You may find it hard to imagine yourself unable to make your own decisions, and this is understandable. Most people think of incapacity as something distant or unlikely to happen to them.
Yet, when you learn the facts about a looming threat that touches millions of American families, your perspective may change. Alzheimer’s disease, on its own, is enough reason to make incapacity planning a priority.
Alzheimer’s By the Numbers
According to the Alzheimer’s Association, more than 6 million Americans are living with Alzheimer’s today, and that number is projected to rise to nearly 13 million by 2050.
One in three seniors dies with Alzheimer’s or another form of dementia. In Oklahoma, thousands of families are already facing the daily challenges of this disease, and those numbers are growing each year.
These effects reach far beyond the individual. Family members often become full-time caregivers, and the emotional and financial strain can be immense.
Unpaid caregivers in the United States reportedly provide more than 11 billion hours of care annually, valued at hundreds of billions of dollars.
The average annual cost of paid care, whether in-home or in a facility, can easily exceed the median household income in Oklahoma.
These figures are not abstract. They represent real people who, without advance legal preparations, may lose the ability to make choices about their medical treatment, finances, and living arrangements.
Essential Documents for Incapacity Planning
Incapacity planning ensures that trusted individuals can step in if you cannot manage your own affairs. Several legal tools work together to make this possible.
One of the most important is the durable financial power of attorney, which authorizes someone to handle your finances, pay bills, manage investments, and take care of business matters on your behalf.
The “durable” designation means that this authority remains in effect indefinitely, even if you lose capacity.
The advance healthcare directive contains two parts: a healthcare power of attorney, which appoints a medical decision-maker, and a living will, which records your preferences for treatment in specific situations.
Including a HIPAA authorization is equally important. This document allows your chosen representatives to access your medical records and speak with healthcare providers, something privacy laws would otherwise prevent, even for close relatives.
Managing Assets and Care During Incapacity
For many people, a revocable living trust provides an additional layer of protection. While you are able, you serve as the trustee and manage the assets in the trust. If you become incapacitated, the successor trustee you selected can take over immediately without going to court.
Trust-based planning works best when coordinated with your durable financial power of attorney. Together, they allow a trusted individual to handle both trust and non-trust assets without interruption.
Early planning also helps preserve options for covering the cost of long-term care. For example, Medicaid eligibility rules often require careful timing and structuring of asset transfers. Waiting until care is needed can sharply limit these opportunities.
How This Fits Into a Complete Estate Plan
Incapacity planning is one piece of a broader estate plan. While these documents safeguard you during your lifetime, your will, trust, and beneficiary designations handle the distribution of assets after your passing.
All elements must be coordinated so that your wishes are clear and legally enforceable. This is why legal assistance is invaluable when you are planning your estate.
Learn More at an Upcoming Event!
We host seminars on an ongoing basis that cover this subject and many other important topics. There is no charge to join us, and you can get all the details here: Oklahoma City estate planning events.
Since founding Parman & Easterday in 1985, Larry has led over 1,000 free, community-service education programs and helped more than 10,000 Oklahoma families go from putting off their estate plan to getting it done. His goal for every client is the same: to become the person their family calls "the one who took care of everything."
Larry is the author of three books: The Straight Shooter's Guide to Estate Planning; Estate Planning Basics; and Guiding Those Left Behind in Oklahoma. He served as Oklahoma's Secretary of State and Secretary of Commerce, and his firm is the only member of the American Academy of Estate Planning Attorneys in the state.
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