Estate Planning 101: Incapacity Planning
February 15th, 2023
If you asked 100 people on the street what estate planning is for, the great majority would probably say something like “to provide for your family,” or “to distribute your property after you die.” Those are certainly important reasons to have an estate plan, but there is another, equally important reason: incapacity planning.
Estate planning isn’t just about what happens when you die. Many people overlook the reality that an important part of estate planning is creating a plan for the possibility that you will be incapacitated during your life. Who would take care of your financial affairs if you were unable to do so? Who would make your medical decisions if you couldn’t? Do those people have legal authority to take action on your behalf? If they don’t, or if you’re not sure, it’s time to speak to an incapacity planning attorney.
What Incapacity Planning Documents Do I Need?
There are many people who put off estate planning because they don’t have significant assets or a family to provide for. But every adult needs incapacity planning, which is an essential part of estate planning. While we often think of Alzheimer’s or other types of dementia as the reason a person might become incapacitated, a sudden illness, accident, or injury can cause incapacity in adults of any age.
No one can predict when they might be in a serious car accident or suffer cardiac arrest or stroke, and COVID showed us images of plenty of people of all ages unconscious on ventilators. The best time for incapacity planning is yesterday; the second-best time is today.
With that in mind, what kind of incapacity planning documents do you need? You should speak to your attorney about the following:
Durable Financial Power of Attorney
A financial power of attorney gives someone you choose (your agent) the authority to act on your behalf with regard to financial matters, such as banking, paying bills, and more. You can make the power as narrow or broad as you wish.
When you are planning for incapacity, you should make the power broad so that your agent can do anything for you that you would do for yourself, financially speaking. It’s important that the power of attorney be durable; that means it will not be revoked by your incapacity. You can also create the power to be “springing,” meaning that your agent will not have authority to act on your behalf unless and until you become incapacitated.
Health Care Power of Attorney
As the name suggests, a health care power of attorney allows you to appoint an agent to make medical decisions on your behalf if you are unable to make or express your own decisions about medical care. You should discuss your wishes with your agent, and you should choose an agent you are confident will respect and carry out your wishes.
A living will is a declaration about whether you would want to receive or refuse certain health care, such as artificial nutrition, if you become unable to make informed medical decisions and you are in a terminally ill or permanently unconscious state. Because living wills apply only to this end-of-life care, it is important to also have a health care power of attorney.
“Do Not Resuscitate” Order
Not technically an estate planning document, a DNR order is still an important part of your incapacity planning. A DNR is a physician’s order that is written into your medical record to indicate that you would not want to receive cardiopulmonary resuscitation (CPR) as a lifesaving measure. Many people choose to have a DNR because they would prefer to be allowed to die peacefully rather than resuscitated painfully only to suffer further without real quality of life.
If you are not sure what lifesaving measures you would want, or who you would want to make important decisions about your health and finances, it’s even more important to speak with an incapacity planning attorney. You don’t need to have to have all the answers before you speak to an attorney; part of your attorney’s job is to guide you through these important decisions.
What Happens if I Have Not Done Incapacity Planning?
If you don’t have an incapacity plan as part of your comprehensive estate plan, you could be putting yourself, your assets, and your family at risk. With an incapacity plan in place, a person of your choosing can step in when necessary to make decisions for you with the guidance you have given them.
Without an incapacity plan, not only may your wishes not be known, but no one in your life may have the legal authority to see that those wishes are honored. That means your loved ones will need to go to court to seek guardianship over you, a process that can be costly and emotional. It’s not uncommon for different family members to argue over who should serve as guardian, or even whether a guardian is needed. Accordingly, failure to create an incapacity plan can create deep and permanent rifts from which some families never recover. You can avoid that fate for your family by doing a little advance planning.
To learn more about estate planning and planning for incapacity, contact Gudorf Law Group to schedule a consultation.