Why Planning for Incapacity Is Essential
Have you ever thought about what would happen if you were to become incapacitated due to an injury or illness? Do you have someone who can make financial and healthcare decisions on your behalf in such a scenario?
If you answered ‘no’ to these questions, you are not alone. Data shows that approximately 60% of Americans do not have an estate plan or a healthcare directive in place. This is – needless to say – a bad idea, as failing to plan for incapacity can lead to a scenario where someone might make financial and healthcare decisions for you without really knowing if the decisions are consistent with your beliefs and preferences.
The Downsides of Not Having an Incapacity Plan
It Can Lead to Court Intervention
In the absence of a legally valid incapacity plan, the court might be forced to step in and appoint a guardian or conservator to manage your affairs. The problem is that the court-appointed guardian or conservator might not be someone whom you would have wanted to manage your affairs. Also, the court-appointed agent might not handle your investments and debts the way you would have wanted them to be handled.
You Might Receive – Or Not Receive – Treatment That Might Be Against Your Healthcare Preferences
One of the biggest problems with failing to plan for incapacity is that your family might not know anything about your healthcare preferences – particularly with respect to end-of-life care. As a result, if and when you become incapacitated, they might authorize a treatment plan that you would not have approved of.
For instance, let us assume that you strongly believe (due to religious reasons or for any other reason) that your life should not be prolonged in the event that you are terminally ill and are likely to die within a short period of time.
If you fail to put it in writing in the form of a healthcare directive, and if you become incapacitated with an incurable illness, your family members might choose to do what most people in such a scenario would do – requesting the doctor to prolong your life to the extent possible – without knowing that it is contradictory to your beliefs.
You Might Put Your Family in an Uncomfortable Situation
Making end-of-life care decisions for a loved one is not easy – to put it mildly. If you fail to discuss your healthcare preferences with your family – particularly regarding end-of-life care – and fail to spell it out in the form of an advance healthcare directive, your family might have to make decisions on your behalf – without actually knowing what you would have wanted them to do – which can put them in an extremely uncomfortable situation.
How to Plan for Incapacity
Create a Power of Attorney
Granting financial power of attorney to a trusted person is the best way to make sure your finances are handled exactly the way you want them to be in the event of your incapacity. The person you choose will have the authority to pay your bills, file tax returns on your behalf, handle your investments, and manage other financial affairs.
Set Up a Living Trust
You can set up a living trust, put all your assets in it, specify how it should be managed in the event of your incapacity, and designate a successor trustee. While you are healthy, you can be the grantor and trustee of your own trust and manage it. If and when you become incapacitated, your successor trustee can step in and manage it on your behalf.
Create an Advance Healthcare Directive
You can create an advance healthcare directive which clearly spells out your healthcare preferences – from specifying who should serve as your primary physician to choosing the kind of treatment you want to receive – or not want to receive – in the event of incapacity.
You should also designate an agent who will make these decisions on your behalf as well as an alternative, who can step in if the originally designated agent is unable to or unwilling to do their duty.
Wondering How to Plan for Incapacity? Our Southern California Estate Planning Attorneys Can Help!
The Covid-19 crisis has shown that even the healthiest of people can get critically ill in no time. This is why you should have an incapacity plan in place – regardless of how young or old you are.
The estate planning attorneys at Garmo & Garmo have over 80 years of combined experience in planning for incapacity. We can help you create a comprehensive plan which includes a financial power of attorney and an advance healthcare directive to make sure you are treated, and your finances are handled exactly as per your wishes in the event of your incapacity.
To find out more about incapacity planning, call us today at 619-441-2500 or contact us online and schedule a free and confidential consultation with one of our attorneys.