The biggest risk for most people is not death, it is becoming incapacitated. Incapacity means you are unable to make decisions for yourself. If you suffer from an injury, dementia, stroke, heart attack, etc., you may become temporarily or permanently incapacitated.
When you become incapacitated who is going to manage your financial affairs and make medical decisions for you? A Will wont help. A Will can only deal with what happens after you die. Owning property or assets jointly doesn’t help either. With some assets, especially real estate, all owners must sign to sell or refinance. Oftentimes, when there is an incapacity and assets are owned jointly then court supervision is needed.
Who Will Manage Your Health Care Decisions If You’re Incapacitated?
If you are unable to make medical decisions for yourself or communicate your own healthcare wishes due to an incapacity, and you want to have control over these decisions, then you need to have three critical documents in place to ensure you get the care you deserve:
- Health Care Power of Attorney or Health Care Proxy
This document allows you to name someone to make medical decisions for you, when you are unable to make them for yourself.
- Living Will- Advanced Directives
The Living Will expresses your wishes when you are unable to, and tells your doctors whether you want to be kept alive in a vegetative state or allowed to die. Although not legally valid in Massachusetts, it can still be invaluable in helping to guide your health care agent or other family members that may be responsible for making your healthcare decisions.
- HIPAA Authorization
This Authorization gives any and all of your medical providers the written permission to share your medical information with the individuals that you have named. Without these written instructions, your spouse and your family members may not be informed about your condition. Hospitals can refuse to disclose to them that you are even in the hospital, and even deny them the option to visit.
Who Will Manage Your Assets If You Become Incapacitated?
Financial Power of Attorney (POA)- With proper planning you will get to decide who will manage your financial affairs in the event you are incapacitated. Without proper planning the court will decide this for you. A Financial Power of Attorney( POA) gives the person of your choosing the ability to manage your finances for you on your behalf. The person you chose can take care of your banking, real estate, and investments, among other things. If there is a problem with your Power of Attorney, or you don’t have one, or a bank doesn’t accept it, a probate court will have to appoint someone to manage those assets for you. Consult with us to make sure you have the right Power of Attorney, as there are several different kinds. We can also discuss the pros and cons of relying solely on this document in a time of need. There are many situations where a Power of Attorney may not work, leaving a Revocable Trust as a better way to plan.
A Revocable Trust is a better way to plan for incapacity. When you set up the Revocable Trust, you transfer assets from your name into the name of your trust. You are able to stay in complete control now, and you can name a successor trustee who will have the legal authority to handle your affairs for you if you’re incapacitated. Unlike a Power of Attorney, A Revocable Trust is readily accepted by financial institutions and provides detailed instructions and directions that a Power of Attorney does not. You won’t have to worry about your successor trustees ability to handle your affairs for you.