Every adult should prioritize incapacity planning.

How often do you drive past a car wreck on the highway in Johnson County, Kansas, or in Jackson County, Missouri?

When was the last time you heard of the recent death or tough diagnosis of a friend or relative?

Tragedy can certainly strike suddenly.

We would not choose any of these events if we had complete control over their lives.

While you cannot choose precisely how your life unfolds, you can take steps to ensure your wishes are followed should illness or accident make it impossible to make decisions when necessary.

In short, you can plan for incapacity.

Tragic accidents can become far more terrible without incapacity planning.

What is Incapacity Planning?

Incapacity planning is a fundamental aspect of estate planning.

Proper incapacity planning requires certain legal documents to be prepared and signed to provide directions for decisions should you need assistance due to injury or illness.

These legal documents can provide instructions for your health and financial wishes.

Although many people associate incapacity with the elderly, it affects people of all ages ... starting at age 18.

Rather than waiting, it is best to prepare for the future so you are ready whether the documents are needed in a few decades or a few days.

After you are incapacitated, it will be too late to choose your agents or outline your wishes for financial management and medical treatments.

What is a Power of Attorney?

Power of Attorney (POA) documents are legally binding instructions for granting authority to an agent to manage your affairs when you cannot do so yourself.

The two primary categories are financial powers of attorney and medical powers of attorney.

Financial Power of Attorney

As the name suggests, financial powers of attorney appoint an agent to oversee your financial affairs.

This includes paying bills, handling investments, and ensuring tax returns are filed.

You should select someone who has integrity and is capable when it comes to financial matters.

Medical Power of Attorney

In some jurisdictions, a medical power of attorney is also known as a healthcare proxy.

The agent appointed in this document is given the authority to speak with your physicians and make healthcare decisions on your behalf.

Conversations with your agent, while competent, enable them to make more informed choices if you are deemed incompetent.

Can Trusts be a Part of Incapacity Planning?

Trusts can support incapacity planning and asset distribution.

What are trusts?

Trusts are legal entities for holding assets on behalf of beneficiaries.

Trustees are designated to manage assets in the trust.

A revocable living trust is particularly appealing for incapacity planning.

Why?

With a revocable living trust, the trustmaker who creates the trust can also serve as the trustee.

The trustmaker can also make changes while alive and capable.

If the trustmaker becomes incapacitated, the successor trustee can assume responsibility for managing the trust according to its terms.

Like financial powers of attorney, trusts are used to avoid needing a guardian or conservator appointed by the courts.

Instead, the trust outlines instructions for the management of trust assets.

Finances are only one component of incapacity planning.

Health care is a crucial element.

How Can Individuals Ensure Their Medical Wishes are Respected?

People will need a combination of documents to create a comprehensive approach to medical incapacity planning.

What are these?

Health Care Treatment Directive

This document, which we use in place of a "living will" in our practice, allows you to outline specific instructions regarding your desired medical treatment, such as end-of-life care, feeding tubes, or life support.

HIPAA Authorization

Anyone with contact with the medical profession has heard mention of HIPAA in their patient informed consent documents.

HIPAA stands for the Federal Health Insurance Portability and Accountability Act and is also known as the Privacy Rule.

What does it do?

It grants individuals rights over their personal health information.

Most notably, it sets limits and rules regarding who can view or receive an individual's personal health information.

A HIPAA authorization allows you to grant permission to your healthcare provider to share medical information with specifically designated individuals.

Durable Power of Attorney for Health Care Decisions

This form is distinct from a HIPAA authorization.

The HIPAA authorization grants permission for sharing medical information.

The durable power of attorney for health care decisions gives authority to your appointed agent to make medical decisions when you are incapable of doing so yourself.

What are the Consequences of Not Having an Incapacity Plan?

With no plan in place, your loved ones will be faced with numerous challenges to support you after a sudden illness or injury.

Time and money can be unnecessarily spent seeking a conservatorship or guardianship to act on your behalf.

What are the risks of court intervention?

Rather than designating who you want to manage your affairs and how you want this done, the courts will make these decisions.

Although a judge may be well-meaning, the person appointed may not align with your desires.

You will be powerless to change the outcome.

Yikes!

Incapacity planning protects your voice.

Essential to creating an effective plan is selecting the appropriate agents.

How Do You Choose the Right People?

The people you select should be individuals who have your best interests at heart, understand your values, and are willing to act upon them.

When choosing a healthcare agent, you should designate someone who knows your medical preferences and wishes and can advocate for you in unpleasant situations.

The individual you designate as a financial fiduciary should be trustworthy, organized, responsible with money, and able to comprehend your financial goals.

These roles need not be filled by the same person.

It is sometimes advisable to divide responsibilities.

What are the key points to remember about planning for incapacity?

Do not delay incapacity planning.

Choose individuals who are trustworthy and capable of serving as agents.

Outline your financial and medical wishes clearly in your legal documents.

Consider incorporating a trust into your plan.

Work with an experienced estate planning attorney to protect you, your assets, and your loved ones.