You may need incapacity planning. Here’s why
Having an estate plan in place is imperative to help you avoid probate, save on taxes, and make sure that your assets are passed on according to your wishes. It should also include a plan to manage your affairs should you become incapacitated and are no longer able to make decisions for yourself.
Incapacity planning is designed to protect you and your family should you become temporarily or permanently disabled. Do you need an incapacity plan? While it’s true that your chances of becoming incapacitated do increase as you get older, an accident or sudden illness can cause you to become incapacitated at any age.
Who will manage your assets? Care for you children? Pay your bills? If you own a business, who will make the decisions with respect to day to day operations? Who will make medical decisions on your behalf? If you don’t have an incapacitation plan in place, you run the risk of having a court-ordered conservator as the one handling your affairs.
The basic documents of an incapacity plan include:
- Durable Power of Attorney
- Advanced health care directive
- HIPAA authorization
- Revocable family trust
- Living will
The hard facts. By the numbers
Incapacity planning is a crucial part of any estate plan because you could lose everything should you become incapacitated and will have nothing to pass on to your beneficiaries. The following statistics illustrate just how important it is to have an incapacity plan in place:
- There are approximately 1.7 million traumatic brain injuries per year
- You have a 25% chance of being incapacitated, either short- or long-term, from the time you begin working until you retire
- By the year 2025, the number of people suffering from Alzheimer’s disease is estimated to be 7.1 million
- One in seven Medicare patients are the victims of a medical mistake while receiving care in a hospital facility
- On average, there are over 1 million vehicular accidents in the U.S. every year
These statistics highlight the need for having a comprehensive incapacity plan in place in order to save you and your loved ones from an expensive as well as time-consuming guardianship or conservatorship proceeding.
Getting more information specific to your situation
You’re going to need to take a number of things into consideration before you sit down with an attorney to make an incapacitation plan. What type of support would your spouse and family need? When it comes to managing your estate, who is the best person(s) for the job? Who should make healthcare decisions for you? If you have a business, who is your choice for managing your business affairs? What assets should your transfer into your revocable trust? Who should you choose as your trustee?
Consulting with an estate planning attorney with expertise in creating incapacitation plans is essential to ensure that all of the right elements are in place to protect your interests as well as those of your loved ones from conservatorship.
With more than 20 years of experience in all facets of estate planning law, San Diego attorney David Foley, can provide legal services for all of your estate planning needs.Schedule your FREE Consultation