Let’s talk about Incapacity.
Having a solid estate plan is about more than just what happens to your stuff after you pass away. A solid estate plan includes strategies to manage your affairs if you become incapacitated during your life and can’t make decisions for yourself. Learn about why you need an incapacity plan and how you can empower your loved ones to make financial and healthcare decisions for you – and saving everyone time, money and unnecessary drama.
What happens without an incapacity plan?
Without a comprehensive incapacity plan, your family will need to go to court and ask a judge, who doesn’t know you or your family, to appoint a guardian or conservator to take control of your assets and healthcare decisions. Once appointed, this guardian or conservator will make all personal and medical decisions on your behalf and will continue to be court-supervised until you regain capacity or pass away. Until you regain capacity or die, you and your loved ones could face an expensive and time-consuming guardianship or conservatorship process. This gets worse if your loved ones can’t agree on who should take charge or on what decisions to make.
Finances during incapacity
If you are incapacitated, you are legally unable to make financial, investment, or tax decisions for yourself. Who is going to be able to pay your bills, manage investments, run your business or file tax returns?
Healthcare during incapacity
If you become legally incapacitated, you won’t be able to make healthcare decisions for yourself. Because of patient privacy laws, your loved ones may even be denied access to medical information during a crisis and end up in court fighting over what medical treatment you should, or should not, receive. Do you remember the Terry Schiavo case? Her family was involved in a 15-year legal battle over her guardianship, healthcare and end-of-life issues!
These are 5 essential tools you can put in place before you become incapacitated:
Durable Power of Attorney:
This legal document gives your agent the authority over your finances and property, such as paying bills, filing tax returns, selling real estate, dealing with insurance and other financial matters that are described in the document. In Florida, the durable power of attorney goes into effect as soon as it is signed. This is a powerful document and if it is in the wrong hands, it could be misused. You should seek the advice of an attorney on the proper use and scope of this document.
Living Will and Appointment of Healthcare Surrogate:
This legal document shares your wishes regarding end of life care if you become incapacitated. It also allows gives your agent the authority to make healthcare decisions if you become incapacitated.
This legal document gives your doctor authority to disclose medical information to an agent selected by you. This is important because health privacy laws may make it very difficult for your agents or family to learn about your condition without this release.
Designation Naming Pre-Need Guardian:
This legal document allows you to name someone in advance to act as your Florida Guardian if you become incapacitated and if a judge decides that you need a guardianship. The document also allows you to say who you do not want to be your guardian.
Revocable Living Trust:
This legal document has three parties to it: the person who creates the trust (you might see this written as “trustmaker,” “grantor,” or “settlor” — they all mean the same thing); the person who legally owns and manages the assets transferred into the trust (the “trustee”); and the person who benefits from the assets transferred into the trust (the “beneficiary”). Typically, you will be the trustmaker, the trustee, and the beneficiary of your own revocable living trust. But if you ever become incapacitated, your designated successor trustee will step in to manage the trust assets for your benefit. Since the trust controls how your property is used, you can specify how your assets are to be used if you become incapacitated (for example, you can authorize the trustee to continue to make gifts or pay tuition for your grandchildren).
Is your incapacity plan up to date?
Once you get all of these legal documents for your incapacity plan in place, don’t just stick them in a drawer and forget about them. (In fact, many banks prefer that you update your power of attorney every three to five of years, to keep the document from going “stale.”) You need to review and update your incapacity plan periodically and when certain life events occur, like moving to a new state or losing a spouse. If you keep your incapacity plan up to date and make the documents available to your trusted helpers, you can save time, money and unnecessary drama. Do you want to learn more about how attorney Myrna Serrano Setty can help you protect yourself and your loved ones? Contact her law firm today at (813) 514-2946.