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Planning for Incapacity


While no one likes to think about becoming incapacitated, a comprehensive estate plan should nonetheless prepare for this possibility. In addition, it also ensures that a person’s assets and well-being will be safeguarded.

Durable Power of Attorney for Finances

One important estate planning instrument is the durable power of attorney, which allows a person to appoint a third party to act on his or her behalf for financial purposes should the person ever become incapacitated. If this occurs, the chosen third party will be able to step in and take care of the incapacitated individual’s financial affairs immediately. Without a durable power of attorney, a court must appoint a conservator or guardian to represent the incapacitated individual, which takes time, costs money, and may result in a person being chosen who would not have been the individual’s preferred choice.

Most powers of attorney take effect immediately once executed, with the understanding that they will not be used until and unless the grantor becomes incapacitated. However, they can also be written so that they do not become effective until incapacity occurs, which is known as a springing power of attorney.

A person can revoke or cancel a power of attorney at any time by simply destroying the document, executing a new one, or putting his or her wishes regarding cancellation in writing. No reason for cancellation must be given.

Health Care Decisions

As a result of many well-publicized “right-to-die” cases, states have made it possible for individuals to create detailed instructions regarding the kind of care they would like to receive should they become ill or otherwise unable to make such decisions themselves. Known as advanced directives, individuals can prepare written documents instructing doctors and family members about what type of treatments to administer or withhold in the event of coma, terminal illness, or other incapacitating health crises. Two types of advanced directives are the durable power of attorney for health care (also called a health care proxy) and a living will.

Health Care Proxy

Like a durable power of attorney for finances, a health care proxy allows a person to appoint a third party to act as his or her agent, but for medical rather than financial decisions. Generally, a health care proxy takes effect only when a person requires medical treatment and a physician determines that the person cannot communicate his or her wishes. Individuals can give their agents as much or as little as authority as they want to make some or all health care decisions on their behalves.

Living Will

Living wills are written documents that detail how individuals want to be treated if they are not able to make their own decisions about using life-sustaining medical treatment. Specifically, a living will states under what conditions life-sustaining treatment should be terminated or maintained if a person is terminally ill, in a coma, or in a vegetative state. Like a health care proxy, a living will takes effect only upon a person’s incapacity. And, a living will can also be revoked whenever a person wants.

On its own, a living will is a very limited document, because it simply dictates when life support should be withdrawn (or continued) when a person is terminally ill or in a coma or vegetative state. In contrast, a durable power of attorney for health care is a more comprehensive and flexible document. It can cover any health care decision rather than those pertaining only to whether life support should be continued.

Who will inherit a person’s property at death? What type of medical treatment is wanted—or not wanted—if a person becomes terminally or critically ill? Are there any family members who can manage a person’s legal and financial affairs if he or she is unable to do so? Addressing these and other issues before illness or death occurs is important to ensure that assets pass to the intended parties and to guarantee that a trustworthy person is appointed to make medical and financial decisions on behalf of an incapacitated individual. A simple will or trust, a durable power of attorney, and an advanced medical directive are just a few of the important estate planning tools that can be used to accomplish these goals.




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Content copyright © 2014 by Denise M. Castille. All rights reserved.
This content was written by Denise M. Castille. If you wish to use this content in any manner, you need written permission. Contact Denise M. Castille for details.

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