While estate planning is so often associated with death, it also has a lot to do with incapacity planning. We understand that neither of these topics are things that people really jump at the chance to discuss, but they remain important topics to confront and plan for. In fact, incapacity planning can bring you a great deal of peace of mind. We are all left wondering what will happen in the future. Even the healthiest and safest among us is not immune from sudden accident or illness. Fortunately, there are legal tools you can put in place to give you some firm ground to stand while facing the unknown road ahead.
How Can You Plan for Incapacity?
Incapacity planning may be prioritized or of increased concern for the older population, but the truth is that incapacity may befall any one of us at any time. Preparation is key in order to protect assets, well-being, wishes, and loved ones. Incapacity planning is all about what precautionary measures you can put in place now in the event of either temporary or permanent incapacity. There is a particular focus on financial management as well as healthcare preferences and decision making in incapacity planning.
A central part of incapacity planning is putting precautionary measures in place to help ensure that your finances are properly managed should you become incapacitated and unable to do so yourself. A durable power of attorney is a legal document that will allow you to designate a trusted individual as your agent empowered to manage personal and financial matters in the event you become incapacitated. This may involve having them pay bills and managing financial accounts, property, and filing tax returns. The durability feature means that the power of attorney remains in effect should you, the principal, become incapacitated.
Some also choose to put a revocable living trust in place as part of incapacity planning. With a revocable living trust, assets are transferred into the trust which means that the trust takes ownership over the property, but still allows you to manage trust property during your lifetime. You can designate a successor trustee to take over management of the trust in the event you become incapacitated, but be sure that the trust document is specific about what incapacity means and how it should be determined. The trust structure then allows for your assets to remain managed even in the event you become incapacitated
There are also several healthcare-related documents that can be a critical part of incapacity planning. For instance, putting a health care surrogate in place allows you to select a person to make health care decisions on your behalf should you become incapacitated. This means that you get the ability to select an individual you trust to make what could be difficult health care decisions on your behalf. Another valuable tool is a living will which outlines the end of life medical preferences for those with terminal conditions at the end stages of life
A HIPAA authorization is another important part of incapacity planning. The Health Insurance Portability and Accountability Act of 1996 (HIPAA) is a federal law intended to protect the privacy of medical authorization. Without HIPAA authorization, medical providers will not be able to release your healthcare information and medical status to loved ones in the event of permanent or temporary incapacity. With a HIPAA authorization, you can allow a family member or loved one access to your medical records, give them the ability to speak with insurance providers, and also inquire about the status of your prescriptions at the pharmacy.
Minnesota Trusts and Estates Attorney
At Unique Estate Law, we are here to help you put an estate plan in place that also protects you and your loved ones in the event of incapacity. Contact us today.