Well, as you’re stocking up on toilet paper (yes, again!) and loading up your Netflix queue for those cold winter nights (why is it dark soooo early??!), don’t forget one of the most crucial pandemic to-dos.
Welcome back for part two of the three-part series about estate planning in the age of Covid-19 (Missed part one? Check it out here!). Today we’re chatting about incapacity planning, and I'm dropping all kinds of knowledge for ya. If you’re not familiar with it, that’s okay. In fact, most people don’t have an incapacity plan--but they should. And soon.
Incapacity planning is the process of making choices now about what you want to happen if you can no longer make or express those choices yourself.
And--just as importantly--an incapacity plan helps your loved ones be able to act promptly in an emergency without red tape and without second-guessing your wishes.
Many of us think about incapacity planning as something to set up for when we’re elderly, such as planning for if we develop dementia. But . . . the truth is that any one of us could become severely injured or ill at any time, at any age. So no matter if you’re 21 or 91, lifetime incapacity planning is a crucial piece of “estate” planning and should address both temporary and permanent incapacity.
Like with planning for after your death, incapacity planning may be scary or emotional to think about, let alone talk about.
This pandemic has made it impossible to ignore thoughts about mortality--our own, or that of our families and friends. In addition, the news is filled with stories of full ICUs and end-of-life care. These stories are hard to hear, but they do bring home for us the importance of planning for these possibilities.
If you are in a car accident, then what? If you are sick and unable to make decisions for yourself, then what? If you need major surgery, who can make decisions for you while you’re under anesthesia?
In the event that you cannot make decisions about your finances or your medical care, who will?
Appointing someone you trust to make informed decisions about your medical care is a necessary step, and also someone to make informed decisions and act on your behalf with regard to your finances.
(The key right here is “someone you trust,” but you probably also want to pick someone who’s responsible and all that. This could mean that you want to pass over your ne’er-do-well older brother and instead go with your upstanding younger cousin. Up to you.)
In the last post, I talked about “controlling what you can control” by having a plan. Having a plan is almost always a good idea, and unlike your social plans (thanks, 2020!), I can help you execute an incapacity plan that is legally binding.
Just like most estate planning, not everyone’s incapacity plan will be the same.
For example, whether you’re single, in a committed relationship (but no one’s put a ring on it yet), married, or divorced, your incapacity planning is going to look very different.
Many times, however, some or all of these documents will be included:
A living will (also known as a healthcare directive) deals mostly with end-of-life care if there is no realistic medical hope of recovery.
Do you want to be resuscitated, given artificial hydration/nutrition, and donate your organs? Or perhaps none of those? A living will or healthcare directive spells out your exact wishes, and also nominates an individual to make decisions on your behalf.
Medical Power of Attorney
A medical power of attorney (also known as a healthcare proxy) gives an individual the ability to make medical decisions on your behalf if you are unable. Unlike a living will, the medical power of attorney deals with more than just end-of-life care and decisions; a medical power of attorney deals with situations where you might be incapacitated or unconscious, but there is still a realistic hope of recovery.
A HIPAA authorization (or HIPAA release) allows your doctors, nurses, and other health care providers to talk to whomever you select about otherwise confidential medical details. This authorization does not grant any decision-making authority, but it can provide your loved ones with important information when you are sick or injured, rather than being kept in the dark.
Durable Power of Attorney for Finances
A durable power of attorney for finances (sometimes just called a power of attorney) lets you choose someone to manage your financial affairs if you can no longer do so yourself. For example, this document can give your agent the power to use money from your bank account to continue paying your mortgage, your car payment, and your cell phone bill.
Does it still feel like I’m speaking a different language?
No worries--that’s why I’m here to help you through it.
In fact, in the coming weeks I’ll drop some knowledge about each of these so you can feel more comfortable when we work together on your plan.
* FWIW (that’s “for what it’s worth” if you need a text-speak refresher!), a revocable living trust is also an important part of an incapacity plan, but we'll save that for another day.
Without these key documents in place, your loved ones will have to go to the court for permission to act--even in a medical emergency. Having these documents already in place ensures that your loved ones and agents can act promptly, decisively, and without the (significant) additional costs that a court proceeding would require.
Unfortunately, predictions show infections, hospitalizations, and deaths drastically increasing over the next few months.
But even as you acknowledge this increased risk, being proactive and creating a plan for if you become sick (or injured) is an excellent way to bring yourself--and your family--a much-needed sense of peace and preparedness.
Ready to start brainstorming? Ask yourself who you’d want to make decisions for you in the event that you were incapacitated. If you’re on the fence about what medical procedures you’d like, do some Googling. Are you wanting to donate your organs, or perhaps make a gift of your body to science?
But you don’t need to have this all nailed down to get started with me.
I know that these can be challenging and emotionally-charged decisions, and I’ll guide you through them so that your incapacity planning documents reflect exactly what you want them to.
If you’re ready to get started, I’m ready to help.
Set up a free consultation so we can chat about your concerns, goals, and needs. Let’s translate your hopes and wishes into legally binding documents, so that if the unexpected happens, you are prepared.
Want to learn more?
Stay tuned for part three to learn more about guardianship planning to protect your most important asset--your children! I’ll walk you through it in a way that’s approachable and easy-to-understand. But that Netflix queue? You’ll have to make that on your own; that’s not really my area of expertise. :)
Wanna check out the other parts in the Planning During the Pandemic series? Find them here:
Part 2: Incapacity Planning (This Post)