Many people aren’t generally enthusiastic to think about your passing or disability, and mistakenly assume that their spouse or adult children can automatically manage their financial, medical, or personal affairs should they become incapacitated.
In reality, for others to take over the management of these affairs, they must petition a court to declare you legally incompetent. This is typically lengthy, costly, and emotionally stressful. Even if the court appoints the person you would have chosen, the individual will likely have to come back to the court as required and provide detailed documentation of how he or she is spending and investing each and every penny. Every decision is subject to scrutiny.
Often children, spouses, and beneficiaries argue over these decisions, even when they are spelled out in writing. The best thing a client can do is to put their wishes in writing with their attorney to minimize the risk of future problems. The last thing people would want is for a court-appointed (and paid) individual with no allegiance to them making important decisions, or for a family to spend months and endless sums of money fighting while your medical and financial fate are hanging in the balance. These are the types of risks we assume without a proper plan in place.
A well-done estate plan will allow your family or a trusted individual to immediately take over for you should you become incapacitated. The proper legal documents will spell everything out in advance, and designate the person or persons that you trust so they will have the legal authority to withdraw money from your accounts, pay bills, take distributions, sell stocks, and refinance or sell your home, and do whatever is necessary to support and sustain you during your incapacity, while also reducing the possibility of abuse and litigation. Many people mistakenly think that a simple will can effectively protect you in the event you become incapacitated, but this is not so. A will does not take effect until you die.
Medical and Health Care Documents, Living Wills, Powers of Attorney
In addition to disposition of assets, estate planning also involves the preparation of other documents such as Health Care Directives, including Health Care Proxies, Living Wills, and Powers of Attorney.
In the event of incapacity, it is imperative that you establish a plan for your medical care. The law allows you to appoint someone you trust, such as a family member or close friend to make decisions on your behalf about medical treatment if you lose the ability to decide for yourself. Clients can do this by using a Durable Power of Attorney naming a Healthcare Proxy, as well as a Living Will which informs others of your preferred medical treatments such as the use of extraordinary measures to sustain life should you become permanently unconscious or terminally ill.
It is important to understand your options as well as the ramifications of every decision you make. It is also important to discuss with any prospective health care proxy your wishes and be sure they are comfortable stepping in and making incredibly difficult life-or-death decisions on your behalf.
Discussing and executing health care documents that may state your wishes not to have your life prolonged artificially if you are in a persistent vegetative state or an end-stage condition is one of the most emotional and difficult decisions you may ever make, and it is likely just as difficult for whomever you may nominate to carry out your wishes should the need arise. These decisions and this process may require a good deal of “hand-holding” and empathy on the part of the attorney.
Other considerations include the possible need for supplemental insurance, long-term care insurance, and life insurance. Depending on circumstances, it may be necessary to also look into Medicaid planning, as well as securing Social Security or Veteran’s benefits.