It is uncomfortable to think about these questions when you are a healthy person, in control and capable of managing your own life. It seems unnecessary and even macabre to consider what might happen if you were to become incapacitated and unable to manage your own affairs. However disconcerting this line of thought may be, now is the time to think it out, while you are still capable. Once the need arises, you may no longer have the choice.
So, what are the options?
- A Power of Attorney is a legally binding document wherein a person of your choosing is given authority to act on your behalf immediately following your incapacitation. This person will be someone you trust with your finances and with your health. Acting on your behalf, this person will be able to access your money in order to pay your bills, such as your mortgage, to ensure that things run smoothly during your recovery or for the duration of your life. The Power of Attorney can give limited or full power to another person for as long as you choose, depending on existing laws. Because designating a person to whom you will give this Power of Attorney is a conscious choice, it cannot be made once you are deemed to be incapacitated or mentally unable.
- A Trust is a legal agreement in which you place your property in trust to be owned and managed by a trustee for your benefit or the benefit of those you designate as beneficiaries. In many types of trusts, you may act as the trustee over the property you place in the trust until your death or incapacity. If you become incapacitated, the rights and authority to act as the trustee over the trust property can be automatically passed to a successor trustee of your choosing. The successor trustee will have the rights and authority to manage the property of the trust for your benefit, if you are named as the beneficiary, and/or for the benefit of others you have named as beneficiaries in the trust.
- A Guardianship/Conservatorship is granted to a court-appointed person who will oversee your medical and financial affairs. They will be your guardian and you will be their ward. Family members can apply for guardianship but the decision is ultimately made by a judge. It is a process that takes place in a public court proceeding, with all of the time consuming procedures that are expected in such an institution. This could result in disagreements among your loved ones about who is best suited to make decisions for you. Who a court appoints as your Guardian and/or Conservator is out of your control once you have become incapacitated.
If you plan now, while you have capacity, the choice is yours, if you do not make a choice now, when the time comes that you are determined to be incapacitated, the court will make the choice for you. While planning for undesirable future events may be unpleasant, the alternative is far worse. You have worked hard your whole life and deserve to be in control of decisions in your future. We encourage all of our estate planning clients to establish and keep up to date, financial and medical powers of attorney, in which they will name persons of their choosing to manage their affairs upon their incapacity. Many of our estate planning clients also, in conjunction with the powers of attorney, will place all or some of their assets in trust, with persons of their choosing named as the successor trustees with the authority to seamlessly manage those assets if the client becomes incapacitated.
Image Source: https://flic.kr/p/bAAPeq