When you think of estate planning you likely think about executing a Last Will and Testament to ensure that your estate assets are distributed according to your wishes after you are gone. While planning for the distribution of your estate assets is certainly one important aspect of a comprehensive estate plan, it should not be the sole focus of an estate plan. On the contrary, a well-thought-out estate plan should include a variety of additional inter-related components, including an incapacity plan. After all, incapacity is not something that only occurs to the elderly. Incapacity can strike anyone at any time. The Long Island estate planning attorneys at Eghrari Wealth Training Firm explain why preparing for the possibility of incapacity should be part of your estate plan.
Incapacity Can Happen at Any Time
When you hear the word “incapacity” you may immediately envision an older individual suffering from Alzheimer’s, or a similar age-related condition. While age-related dementia diseases do cause incapacity, they are not the only cause nor the only type of incapacity. In fact, incapacity can be caused by a virtually endless number of scenarios. A tragic car accident could leave you incapacitated as could a debilitating illness. Anything that leaves you unable to make decisions for yourself could leave you legally incapacitated.
What Happens If You Do Not Have an Incapacity Plan in Place?
Often, the best way to illustrate the need for something is to point out what happens without it. Imagine that you are incapacitated tomorrow because of a tragic motor vehicle collision or a serious workplace accident. Can you answer the following questions?
- Who will make healthcare decisions for you if you cannot make them?
- Who will take over control of your assets and property?
- Who will handle paying your bills and monitor your finances?
- Who will make personal decisions for you such as where you will live?
Unless you have an incapacity plan in place, the answers to these questions remain uncertain. Even if you are married, there is no guarantee that your spouse will have the legal authority to take over all decision making for you nor have the legal authority necessary to take over your assets. All too often, what happens is that family members end up in a conflict over who will make decisions and take over control. That conflict sometimes ends up in a protracted and costly court battle that may create a permanent divide in the family. In the meantime, both you and your assets remain in limbo. The easy way to prevent all of this from occurring is to include an incapacity component in your comprehensive estate plan.
Common Incapacity Planning Tools
Every incapacity plan is unique because it is created to meet the needs of the person creating the plan; however, some common incapacity planning tools include:
- Power of attorney. A POA allows you to appoint an Agent who will have the legal authority to act on your behalf in general, or specific, situations.
- Advanced directive. This allows you to appoint an Agent to make healthcare decisions for you if you cannot make them yourself.
- Revocable living trust. A revocable trust works by allowing you to appoint yourself as the Trustee of the trust and your designated successor as the successor Trustee. Assets are then transferred into the trust, and you continue to manage them, as the Trustee, if you can do so. If you become incapacitated, the successor Trustee automatically takes over the management of those assets without the need for court approval.
Contact Long Island Estate Planning Attorneys
For more information, please join us for an upcoming FREE seminar. If you have additional questions or concerns regarding the need to include incapacity planning in your estate plan, contact the Long Island estate planning attorneys at Eghrari Wealth Training Firm by calling us at 631-265-0599 to schedule your appointment.
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