Who Will Manage Your Assets if You're Incapacitated?
With Proper Planning You Decide
Incapacity Planning is planning for the unfortunate circumstance of becoming unable to control your finances or health decisions. This could be brought on by an accident, illness, or old age. If you don't plan for your incapacity, you run the risk of the courts interfering and acting inconsistently with your intended desires.
There are two foundational legal documents for managing finances that must be in place before becoming incapacitated:
Financial power of attorney: This legal document gives your agent the authority to pay bills, make financial decisions, manage investments, file tax returns, mortgage and sell real estate, and address other financial matters.
Revocable living trust: This legal document has three parties to it: the person who creates the trust; the person who legally owns and manages the assets transferred into the trust (the "trustee"); and the individual who benefits from the property transferred into the trust (the "beneficiary").
There are three essential legal documents for making healthcare decisions that must be in place before becoming incapacitated:
Medical power of attorney: This legal document, also called a Medical or Health Care Proxy, gives your agent the authority to make healthcare decisions for you if you cannot do so because you have become incapacitated.
Living Will: This legal document memorializes your medical decisions about end of life care. The goal is to keep you as comfortable as possible, but not extend your life with useless medical heroics. Even though these may not be legally enforceable in some states, they can provide a meaningful sharing of your wishes to help guide your decision makers.
HIPAA authorization: Federal and state laws dictate who can receive medical information without the written consent of the patient. This legal document gives your doctor or other health care provider the authority to disclose your medical information to the agent selected by you.