PLANNING FOR INCAPACITY
Estate planning involves more than determining who will get your estate when you die. It can also be used to plan for the possibility of incapacity — to make plans now that willdetermine how your health care and finances will be managed if you experience poor mental or physical health in the future. Here are a few simple tools for incapacity planning:
A power of attorney is a document that authorizes someone you nominate, called an “attorney-in-fact,” to make financial decisions for you. Powers of attorney can be “springing,” meaning that your nominee’s authority as attorney-in-fact only begins after you become incapacitated, or “immediate,” meaning that your nomination takes effect immediately and remains effective should you become incapacitated.
An advance health care directive authorizes someone you nominate, called an “agent for health care,” to make medical decisions for you. The advance health care directive can also state your preferences for end-of-life and post-death decisions, such as whether to use artificial means to prolong your life, and for what purposes, if any, your organs can be donated.
Estate planning also allows you to nominate someone to serve as your conservator if a court finds that a conservatorship is necessary and appropriate. A “conservatorship” is a legal determination that a person should not make medical or financial decisions for him or herself, or is substantially unable to resist fraud or undue influence. As a result of this determination, the court appoints a “conservator” to make decisions for that person, giving preference for appointment to that person’s nominee. This nomination can be made in a separate document, but is typically included as a provision of the advance health care directive or power of attorney.
The consequences of failing to nominate an attorney-in-fact, health care agent, or conservator in advance of incapacity can be serious. Having an attorney-in-fact and health care agent can eliminate the need for a court-supervised conservatorship should you become incapacitated. In the event a conservatorship is still necessary, nominating a conservator greatly increases the likelihood that the person you want to serve as your conservator will be appointed. Proper planning for incapacity can potentially save tens of thousands of dollars in legal fees, saving money for your care and for your heirs.