One of the Greatest Gifts to Your Family is the Plan For Incapacity
For many Americans, estate planning for their passing may seem obvious – death is inevitable, and people want to make sure that their loved ones have clear guidance on how to follow a loved one’s wishes after their death. Some people, however, may not think about incapacity planning because incapacity is not necessarily inevitable. According to the Family Caregiver Alliance, although 81% of people reported thinking about these issues, only 33% said they had completed forms associated with incapacity planning. One of the most important gifts a person can give to their family is the plan for incapacity – it protects both the person and their family by providing them guidance on care and financial plans.
Incapacity planning may seem like a daunting task, which is why it may be helpful to reach out to an experienced estate planning legal firm for support. If you are in Minnesota or Florida, you may wish to consider reaching out to Roulet Law. At Roulet Law, we provide focused and personalized attention to our clients. We can be reached at our Minnetonka, MN office at (763) 420-5087 or our Venice, FL office at (941) 909-4644.
What Does Incapacitated Mean in Legal Terms?
The Legal Information Institute at Cornell Law School explains incapacity as a term that indicates someone is unable to perform various functions. This can include:
- Physical or cognitive disabilities that prevent someone from managing their own care, property, or finances.
- An inability for someone to understand their own actions in making a will or other legal documents.
- Being unable to work, attend school, or do other normal daily activities due to disabilities or other serious health conditions.
How Is Incapacity Planning Actually Defined?
Simply put, incapacity planning is the planning that a person does for someone else to manage medical and personal decisions, as well as financial affairs, if the person is unable to manage these decisions themselves due to health issues. It is important to create an incapacity plan while you have capacity as it is impossible to know when we may lose capacity.
Where Should I Begin with Incapacity Planning?
The first step to incapacity planning is selecting someone to make decisions on your behalf. This person will be responsible for managing decisions around care and financial affairs. This person’s legal authority is temporary and only valid while you are both alive and unable to make decisions for yourself. If you regain cognitive ability or pass away, these legal powers are voided.
It is critical to name someone in the event of incapacity because if you become incapacitated and you have not named someone, the court will choose someone. This can cause a lot of pain and confusion for loved ones if the court selects someone you would not have chosen for yourself or a professional guardian who charges expensive fees. This process can also be time-consuming and exhausting for family members who may already be struggling with the emotional hardships of their loved one’s illness. The experienced and compassionate estate planning Roulet Law Firm may be able to assist you in incapacity planning to help prepare your family in the event of incapacity and avoid the difficulties that can follow a lack of incapacity planning.
What Documents are Important for Incapacity Planning?
Some of the documents that are important for incapacity planning include:
- Healthcare proxy
- Living will
- Durable financial power of attorney
- Revocable living trust
- Last will and testament
This document names someone who acts on behalf of the incapacitated person and makes medical decisions around their care. This is especially important for your family; without someone clearly named, family members will have to ask the court for permission to act on your behalf.
Also called an advance directive, this is another legal document conveying a person’s wishes on the kind of medical care they would like to have during their incapacity. It includes the type of life-sustaining measures that they would like to receive or have withheld in the event of their incapacitation. This is especially important for end-of-life care to avoid measures that may prolong your life against your will.
In many states, such as Minnesota, a healthcare proxy and liivng will are combined into a single document called a Health Care Directive. Again, it is important that you name agents to act on your behalf, provide them with clear instructions for your care an ensure that your directive is compliant with the federal health care privacy law known as the Health Insurance Portability and Accountability Act or "HIPAA".
Durable Financial Power of Attorney
This document designates someone to manage personal and financial matters in the event of incapacity. This may include:
- Paying bills
- Managing bank accounts
- File tax returns
- Handle investments
When designating a financial power of attorney, you can decide which rights to grant – for example, they may be able to pay bills or taxes but not make decisions about investments or buying or selling property. Alternatively, they may have full rights over all financial decisions.
Revocable Living Trust
Under a revocable living trust, your property is transferred to the trust but you may continue to manage it throughout your life. This can be a helpful document for incapacity planning because the person making the trust, the grantor, can designate someone to manage the trust’s assets in the event of the grantor’s incapacity. The trust can include instructions on legally binding instructions on care management in the event of incapacity and even what conditions must be met in order for the grantor to be considered incapacitated.
Last Will and Testament
A will establishes how property will be distributed and, if someone has minor children, who will be named as guardian for them in the event of your passing. While this is a critical document in estate planning and incapacity planning, just the last will and testament may not be enough as it only goes into effect following your death and does not govern situations related to incapacity.
How an Experienced Estate Planning Lawyer May Be Able to Help
Incapacity planning may seem overwhelming for many – no one likes to think about what steps their loved ones may need to take in the event of their incapacity. Experienced estate planning lawyers may be able to help guide you through the process. At Roulet Law, we focus on providing personalized attention to clients in Minnesota and Florida every step of the way. Consider reaching out to us for a consultation at our Minnetonka, Minnesota office at (763) 420-5087 or our Venice, Florida office at (941) 909-4644.
And, if you would like to learn how to make it as easy and inexpensive as possible for your family to manage your affairs during incapacity and after passing, while ensuring your assets only go to whom you want and how you want, click here to register for our FREE online masterclass.
And, if you would like to learn how to protect your home and life savings from long-term care and nursing home costs, click here to download our FREE guide Save our Home: How to Protect Your Home and Life Savings From Long-Term Care and Nursing Home Costs.