Planning for Incapacity / Disability

The good news, people are living longer. The bad news, people are living longer. But what if an accident, illness or just the simple effects of aging made it impossible to manage your financial affairs? As our loved ones age, have you ever considered what would happen if they were physically unable to take care of their day-to- day affairs?

When we think of "estate planning", we usually think of Wills and possibly Trusts in a effort to avoid probate. However, your estate planning should also include proteting yourself and planning for your possible incapacity. Planning for incapacity during your lifetime is as important, if not even more than planning who will get your assets after you pass. Should you not have these documents prepared with your estate plan, someone may not be authorized to make health care decisions or to take care of financial matters if you become incapacitated. Moreover, if your estate palnning documents are not in place, your family may not be in agreement and may have to go to court to get the authority to handle your medical and/or financial affiars.

Durable Power of Attorney for Financial

One way to prevent the courts from stepping in is to execute a power of attorney. It's almost impossible to overstate the importance of this document. A power of attorney is a legal document delegating authority to someone you choose to have the power to act in your place. You name someone known as an agent or attorney-in-fact (though the person need not be an attorney) who steps into your shoes, legally speaking. You can authorize your agent to do such things as sign checks, tax returns, enter into contracts, buy or sell real estate, deposit or withdraw funds, run a business, or anything else you do for yourself.

A power of attorney can be broad or limited. Since the power-of-attorney document is tailored for its specific purpose, your agent cannot act outside the scope designated in the document.

In case you ever experience situations in which you become incapacitated, you'll need what is known as a "durable" power of attorney. An important distinction between a power of attorney and a durable power of attorney is a durable power of attorney simply means that the document stays in effect if you become incapacitated and unable to handle matters on your own. Conversely, a "nondurable" power of attorney automatically ends if the person who makes the power loses mental capacity or death.

Health Care Directives

At some point in your life, perhaps as a result of illness, accident, or advanced age, you may lack the mental capacity to make or communicate responsible decisions about your own health care. Without directions to the contrary, medical professionals are generally compelled to make every effort to save and maintain your life. Depending on your attitude toward various medical treatments and your views on the quality of life, you may want to take steps now to control your future health-care decisions. You can do so by adopting one or more advanced directives for health care.

Health Care Directives are documents that specify the type of medical care you would want or do not want in the event you are unable to communicate your wishes, and appoints an agent to act on your behalf. There are three types of advanced medical directives. These Directives includes: Designation of Health Care Surrogate, Living Wills, and DNR (Do Not Resuscitate) orders.

Durable Power of Attorney for Health Care

In case you ever experience situations in which you become mentally incapacitated, you'll need what is known as a "durable" power of attorney. A Designation of Health Care Surrogate form is a witnessed written document in which instructions are given by you, the principal, in which the principals' desires are expressed concerning any aspect of his/her health care if you are unable to make them yourself. The power appoints a representative to make medical decisions on your behalf. It becomes effective only when you've become incapacitated. You decide how much power your representative will have.

Living Will

A Living Will is a witnessed written document (voluntarily executed by the principal) that instructs what care and treatment the principal wants or doesn't want under certain circumstances, such as end stage conditions and life-prolonging procedures. It is called a Living Will because it takes effect while you are still living. In essence, the Living Will lets you decline certain types of medical care, even if you will die as a result. Generally speaking, a Living Will can be used to decline medical treatment that serves only to postpone the moment of death.


A Do Not Resuscitate Order (DNRO) is a physician's order to withhold or withdraw resuscitation if a patient goes into cardiac or pulmonary arrest. It is part of the prescribed medical treatment plan and must have a physician's signature. A DNRO is your doctor's order that tells all other medical personnel not to perform CPR if you go into cardiac arrest. It is usually written for patients who are terminally ill, suffering from an end-stage condition or who are in a persistent vegetative state. The form can be signed by the principal or an agent having the powers to execute a DNRO on behalf of the principal.

We know it's not pleasant to think about the possibility of having a condition that impacts our health and prevents us from making financial and health care decisions for ourselves. Without a durable power of attorney, family and friends will not be allowed to make many important financial and health care decision on your behalf. It's better to be prepared and hope it never happens, than the alternative of having the courts step in. Families should begin to prepare long before someone starts having trouble with certain aspects of their life. Don't wait for a crisis to hit. Taking the time to prepare these documents is well worth the small effort it will take to ensure the peace of mind you deserve.

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