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Why Planning For Incapacity Is Essential

planning for incapacity

None of us knows what the future holds, and this truth has been realized more than ever during the past few years. Despite diligent planning, an unexpected event can abruptly turn our lives upside down. And this is why planning for incapacitation is so important.

Incapacity planning is an area of estate planning that many people overlook. The main reason for this is that, while our eventual death is a certainty, incapacitation is only a possibility. But while we all hope that we will be of strong mind and body up until our death, the reality is that if you live long enough, there is a pretty good chance that you will face a situation where other people will have to make important decisions for you.

What is Included in an Incapacity Plan?

An incapacitation plan is one that involves preparing customized legal documents to authorize trusted individuals to make healthcare and financial decisions on your behalf (if you are unable to do so yourself). The components of an incapacity plan may vary from one individual to another, depending on their specific needs.

Here are some of the important documents that are frequently included with an incapacity plan:

  • Financial power of attorney. A durable power of attorney for finances is a document that allows the creator to designate someone to handle their financial affairs if/when they can no longer do so themselves. The financial power of attorney can go into effect immediately or be triggered by a future event, such as incapacitation.
  • Healthcare power of attorney. A healthcare power of attorney is similar to a financial power of attorney in that it designates someone of your choosing to make medical decisions on your behalf if you are no longer able to make those decisions yourself. You can choose the same person for both the financial and healthcare POAs, or you can give these responsibilities to different individuals.
  • Living will. Also known by the terms “advance healthcare directive” and “advance medical directive”, living wills are documents that spell out in advance what kinds of medical procedures and care you want to receive and what to refuse should you lose consciousness or become incapacitated.
  • Do not resuscitate (DNR) order. A DNR order could be part of the living will or it could be prepared as a separate document. This type of order states under what conditions you want to be resuscitated if you stop breathing or your heart stops beating.
  • HIPAA release. Signing a HIPAA release authorizes your relatives or other individuals you select to speak with medical professionals and healthcare providers about your otherwise confidential medical records if you become incapacitated. This release would provide your family members with more detailed information about your health condition so that whoever has power of attorney can make a more informed decision about the type of care you should receive.
  • Revocable living trust. A revocable living trust is an entity you can create to house your assets and property and allow it to pass directly to your heirs without the need for probate. Often used as an estate planning tool, this type of trust is also very useful for incapacity planning, because it allows you to name a successor trustee to take over management of the trust should you become incapacitated.

The Cost of Not Planning for Incapacitation

Creating an incapacity plan will cost some money on the front end to prepare the necessary documents. You should also ensure that you are working with a skilled and knowledgeable attorney who will take the time to thoroughly discuss your circumstances and customize the plan that best fits your needs.

Should you become incapacitated in the future, the cost of not preparing for this possibility could be significant for both you and your family. Without an incapacitation plan in place, your loved ones could be placed in a difficult position being uncertain about how to help you or what decisions to make on your behalf. This could even result in bitter family disputes that could continue long after you are gone.

With a comprehensive incapacity plan, you can erase this uncertainty and rest easy knowing that you have the right people and documents in place in the event of a worst-case scenario.

Consult a Seasoned Virginia Estate Planning Attorney

Ready to get started on your estate plan in Virginia? Buck, Toscano & Terezkerz is here to help. Message us online or call our Charlottesville office today at (434) 977-7977 to speak with a member of our legal team.

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