Many people know that creating an estate plan is a way of providing for your loved ones after your passing. However, if you have not prepared for incapacitation, your estate plan may not give you and your loved ones all the support needed. An accident could leave you critically injured or an illness could make you unable to make decisions for yourself. Your estate plan should prepare for these challenges.
Who will make financial decisions if you cannot make them yourself?
If you are unable to make decisions for yourself, you will need someone you trust to manage your finances. A financial power of attorney is a document that gives someone you trust the authority to make these decisions on your behalf. Depending on the terms outlined in your power of attorney, your representative can act in a wide variety of legal and financial situations. These include:
- Access your bank accounts and other savings
- File taxes on your behalf
- Managing your finances, including making investment decisions
- Collecting debts owed to you
- Applying for benefits on your behalf
- Paying bills for your housing, healthcare and other needs
- Buying and selling property in your name
These documents give your representative a great deal of power over your possessions, and this power could be abused. It is essential that you choose someone that you trust to act on your behalf, and you may want to consider naming two agents to work together Your estate planning attorney can walk you through the decision-making process.
Who will make decisions about your health and care?
If you become incapacitated, you may need a great deal of healthcare. Just as a power of attorney can grant your representative the authority to make financial decisions on your behalf, a power of attorney can also allow the person of your choice to make healthcare decisions for you. This allows your agent to carry out your desires regarding healthcare facilities, medical procedures and treatments and who you would choose as your caregivers. Without a power of attorney, someone else may decide for you and it may not always be what you would have wanted.
Powers of attorney are only one way to prepare for incapacitation, and they can be supplemented by other documents. A living will can detail your wishes for pain management and other medical care. A do not resuscitate (DNR) order establishes your wishes about resuscitation and other life-sustaining procedures. You may also want to establish a HIPAA release or authorization to allow your representative to receive healthcare information that would usually be restricted by privacy laws.
Because there are a variety of options available to you, it can be important to speak to an estate planning attorney about your options. With careful planning, you can prepare for difficult situations and ensure that your wishes for your care are respected.