Why Planning for Incapacity Is Essential

Everyone expects to make decisions about how their money will be spent, what healthcare providers can and cannot do if they are sick or injured, and how their estate will be handled at the time of their death. Unfortunately, life is unpredictable, and events might take place that make you unable to make these decisions. Here’s why planning for incapacity is essential and how you can do it with a comprehensive estate plan. 

What is Considered Incapacity?

In the legal sense, incapacity refers to being unable to make decisions for yourself due to physical or mental impairments. Your limitations might be temporary due to an illness or injury, or permanent due to a chronic condition or advanced age. 

If you fail to plan for incapacity, relatives, healthcare providers, or court-appointed conservators may not know what your personal preferences are and may not act in your best interests. Having a plan in place can not only ensure your wishes are carried out with respect to various important decisions, but it will also save your loved ones significant stress and possible financial burdens. 

When You Should Plan for Incapacity

There are many misperceptions about incapacity planning and the need for it. Many people mistakenly believe they can put off creating these documents until later — when they really need them. But, when you need them, it will be too late. 

There’s a good chance you won’t be making your own medical decisions at the end of your life. Waiting until advanced age, however, could be a grave error. If you are injured or become seriously ill, your loved ones will count on you having your affairs in order. 

Legal Estate Planning Documents Addressing Incapacity

The time to create incapacity documents is the moment you learn about their importance — now. Here are some of the most common documents used to address incapacity that you can include as part of your estate plan:

Financial Power of Attorney

A financial power of attorney appoints a trusted agent who will take charge of your business and financial affairs only after you have been diagnosed as physically or mentally incapacitated. 

Medical Power of Attorney

Also known as a Healthcare Proxy, this document allows you to choose someone to make decisions and coordinate your healthcare if you become incapacitated. 

Living Will

Also referred to as an Advance Healthcare Directive, this document outlines your wishes should you become incapacitated or unable to provide informed consent regarding your medical care. It should be as detailed as possible so your representative and medical providers can understand and follow your directions. 

HIPAA Authorization

The Health Insurance Portability and Accountability Act (HIPPA) is a federal law mandating that covered entities such as healthcare providers, nursing homes, and insurance companies protect your medical information and privacy. A HIPPA authorization allows you to waive your right to privacy so that these entities can share information with family or others in specific circumstances. 

Revocable Living Trust

A revocable living trust ensures your assets will continue to be managed appropriately when you are not able to do so yourself. This estate planning document creates a trust in which you transfer your assets. You will manage the assets during your lifetime, but the trustee may need to take over should you become incapacitated. 

Choosing People You Trust and Communicating Your Choices

Preparing for your future today is a critical way to ensure the protection of your best interests should you become incapacitated. The best way to do this is to work with an experienced estate planning attorney who will guide you through this process and help you create legal and clear documents that will be recognized under your state’s law. 

In addition to having the right attorney in your corner, you need to select individuals who will act on your behalf should you become incapacitated. These people can be family, friends, or professionals who you trust to carry out your wishes. Make sure you consent with these people and communicate your plans early so there are no surprises or confusion. 

Plan for Potential Incapacity with a Thorough Estate Plan

You never know when incapacity will hit. Sure, it’s more likely to happen with advancing age, but accidents and sudden illnesses can create conditions in which you are no longer able to handle your own affairs. Once that happens, it will be too late to create the legal documents you need. You need to do this now. 

Louisville Estate Planning Attorney is dedicated to providing people who are interested in protecting their rights and securing their financial futures with the information they need to make the most informed decisions possible. We can connect you with an experienced estate planning attorney who will help you plan for incapacity as part of a thorough and legal Kentucky estate plan.