How can I plan for incapacity or disability with an estate plan?
Estate planning is not just about distributing your assets after you pass away. It is also about making provisions for potential incapacity or disability, ensuring that your financial, legal, and healthcare matters are taken care of in the event you're unable to make decisions for yourself.
McAdams Estate Planning provides individuals and families with comprehensive estate planning services that go beyond just addressing what happens after one's passing. We strive to help people plan for the unexpected, such as incapacity or disability, to ensure their security and peace of mind during challenging times. Some of the measures we put in place include setting up a durable power of attorney, creating health care proxies and living wills, and establishing revocable trusts.
Establish a Durable Power of Attorney
A durable power of attorney (DPOA) is a legal document that designates someone you trust to manage your financial affairs in the event you become incapacitated. This person, known as your "agent" or "attorney-in-fact," will have the authority to make decisions related to your finances, such as paying bills, managing investments, and accessing your bank accounts.
It is crucial to select a reliable individual who understands your financial situation and can act in your best interests.
2. Create a Healthcare Proxy and Living Will
In addition to financial matters, it is essential to address your healthcare decisions. A healthcare proxy, also known as a healthcare power of attorney, allows you to appoint someone to make medical decisions on your behalf if you cannot do so. This person should be aware of your preferences for medical treatment.
A living will, on the other hand, outlines your wishes regarding end-of-life medical care, such as life support, organ donation, and other critical decisions. These documents provide guidance to your loved ones and healthcare providers during challenging times.
3. Set Up a Revocable Living Trust
A revocable living trust is a valuable tool for managing your assets in the event of incapacity or disability. You act as the trustee of the trust, maintaining control over your assets while you're capable. However, you also appoint a successor trustee who will take over in case you become incapacitated.
The successor trustee can manage your assets and distribute them according to your instructions, thereby avoiding the need for a court-appointed conservatorship. This ensures your financial affairs continue smoothly during your incapacity.
Once these documents are created and necessary arrangements have been made, it is essential to communicate your wishes and estate plan with your loved ones. Open dialogue can help avoid misunderstandings and conflicts among family members during challenging times.
Life is unpredictable, and circumstances change. It is crucial to review and update your estate plan periodically, especially after significant life events like marriage, divorce, the birth of children, or changes in your financial situation. Keep your documents current to reflect your current wishes and circumstances accurately.
Planning for incapacity or disability in your estate plan is a crucial aspect of securing your future and ensuring that your best interests are protected when you cannot make decisions on your own. By creating durable powers of attorney, healthcare proxies, and revocable living trusts, you can maintain control over your financial and healthcare matters while safeguarding your loved ones from the burden of uncertainty and legal processes. Consulting with an estate planning attorney is advisable to create a comprehensive plan that suits your specific needs and circumstances.
At McAdams Estate Planning, we work closely with our clients to make sure that your wishes are shared with your loved ones, so that everybody is clear regarding your appointed agents and trustees, and that your healthcare preferences are clear, so everyone understands your intentions. Please contact us today if you are ready to begin your estate planning and would like to speak with an attorney and schedule your consultation.