While you may be in full control of your mental faculties now, there may come a time you’re not. With the number of Alzheimer’s patients continuing to climb in the United States, it is imperative you plan for a mental disability in the future. There are three ways to do so:
- Advance Medical Directive – Your advance medical directive appoints a fiduciary to act on your behalf if you become medically incapacitated. They will decide what medical treatments you receive, if a surgery is approved by your standards and what quality of life procedures – such as a ventilator or feeding tube – can be done.
- Financial Powers of Attorney – In a financial power of attorney document, you will appoint an agent – referred to as your attorney in fact – who will manage your finances and assets on your behalf. You can make your financial powers of attorney “durable”, which means your attorney will act on your behalf immediately or you can use “springing”, which means your attorney will only act on your behalf once you’re declared mentally incapacitated.
- Revocable Living Trusts – A revocable living trust covers your financial life during and after your life. If you were to become mentally incapacitated, your assets would still be protected within the trust and your trustee will invest and manage them on your behalf – all without going to court or dealing with any courtroom hassles. The only issue is if you don’t have a power of attorney and a fully-funded revocable trust, your assets will still have to go to court when you become incapacitated.