Providing for Incapacity
Many people are under the impression that their spouse or adult children can automatically take over their estate in the case that they become incapacitated. In truth, if you or your spouse are unable to manage your own financial affairs, your family must petition a court to declare you legally incompetent. This process can be lengthy, costly, and stressful. Even if the court appoints the person you desire, they may be required to come back to court every year to declare and account for every penny of spending and investing.
In order for your family to immediately have authority over your estate, a person or persons that you trust must be designated in proper legal documents in order to withdraw money from your accounts, pay bills, take distributions from your IRAs, sell stocks, or refinance your home. A last will does not take effect until you die and a power of attorney may be not be sufficient for the court.
In addition to planning for the financial aspect of your affairs during incapacity you should establish a plan for your medical care. The law allows you to appoint someone you trust, such as a family member or close friend, to make decisions on your behalf regarding medical treatment options if you lose the ability to decide autonomously. You can do this by using a durable power of attorney for health care in which you may designate a person to make such decisions. Moreover, in the event that extraordinary measures or procedures are required should you become permanently unconscious or terminally ill, it is important to have a documented living will to inform others of your preferred or restricted medical treatments.