Incapacity planning is an important facet to consider when you are devising your estate plan. Many people become incapable of making sound decisions on their own at some point in time, and you can account for this through the creation of a certain type of power of attorney.
Durable Powers of Attorney
With a power of attorney, you as the grantor name an agent or attorney-in-fact. This agent does not have to be a licensed lawyer; any adult who is of sound mind who is willing to assume the role can act as an agent under a power of attorney.
You would use the powers of attorney to name people to act on your behalf in the event of your incapacitation. For a power of attorney to remain in effect upon the incapacitation of the grantor, it must be a durable power of attorney. A standard power of attorney that is not specifically designated as durable would no longer be effective if the grantor was to become incapacitated.
An incapacity plan will often include two different durable powers of attorney. A durable financial power of attorney could be created to empower a financial representative. You could also add a durable power of attorney for health care to name someone to make medical decisions on your behalf. In California, the medical power of attorney is known as the Advance Health Care Directive.
With a power of attorney, you decide when the power will go into effect. Because you have no way of knowing if or when you will become incapacitated, you may want the power of attorney to go into effect immediately after you create it.
However, if you do not want the agents to know that they have the power to act on your behalf right away, you could ask your attorney to store the documents for you. The agents could be made aware of the existence of the documents at some point in time.
A springing durable power of attorney would be another option. This type of power of attorney would not go into effect immediately after you sign in. The power would become active in the event of your incapacitation.
Importance of Incapacity Planning
When you are younger, incapacity planning can seem like an unnecessary precaution. However, when you look at the facts, you see that a very significant percentage of elders become unable to make sound decisions on their own. This is largely due to the widespread nature of Alzheimer’s disease.
If you devise an incapacity plan, you can be sure that hand-picked decision-makers will be empowered to act on your behalf if you become incapacitated as an elder.
To Schedule a Consultation
If you are interested in the possibility of working with our firm after learning these facts, please select our “Workshops” tab to RSVP for a free estate planning workshop. At that workshop you will be offered a free one-hour consultation with an attorney. www.collinslawgroup.com/seminars/
- Who Will Administer My Estate If My Executor Cannot Serve? - July 30, 2021
- What You Should Consider When Creating a Trust - July 27, 2021
- How to Leave Assets for Your Minor Children in Your Estate Plan - July 21, 2021