The Importance of Providing for Incapacity in Your Estate Plan
When many individuals think about their estate plans, they general only consider creating a Will to transfer their assets to their loved ones after death. Considering our estate planning needs also required taking into consideration and planning for incapacity. Incapacity can occur because of illness or an accident and it is vitally important that we give this as much thought as we do to passing on our assets after death. Avoiding the need for a conservatorship – the process whereby someone is appointed by a court to assume responsibility for the property or the personal welfare of an adult – and keeping your family out of Court can be accomplished by making plans for incapacity in your estate plan.
The most common ways to avoid the need for expensive and burdensome conservatorship proceedings through effective estate planning include:
Durable Financial Power of Attorney -- Executing a durable power of attorney enables you to name a conservator to act on your behalf if you become incapacitated. The conservator is empowered to handle all your financial and business affairs in case you cannot do so yourself. Although it can become effective immediately, it only becomes active if or when you become incapacitated. It must be executed prior to any incapacitation.
Advance Health Care Directive -- Executing an advance health care directive designates someone to serve as your agent for making health care decisions in the event of your incapacitation. This can include temporary hospitalizations or end-of-life care, and your choice should be someone you trust to honor your wishes when it comes to your medical care. This document must also be executed prior to any incapacitation.
Revocable Living Trust -- Executing a revocable living trust avoids the need for conservatorship proceedings by designating a successor trustee to serve during a period of incapacity. You can serve as co-trustee along with a trusted person or financial institution of your choice. If you become incapacitated, the co-trustee you have designated will take over the management of your assets held in the trust. Remember though, this is only effective if your property is properly titled in the name of your Living Trust.
One of the main goals of our law practice is to help families like yours plan for the protection of yourself and your family through thoughtful estate planning. Call our office today to schedule a time for us to sit down and talk through a Family Wealth Planning Session, where we can identify the best strategies for you and your family.