In the event that you become incapacitated, you need a solid estate plan in place that can protect your well-being and your finances. Without an estate plan, your finances and your health are in the hands of the court. To prepare a plan that meets your estate’s needs, you will need three essential incapacity documents:
Advanced Medical Directive
An advanced medical directive lets you appoint a person to make medical decisions on your behalf. These decisions are already predetermined and listed in your living will. Your proxy is responsible for following your preset wishes if you cannot make decisions for yourself. When you don’t have a medical directive in place, your loved ones will have to go to court to discuss what treatments you should receive, any life-saving procedures and basically who will be in charge of your medical care.
Financial Power of Attorney
Financial power of attorney designates a person who will take charge of your finances. This person only becomes responsible for your finances once you’re diagnosed as incapacitated beyond being able to make rational decisions for yourself. If you haven’t granted anyone power of attorney, the courts have to appoint someone to manage your finances.
Revocable Living Trust
A revocable living trust covers your finances and assets in the event you’re mentally incapacitated. You can pick a disability trustee who manages the assets in this trust once you’re incapacitated. Your trustee can use funds from the trust to take care of your family as well. Without a trust, the courts will appoint someone to manage your assets and finances, and it could very well be someone you wouldn’t have chosen yourself.
Protect yourself and your estate by preparing these three essential documents to ensure that your wishes are followed when you are no longer able to make decisions for yourself.
- 10 Estate Planning Tips to Help Your Plan Succeed - September 7, 2023
- What Bruce Willis Can Teach Us About Incapacity Planning - August 29, 2023
- What You Need to Know about an Inherited IRA or 401(k) - August 17, 2023