subject: The How, When, and Why of Disability Planning [print this page] The How, When, and Why of Disability Planning
The odds are far greater of you becoming disabled than dying. So, do you have an incapacity plan? This is a legal arrangement that dictates what will happen to your financial affairs and medical care if you become disabled.
How
There are four documents that are commonly used for disability planning. A Medical Power of Attorney allows you to name a health care agent to act on your behalf. Your agent will work with your doctors to make medical decisions for you. You may also wish to create a Living Will to legally declare your medical wishes in the event you are terminal or persistently unconscious for a lengthy period of time.
Through a Durable Financial Power of Attorney (POA) you will name an attorney-in-fact to handle your finances and business affairs when you are unable. This person will sign tax returns for you and handle other financial issues that require your action.
If you have a Revocable Living Trust, your Successor Trustee can handle financial transactions on assets titled in the name of the trust while you are incapacitated. If you want your Trustee to handle medical decisions as well, check with your attorney to ensure that your Trust agreement includes the proper language for this. Alternatively, name your Trustee as your agent in your health care documents.
When
Life is full of uncertainty. At any moment you could endure an accident that causes a permanent physical incapacity or you could become mentally disabled in the blink of an eye. Even young people can endure lifelong disabilities. Since you don't know if or when a disability could occur, you should plan for it as soon as possible.
Why
If you do not plan for your disability, you will have no say-so in your own medical care and finances. An incapacity plan allows you to make decisions ahead of time. You can pick who you think will handle your finances the best. You can choose the person you feel is best suited to make medical decisions for you. You can also state your wishes for life support and terminal care in your Living Will and verbally to your chosen health care agent.
If you become incapacitated without the necessary legal documents to state your preferences, a court- of-law will then dictate your care. The court will decide which who will make your medical and financial decisions. Your court-appointed agent may not understand your wishes and therefore may not be able to properly represent you. The best action is to take responsibility for setting up your incapacity plan while you are in great health.
