You may become unable to handle your own affairs late in your life. To account for this possibility, an incapacity plan should exist within your broader estate plan. Incapacity planning will typically include the execution of documents called durable powers of attorney.
Most people are aware of the fact that a power of attorney is a legally binding device that is used to appoint someone else to act on your behalf. Durable powers of attorney are used to prepare for possible incapacity, because they remain active upon the incapacitation of the grantor. A power of attorney that is not durable would no longer be effective if the grantor was to become incapacitated.
When you create a power of attorney, you decide when it will become effective. It can become effective immediately after you sign it, it could become effective on some particular future date, or it could spring into effect if a particular event was to take place.
If you are executing a durable power of attorney to account for possible incapacitation, you are probably not going to want to pick out a certain date, because you have no way of knowing if or when you may become incapacitated. You could be 25 years old and become incapacitated tomorrow because of catastrophic injuries sustained in a car accident.
You would probably want your durable power of attorney to become effective immediately. However, it is possible to create a springing durable power of attorney. This type of POA would only become effective if you were to become incapacitated.
Importance of Incapacity Planning
It can be hard to imagine a time when you will be unable to handle your own personal, medical, and financial decision-making. You may fail to put an incapacity plan in place because you are under the impression that you will probably never become unable to manage your own affairs.
In truth, a very significant percentage of senior citizens become unable to make sound decisions late in their lives. There are various different causes of incapacity as we all know, but Alzheimer’s disease is a major culprit.
When you create durable powers of attorney to account for the possibility of incapacity you prevent a guardianship proceeding. If interested parties were to feel as though you had become unable to handle your own affairs, they could petition the state to appoint a guardian to act on your behalf. Ultimately, the state would decide your fate.
You can take the matter into your own hands and prevent a guardianship proceeding. When you execute a proper incapacity plan, your own hand-picked decision-makers will be legally empowered to act on your behalf if it becomes necessary.
If you would like to discuss incapacity planning with a licensed attorney, contact our firm to schedule a free consultation.
Parman & Easterday