Your estate plan should ideally have a number of different components. Of course you must consider the matter of future financial asset distributions among your heirs. We often write about the different possibilities in significant detail here on this blog.
In this post we are going to look at another facet that you should consider: incapacity planning.
It is not something that you are going to be very anxious to think about, but the fact is that it is very possible that you will become incapacitated and unable to make sound decisions someday. Consider the average lifespan. Right now it is 78, but this average includes people of all ages. As you get older this figure will get higher for you. In fact, most people who have attained senior citizen status are likely to live beyond the age of 80.
Once you reach an advanced age you can indeed become unable to make sound medical and financial decisions. There are various different medical conditions that could strike, and one of them is Alzheimer’s disease.
Close to half of people who are 85 years of age and older have Alzheimer’s disease, so we are talking about something that is not just a very remote possibility. Those with Alzheimer’s disease are usually not going to be able to grasp complicated concepts and make good decisions.
The state would appoint a guardian to make decisions for you if you became unable to make them for yourself if you didn’t take any steps to name your own decision-makers in a legally binding manner.
Most of us would prefer to have people of our own choosing in charge of our decision-making. You can make this happen by executing durable powers of attorney.
Indiana Durable Power of Attorney
When you create a power of attorney in Indiana you select an attorney-in-fact. This individual can then act in your behalf. If it is a general power of attorney the agent would have broad power. There is also a limited power of attorney. With this device you can allow someone to act in your behalf for certain purposes, such as a real estate transaction.
These powers of attorney are not going to remain in effect if you become incapacitated. You have to execute durable powers of attorney because these powers will indeed remain intact in the event of your incapacitation.
To empower someone to make medical decisions in your behalf you create a durable power of attorney for health care. Financial decision-making will be necessary as well if you become incapacitated. As a result you should also execute a durable financial power of attorney.
It should be noted that you do not have to select the same agent to act as attorney-in-fact for both purposes. You can name two different agents if this is your preference.
- Updated Federal Gift and Estate Tax Figures for 2023 - January 26, 2023
- Why Estate Planning Is Important for Multi-National Couples - January 24, 2023
- When Do I Need to Update a Trust Agreement? - January 19, 2023