Make decisions now in the event you can’t make decisions later
Incapacity planning is the piece of estate planning that we most often find missing. Most people understand the importance of clarifying how assets are managed upon death, but what about decisions made on your behalf in the event that you are still alive, yet unable to make decisions yourself?
This is where Incapacity Planning plays an important role, and there are two main documents to have included in your estate plan.
The Financial Power of Attorney allows your agent to step in and pay your bills should you become incapacitated during life. Your agent may act on your behalf and do things you may not be able to do because of incapacity reasons.
You can arrange to have this document effective immediately, or, you can set this document to become effective only upon incapacity at a future date.
The Advanced Directive goes by many different names, depending on the state in which you live. You may hear it called your Medical Advanced Directive, your Medical Power of Attorney, or something else.
The two key components of this document are:
When choosing an agent, whether for your Financial Power of Attorney or your Medical Power of Attorney, it is important to choose someone who is aligned with your way of thinking, somebody who is trustworthy, and somebody who will carry out your wishes. We would also recommend that, where possible, you choose somebody who lives relatively near you.
You may choose to have the same person act as the agent for both your Financial Power of Attorney and your Medical Power of Attorney, or you may choose to have separate people handle the responsibilities of each.