Monday, February 23, 2015
Why Incapacity Planning is Important
No one wants to consider the possibility that one day they might not be able to manage their wealth and assets. The thought of being physically or mentally incapable of managing your financial business is a terrifying thought and no one wants to consider that it might ever happen to them. However, incapacity planning is essential to ensure that all your affairs are handled in the event that you are unable to handle them yourself. At best, it’s a precautionary measure you will never have to utilize, but will have the peace of mind of knowing it’s there if ever needed. At worst, a designated individual with whom you trust will be able to help you manage your finances and assets. Some of the benefits of incapacity planning and risks of not being prepared will be discussed further.
Alzheimer’s disease alone is an important reason why incapacity planning should be considered by everyone. Alzheimer’s disease impacts one in eight people over the age of sixty five and over half of people over the age of eighty five. With the age of life expectancy increasing as well as the rates of Alzheimer’s disease, there is a good chance you may encounter this disease at some point in your life. Besides Alzheimer’s disease, there are many other diseases and ailments that may causes impairment in judgment and ability to mentally grasp issues regarding finances, assets, and personal care.
Planning in advance ensures that if you ever are unable to manage your financial matters yourself that someone you trust will be appointed to manage them for you. Unfortunately, without incapacity planning, you are essentially leaving it to chance as to who will manage your assets when you’re unable to. If you want a choice in the matter, being proactive is essential in developing a plan for incapacity with an attorney.
One of the main reasons why many people never plan for incapacity is they may only associate it with age related diseases and ailments that they do not expect to have to worry about for many years to come. However, physical impairments could happen at any time without warning and being prepared through incapacity planning is essential.
Physical impairments are worth considering for many reasons. If you were to get into a car crash and wind up in a coma, there would be no ability for you to designate who would make decisions for your care. Other potential tragedies could include a workplace accident or a terminal illness. While no one wants to imagine that any of these things could happen to them, the reality is they are all possible and could impact a person at any time. Not preparing for possible incapacity leaves you without control of your assets and finances. All this is worth considering when deciding if it is worth taking time for incapacity planning with an attorney.
Durable Powers of Attorney
If you do not prepare for incapacity in advance, as mentioned previously, you are essentially leaving the decision in someone else’s hands. Often times, the state can appoint a conservator to handle your affairs if you become incapacitated and are unable to make the decisions yourself. While conservators are appointed to manage affairs in the matter by which they feel you would be most benefitted, if you want a choice in the matter, incapacity planning in advance of the situation is the only way.
Often incapacity planning is done through durable powers of attorney, legally binding documents granting another individual the ability to make decisions for you with your same authority. Durable powers of attorney remain in effect if you become incapacitated.
Another benefit of durable powers of attorney is that you can separate the authority to different individuals based on the subject. For instance, you could execute a durable power of attorney that lists a financial representative and a health care representative for matters involving each respective subject. This is beneficial as you can rely on different individuals based on their expertise and your faith in their ability to make the right decisions for each respective subject. The person you trust with managing your money may not be the same person you trust with managing decisions regarding your healthcare. Durable powers of attorney allow you to separate the duties to your benefit.
For all these reasons and more, incapacity planning is essential for individuals of any age to consider. Disaster can strike at any time, and it’s better to be proactive in developing your incapacity plan with consideration to how you want your personal issues to be handled.
With a little luck, you’ll never have to worry about ever being incapacitated in your life, but having the peace of mind in knowing that you will be prepared either way is beneficial in and of itself. Incapacity planning isn’t just about protecting yourself, it also impacts your beneficiaries and ensures that they will have the legal documentation they need to take care of the situation should it arise. Ensure they are prepared and not overwhelmed by matters that could have been planned for in advance.
The first step in incapacity planning is choosing a professional attorney for incapacity planning to ensure your plan is developed properly and that all of your concerns are addressed.
Finding an Attorney for Incapacity Planning
Dwight Tompkins is an attorney with years of experience in estate planning as well as incapacity planning. Choosing Dwight Tompkins is choosing a professional attorney who will ensure your incapacity plan is drafted with attention to detail and care for all your personal matters involving finances, healthcare, and other concerns.
Labels: Incapacity Planning
I help people protect their families through affordable, personalized estate planning. Tompkins-Law.com I am in solo practice in Orange County, California where I focus on estate planning, family trusts, living trusts, wills, corporations and business succession planning. I speak Spanish and serve the latino community. Fideicomisos-Testamentos.com