“If the fear of bad things happening is keeping you from doing incapacity planning, you should realize that once you have your documents you can relax, knowing that if the worst-case scenario does come to pass, you are covered.”
It is scary and unsettling to think of growing old and feeble. You feel vulnerable and less than safe. Instead of doing mindful planning to ensure that you have enough money, proper care, and a comfortable environment, many people live in a state of denial and simply hope for the best.
This mindset is like setting out to drive from the East Coast to the West Coast with no spare tire, no credit cards, no auto insurance, no AAA coverage, no emergency supplies and no way to pay for any crisis that may arise along the way. It is much better to anticipate what might go wrong and to prepare for it. On the road trip of life, plan for what you would want to happen, if one day you cannot decide for yourself. Here are three reasons to plan for incapacity.
- Incapacity Planning Documents Speak for You When You Cannot
A well-crafted power of attorney (POA) can direct how you want your financial affairs handled, if you cannot manage them. You can give instructions on running your business, an action plan for your investments and identify who you want to raise your children. These are just a few examples of the subjects you can cover in incapacity planning tailored to your needs and wishes. Typical incapacity planning documents include a:
- living will that details the medical care you want or do not want, if you become incapacitated
- health care power of attorney that appoints someone as your medical decision-maker
- financial power of attorney to make your financial decisions
- will to distribute your assets. If you are incapacitated, you cannot make a valid will.
- Avoid Expense and Family Disputes
Yes, it costs money to have a lawyer prepare the legal documents for incapacity planning. However, it can cost far more if you do not have the papers that direct your medical care. In Terri Schiavo , a young woman was in a coma. Her doctors said she was in a persistent vegetative state with only a feeding tube keeping her alive. Her parents battled her husband for 15 years over removing the feeding tube. They spent millions of dollars on legal fees, taking the case to the U.S. Supreme Court.
Had Terri prepared a health care directive however, she did not want to be kept alive if in that condition, there would have been no protracted legal battle that ripped apart a family and prolonged their grief. She could have been kept alive by whatever means necessary, which also would have prevented the legal battle. You can select whatever medical care you want in your medical POA – do not opt for them to “pull the plug.”
- Your Wishes Might Differ From Your Next of Kin’s Choices
If you do not leave binding written instructions, your next of kin likely may make decisions for you. Let’s say your spouse, however loving, is a terrible money manager. If you do not set up a durable POA for financial decisions, your adoring spouse might bungle your assets and lose your life savings, leaving nothing for your care.
If the fear of bad things happening is keeping you from doing incapacity planning, once you have your documents you can relax, knowing that if the worst-case scenario comes to pass, you are covered. You should have a local estate planning lawyer prepare your documents, because the laws are unique in every state and this posting is about the general law.
TIAA/CREF. “Planning for incapacity.” (accessed January 21, 2018) https://www.tiaadirect.com/public/pdf/C6973_knh_planning_incapacity.pdf
American Bar Association. “Estate Planning for Old Age and Incapacity.” (accessed January 21, 2018) https://www.americanbar.org/publications/gp_solo/2015/november-december/estate_planning_old_age_and_incapacity.html