This is part of an on-going series of blog posts titled the "What Is..." series, where we attempt to explain, in simple terms, common estate planning terms and concepts. To read other posts in this series, click here.
When people talk about “estate planning,” many times the focus is on death. However, there is another event that we recommend planning for: incapacity. The first thought people have about incapacity is that it means being in a coma. To many people’s unfortunate surprise, incapacity can and will happen under much broader circumstances.
Incapacity can be a temporary condition
If something happened while you were under anesthesia and someone needed to contact your health insurance company or withdraw money from your bank account, do you have any documents in place to allow someone to do that? Most people don’t. Or what if you had a bad reaction to prescribed medication? Who has the legal authority to act on your behalf? If you’re married, and you’re relying on your spouse to step in, being married does not automatically allow your spouse to do these things for you.
We had a client recently who had a bad reaction to medication. He had to go to the hospital and was not exactly coherent during that time. Additionally, he did not WANT to have to make financial and healthcare decisions during that time. He did not feel able to do that. And, frankly, he had more important things to focus on. He’s fine now! But during that time period, he was incapacitated. He was very happy to have documents in place to allow for someone else to handle those other issues on his behalf.
2. Incapacity can happen suddenly
Think of any car accident you saw on your way to work. The people involved did not plan for that accident to happen. One of the people may have been hospitalized either short term or longer term, during which they may have been incapacitated. They certainly didn’t plan on needing the use of their powers of attorney that day, but that’s why it’s important to plan ahead.
3. Incapacity can be longer term, or even permanent
Yes, incapacity can also involve a coma or dementia or any number of conditions that simply do not improve. Some of these conditions can be seen from a distance away (e.g. a slow onset of dementia), and sometimes they can’t be (e.g. a stroke, or catastrophic brain injury).
The problem with waiting to know that a future incapacity will occur (like dementia/Alzheimer’s disease) before executing estate planning documents is that the person must have capacity to execute documents. If there is any question about an individual’s capacity to execute documents, it may require a doctor’s confirmation and/or further legal proceedings. It’s a bit of a catch-22: when we have capacity, few people feel like they’ll ever lose capacity. When you’re already incapacitated, it’s too late. Your loved ones are stuck.
Bottom line: plan while you can. Once you have your plan in place you have the peace of mind in knowing that you and your loved ones will be taken care of properly. Contact us for a free consultation to help you construct the plan that’s best for you.