a consultation to update your estate plan.