When you think about estate planning, you may assume that it is all about asset transfers. This is certainly an important part of the process, but there are other things to take into consideration.
A well constructed estate plan will address end-of-life issues. Incapacity is relatively common among elder Americans. As a result, your estate plan should include an incapacity planning component. An incapacity plan will typically include legally binding documents called durable powers of attorney.
Hand-Picked Decision Makers
When you create a durable power of attorney, you name someone to act on your behalf in the event of your incapacitation. Note the “durable” designation. Unlike a standard power of attorney, a durable power of attorney would stay in effect even if you become incapacitated.
There are different types of decisions that could present themselves. For financial decision-making, you could execute a durable financial power of attorney. You could name a health care decision-maker in a durable power of attorney for health care. The durable power of attorney for health care is sometimes called a health care proxy.
Your own hand-picked decision-makers would be in place to handle your affairs if you execute your durable powers of attorney.
Guardianship
If you do not create powers of attorney, a guardianship hearing could be convened if interested parties felt that you could no longer handle your own affairs. Testimony would be presented, and if the court decided that you were in fact incapacitated, a guardian would be appointed to act on your behalf.
The major difference between a guardianship and a power of attorney is the matter of choice. If a guardianship proceeding is held, you no longer control the outcome. The court would appoint a representative to act on your behalf.
The court could potentially choose a guardian that you never would have chosen yourself when you were of sound mind, and family members could disagree during the proceeding.
On the other hand, if you proactively plan ahead in advance, people of your own choosing will be empowered to manage your affairs if you become incapacitated at some point in time.
Incapacity Planning
People are living longer and longer lives, and the oldest segment of the population is growing faster than any other. Alzheimer’s disease is quite common among the oldest old, and this disease is not the only cause of incapacity.
If you do nothing and roll the dice, someone that you don’t necessarily approve of may wind up making decisions on your behalf.
Incapacity planning is a must if you want to be comprehensively prepared for the eventualities of aging. Our firm offers free consultations, and we would be glad to assist if you want to embed an incapacity plan within a broader estate plan.
You can send us a message through this page to request a consultation: Southampton PA Estate Planning Attorneys.
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