Thinking about incapacitation is rarely pleasant, but preparing for the unexpected is a necessity. If you fail to plan properly for potential incapacitation, it is possible that the courts or well-meaning family members may interfere with your wishes. Thus, you run the risk of everybody not acting in accordance with your desires.
As such, having a plan in place for incapacitation is paramount, particularly as you age or if you have pre-existing health conditions that may lead to incapacitation. Incapacitation planning regarding your finances typically starts off with two foundational documents: Financial power of attorney and a revocable living trust.
Managing your finances while incapacitated
Financial power of attorney is the document that gives another person the right to make financial decisions in your name. It is possible to craft a financial power of attorney document in such a way to ensure that it does not come into play unless you are physically incapacitated: prior to this, the agent will have no power to act on your behalf. With financial power of attorney, your agent will be able to manage your investments, file tax returns, mortgage or sell real estate and address other financial matters as necessary.
A revocable living trust is a way to arrange your assets in such a manner that in the event of your death, your assets can go directly to your beneficiaries without needing to languish in probate first. You can also put in additional stipulations regarding what may happen to the assets in the trust in the event of your incapacitation.
Managing your health while incapacitated
Incapacitation planning regarding healthcare decisions has three core documents: medical power of attorney, a living will, and HIPAA authorization. Medical power of attorney works similarly to financial power of attorney, only that it concerns itself with medical decisions. Essentially, the person who holds medical power of attorney acts as your healthcare proxy and can make healthcare decisions in your stead if you are unable to do so. It is possible for the same person to hold medical and financial power of attorney, or you can choose two separate agents for these purposes.
A living will is particularly important when it comes to issues like organ donation and your wishes concerning life support. The living will is where you make your wishes known to your health care proxy. The health care proxy will use this document as a guide when making healthcare decisions on your behalf.
HIPAA authorization ensures that your chosen healthcare proxy has the information he or she needs to make decisions according to your wishes. HIPAA authorization allows the doctor or healthcare provider to legally disclose medical information to your agent. Without this, your agent may not be able to fully follow your wishes.
Protect your assets and yourself
Thinking about incapacitation is unsettling, but it is a reality of life for the majority of Americans. Protect your interests and make your wishes known by having a complete incapacitation plan in place.
With these documents, you can have confidence that whatever comes after your incapacitation is in accordance with the decisions you would make on your own were you able to make them. Contact us today at AmeriEstate to get started with planning.