Prepare for incapacity
Prepare for incapacity: In part one, we touched a bit about things that are important if you become incapacitated, but the main focus revolved around taking care of your loved ones if something happens to you. (check it out here!) That is what most people think of when they think of estate planning.
It feels like people think that if they do an estate plan, it means they’re going to die. News flash- we’re all going to die and having an estate plan doesn’t make it happen any faster, just means you are prepared when it does.
However, the area that often gets overlooked has nothing to do with death, but what happens if you become incapacitated in some way, shape, or form.
If you die and you don’t have an estate plan, you just left a mess for everybody left behind. But if you become incapacitated and don’t have things set up the right way, not only can it be a mess for everybody who cares about you and is trying to care for you, it can be a mess for you too.
Nels Donovan on Planning for Incapacity
What is an Estate Plan
When it comes to the word estate plan, there’s a huge misunderstanding, I can tell you that we have dozens of client inquiries every week, where a person says, I need a will. I don’t need an estate plan that’s too complicated.
An estate plan is just simply a sequence of documents to take care of a lot of unforeseen events.
The one foreseen event is death. We can’t negotiate that, we just don’t know when it’s going to happen.
But what can happen in more of an emergent or urgent circumstance, is incapacity.
Incapacity can be an accident that results in being in the ICU, it can be an illness that winds up leaving you on a ventilator to assist your breathing, it can be some sort of infirmity from aging, or it can be an early onset of some debilitating circumstance.
The risks of incapacity are broad, we don’t all have that perfect death where we just fall asleep and never wake up in our old age.
So there are a lot of circumstances that can be doom and gloom and dire that are related to your estate plan and related to the sequence of documents to take care of or have yourself taken care of when you can’t do it.
Now, it could be your spouse that you’re appointing, it could be a partner that you are appointing it could be a parent, a sibling, or a good close friend, but you want to provide the legal structure for financial decisions as well as for dependent care decisions for minor children care decisions, in the event that you’re not there to make these decisions.
If you’ve not left any guidance, if you don’t have powers of attorney for finance and healthcare in place, your family is going to have to go through the court process that sometimes can be very invasive, arduous, and lengthy to prove that they are the right person to manage your affairs when you can’t.
Nobody wants to deal with courts at times of adversity.
So simply engaging to do an estate plan allows you to avoid all of these circumstances.
A Robust Power of Attorney (POA)
Many people plan with joint tenancy, joint ownership, and beneficiary designations, but the thing is, those aren’t triggered without a death certificate.
So if we still need to use these resources to take care of one another in the event of incapacity, then a robust power of attorney is important.
Robust, meaning one that is specific.
Think about all of the things you do on a daily basis, writing checks, paying bills, making decisions, on what route you’re going to take to work. There are a lot of decisions that you make on a daily basis.
If your power of attorney doesn’t address those in some way, your helpers may run into a barrier where some random bank institution or third party says they don’t have the legal construct to take care of xxx.
A durable power of attorney can appoint a guardian who can appoint a guardian for minor children and they can make sure that you have a batting order or a roster of helpers that have the ability to quickly and legally help you run the ship.
Then there’s health care, which is a whole separate document, this is the person who’s going to be able to help manage your medical issues.
It is it’s important that you have directions for after death, but also directions when the job of death hasn’t quite finished. That sounds a little unsavory, but it can be a reality.
It’s about retaining control. Many of us are pretty independent, we have control of what we do, and the decisions we make. Having robust Power of Attorney documents lets you retain that control by making decisions now, ahead of time.
A Real-Life Story
One of my friends was the health Power of Attorney for his mom, not his dad (her husband). The reason that his mom choose him as she knew, he was the only one that was going to actually uphold her wishes.
She got to the point where she was in hospice, and everybody else at that moment, not wanting to say goodbye was too emotional, they would have gone to great lengths to try to keep her alive, even though she wasn’t really there.
So she appointed her son because she knew he could make make the decision, not because he loved her less but because he loved her enough and was strong enough to uphold her wishes.
DYI POA Problems
Searching for a power of attorney document on Google may not suffice for the task at hand. It might resemble a quick fix for a significant problem. Consider the most basic level of comprehension. Reflect on past frustrations when dealing with individuals who may not have grasped your objectives. This is not intended to belittle anyone; I believe that most people have some understanding of their affairs.
However, legal documents must be crafted with the lowest common denominator in mind. For instance, there are individuals who lack the inclination to invest money in a CD or savings account, even when it’s not earning any interest. They prefer to stash it under their mattress.
We are discussing the responsible management of money over time. Simply stashing it away and neglecting to cash a check is unwise. Doing nothing means you lose out to inflation each year. Consequently, the state might compel such individuals to at least deposit their money in a CD.
However, most of us do not fall into the lowest common denominator category. We engage with professionals and understand that there are various ways to yield returns through different investments. The individuals you designate as your power of attorney likely possess this knowledge (and more). This is just a basic example.
So, if you want to consider the lowest common denominator scenario, you could opt to do nothing, and the state will intervene to resolve matters for you.
Ironically, the very individuals you would likely appoint as your power of attorney might end up navigating the legal system to care for you if you lack the appropriate documentation. This diverts their time away from you and adds stress to an already demanding situation.
Stay tuned for part three, which is likely the most common aspect people think about when it comes to estate planning: the distribution of assets after one’s passing.
We serve clients in Mineral Point WI, Dodgeville WI, Platteville WI, Lancaster WI, Fennimore WI, Boscobel WI, Richland Center WI, Muscoda WI, Spring Green WI, Mazomanie WI, Sauk City WI, Middleton WI, Madison WI, Fitchburg WI, Verona WI, Mount Horeb WI, Barneveld WI, New Glarus WI, Monroe WI, Belleville WI, Oregon WI, Stoughton WI, Darlington WI, Cuba City WI, Hazel Green WI, Belmont WI, Dubuque IA, Freeport IL
Want to share this blog post? Click the links below!