If you do not currently have an incapacity plan woven into your estate plan, you should. Whether you are 25 or 65, incapacity planning is important because the reality is that no one knows when incapacity will strike. When it does strike, however, it can wreak havoc on every aspect of your life and the lives of your loved ones. Do not make the mistake many people do of operating under the assumption that you can worry about incapacity planning “later” because “later” may be too late. The good news is that incorporating incapacity planning into your estate plan can be done relatively easily with the assistance of your New York estate planning lawyers.
Why Do You Need Incapacity Planning?
Like many people, you likely think of “incapacity” in terms of an elderly individual suffering from Alzheimer’s disease or other old age related conditions. While Alzheimer’s certainly does lead to incapacity, and your odds of becoming incapacitated increase with age, the truth is that during your working years you stand a one in four chance of suffering a period of incapacity sufficient to require at least a brief stay in a long-term care facility. What could cause your working years bout with incapacity? A catastrophic car crash, a severe illness, or a tragic workplace accident are just a few of the ways in which you could suffer a period of incapacity. If that does happen, who will control your assets while you are unable to do so? Who will have the legal authority to pay your bills, maintain your property, or act on your behalf if a legal issue comes up? Of even more importance, who will have the right to make treatment decisions for you or decide which facility you should reside at and which doctor should treat you? Absent an incapacity plan the answer to all these questions remain unknown.
What Is Incapacity Planning?
Incapacity planning is essentially what the name implies – a legal plan to deal with you incapacity should it occur at some point in the future. Though every plan is unique, some common incapacity planning tools and strategies include:
- Power of attorney – although a traditional power of attorney, or POA, does not survive the incapacity of the Principal, a “durable” power of attorney does, making it a useful incapacity planning tool. A POA, however, can be of limited value because even with general POA over someone there are certain things you cannot do. In addition, using a POA can be problematic as third parties often make it that way.
- Revocable living trust – a revocable living trust works like this: you create the trust and name yourself as the Trustee of the trust while naming a spouse (or whoever you wish to take over control of your assets in the event of your incapacity) as the successor Trustee. You then transfer important assets into the trust and continue to control and manage then as usual unless you become incapacitated. If that occurs, control will automatically shift to the successor Trustee.
- Advanced directives – an Advanced Directive allows you to make health care related decisions ahead of time in the event you do face incapacity at some point down the road. In the State of New York, you may execute a Health Care Proxy and/or a Living Will. A Health Care Proxy allows you to appoint an Agent to make heath care related decisions for you during your incapacity while a Living Will lets you state your wishes about health care in the event that you can no longer speak for yourself.
How Can an Estate Planning Lawyer Help?
Ideally, your incapacity plan should be part of your overall estate plan. Your experienced Illinois estate planning lawyer can help you incorporate incapacity planning tools and strategies into your comprehensive estate plan, making sure all the components of your plan work well with each other.
If you have questions or concerns regarding trusts and how one might fit into your estate plan, please join us for an upcoming free seminar or contact the experienced New York estate planning attorneys at The Law Offices of Kobrick & Moccia by calling 800-295-1917 to schedule your appointment.
Latest posts by Anthony Moccia (see all)
- Beneficiary Designations, etc., Aren’t a True Substitute for a Trust - March 19, 2019
- New Tax Proposals - March 14, 2019
- State Income Taxation of Nongrantor Trusts - March 12, 2019