When you think about estate planning, your mind likely goes to what happens after your death. It is important for your estate plan to outline what becomes of your assets after you are gone; however, it is equally crucial to prepare for the possibility of becoming incapacitated during your lifetime. By doing so, you not only safeguard your assets but also ensure that your healthcare preferences are respected. To help get you started, the Indianapolis attorneys at Frank & Kraft explain why estate planning should include incapacity planning to protect your wishes and your assets.
Incapacity Can Affect Anyone, Not Just the Elderly
While it is true that the likelihood of incapacity increases with age, it can strike at any time. Whether you are young or old, an unexpected accident or illness could render you temporarily or permanently incapacitated. During your career, you might face a sudden health crisis that leaves you unable to manage your own affairs. As you age, the risk of developing conditions such as Alzheimer’s or other forms of dementia grows. Because incapacity can happen at any stage of life, it is essential to include incapacity planning in your estate strategy.
Managing Your Assets During Incapacity
Consider a scenario where a serious accident leaves you in a coma. Unable to communicate, someone else will need to handle your financial matters. Bills must be paid, medical expenses might necessitate the sale of assets, and legal actions involving creditors, landlords, or mortgage companies might be required. If you are married, your spouse might have some authority to manage your finances, but even their powers can be limited without your explicit legal authorization. If you are single, no one has the automatic right to manage your assets, and a court may need to intervene to appoint someone to handle your financial affairs.
To avoid a judicial decision about who should control your finances, it is wise to integrate incapacity planning into your estate plan. One effective method is to establish a revocable living trust. This trust can stipulate that a successor Trustee of your choosing takes over management of your assets if you become incapacitated. As the Grantor (creator) of the trust you can even dictate what conditions must be met before you are declared “incapacitated.” Another crucial tool is a durable Power of Attorney (POA). By designating a POA, you appoint an Agent to act on your behalf in legal and financial matters. If the POA is durable, it remains in effect even if you become incapacitated.
Ensuring Your Medical Wishes Are Respected
Incapacity planning also allows you to maintain control over your medical treatment preferences. If you are unable to make healthcare decisions due to incapacity, someone will need to make those choices for you. To ensure that your healthcare wishes are honored, advance directive s are essential. A Living Will provides a legal framework for you to make decisions now regarding life-sustaining or life-prolonging medical treatments while a Healthcare Power of Attorney allows you to name an Agent to make healthcare decisions on your behalf if you are unable to do so. Without these directives, a court may appoint someone not of your choosing to make healthcare decisions for you.
The Relationship between Estate Planning and Incapacity Planning
Incorporating incapacity planning into your estate plan ensures that you and your loved ones are protected no matter what the future holds. A comprehensive plan will include legal documents that authorize trusted individuals to manage your assets and make healthcare decisions according to your wishes.
Do You Need Assistance with incapacity Planning?
For more information, please join us for an upcoming FREE seminar. If you are ready to incorporate incapacity planning into your estate plan, contact an experienced Indianapolis estate planning attorney at Frank & Kraft by calling (317) 684-1100 to schedule an appointment.
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