A common misconception is that estate planning equates to death planning. But planning for what happens after you die is only one piece of the estate planning puzzle. It is just as important to make a plan for what happens if you become mentally incapacitated.
What Happens Without an Incapacity Plan?
Without a comprehensive incapacity plan, a judge can appoint an agent, known as a guardian to take control of your assets and make all personal and medical decisions for you under a court-supervised guardianship. The guardian must report all financial transactions to the court either on an annual basis or at least every few years. The guardian is also typically required to obtain court permission before entering into certain types of financial transactions (such as mortgaging or selling your real estate) or making life-sustaining or life-ending medical decisions. The court-supervised guardianship will then continue until you either regain capacity or die.
Who Should You Choose as Your Financial Agent and Health Care Agent?
As you can see above, a guardian has an important and involved role in your life if you become incapacitated.
Creating an incapacity plan can help you create a plan that will avoid a court-supervised guardianship.
Rather than having a judge decide, your incapacity plan will have you appoint one or more agents to carry out your wishes. There are two very important decisions you must make when putting together your plan:
- Who will be in charge of managing your finances if you become incapacitated (your financial agent); and
- Who will be in charge of making medical decisions on your behalf if you become incapacitated (your health care agent).
The most important part of these designations is that you can leave written instructions to guide your guardian make the decisions as you would have wished those decisions made.
For Factors to consider when naming your guardian or guardians, get tuned for out next post . . .
If you have any questions on the subject or would like to know something specific on the subject, post it below or email me at email@example.com.
Yahima Suarez, PA