Estate planning for incapacity is essential. To make financial decisions during incapacity there must be at least one document in place which authorizes someone to make financial decisions for you. Without such a document it may be necessary for your family to obtain a court-appointed guardianship of your person and property. The best incapacity planning utilizes a revocable trust to accomplish your goals.
Once your revocable trust is established, you transfer your property to the trust, in which you have initially named yourself as trustee. As trustee, you manage your assets for the benefit of yourself (and family members). At death, the trust distributes your assets to the beneficiaries you have designated. If you become incapacitated prior to death, your successor trustee will manage the assets to take care of you. By naming a successor trustee, usually a spouse or child, you can accomplish incapacity care planning. When you create a trust you can give property to it. Only the assets owned by the trust will be managed by your successor trustee. If you have assets outside of the trust, for example, an IRA or other retirement plan assets, you will need someone to manage those assets. That can be accomplished through the use of a Durable Power of Attorney. With a durable power of attorney you nominate someone to make financial decisions for you if you’re unable to make those decisions for yourself. So, in order to achieve proper incapacity care planning you should have a revocable trust and a durable power of attorney. Also of great importance are health directed documents such as a Health Care Designation and a Living Will. The Health Care Designation appoints an agent to make medical decisions for you if you are unable to direct your medical care, and the Living Will sets forth your preferences and wishes regarding those decisions.
