Being unable to make decisions regarding your estate and other issues is quite frustrating. If you're incapacitated and haven't taken measures to protect your assets, the people near you are left to contest over your future. It's crucial to make plans that also consider your future incapacity. Here are frequently asked questions about incapacity planning.
What Is an Incapacity Plan?
Incapacity planning is a process where capable adults make plans about their future. The plan addresses what will happen if you lose your ability to make decisions. A basic plan focuses on your finances and health.
A good plan makes sure that if you're incapacitated, your wishes will remain protected. Furthermore, the plan assigns a person to make decisions on your behalf. For example, you have a power of attorney (POA) that permits you to appoint an organization or person to manage your financial, property, and health affairs if you become incapacitated.
What Happens If You Don't Have an Incapacity Plan?
The lack of an incapacity plan can result in time-consuming and expensive remedies for your family members. If you haven't assigned a person to work on your behalf, the financial management of your estate is controlled by the state. This is the reason you should consult an estate planning attorney to help you with a power of attorney.
The courts will appoint a conservator or guardian to oversee the control of your estate. In such cases, your spouse and family will have to petition the court if they want access to your finances. This process will involve a lot of time and money. For instance, your relatives will have to pay for legal representation and court fees.
What Are Some of the Ways You Can Plan for Incapacity?
Some of the strategies for incapacity planning involve disability insurance, property power of attorney, healthcare power of attorney, health insurance portability and accountability act authorization, and revocable living trust. The disability insurance will replace a fraction of your income if you become incapacitated.
In the case of a property power of attorney, your estate planning lawyer will help you designate a person to make decisions regarding your property if you're incapacitated. With a healthcare power of attorney, an agent makes healthcare decisions on your behalf.
If you're incapacitated, your family and friends aren't privy to information regarding your health condition. The Health Insurance Portability and Accountability Act (HIPAA) authorization allows a particular person to access your health information. Lastly, the revocable living trust allows a trustee to manage your assets if you are incapable.
For more information, reach out to a local estate planning attorney.