Part of estate planning is also planning for a disability, whether temporary or permanent. If your name is on the title of your assets and you can’t conduct business due to mental or physical incapacity, only a court appointee can sign for you. The court, not your family, will control how your assets are used to care for you through a guardianship. It can become expensive and time consuming, it is open to the public, and it can be difficult to end even if you recover.
There are a number of documents needed to make sure that your chosen advocate is able to carry out your wishes when you are no longer able to speak for yourself. A Living Trust can accomplish a number of these goals by allowing your Trustee control over your property and accounts because your house and bank accounts will be titled in the name of your Living Trust. A Living Trust will not cover certain assets, such as IRAs, 401k’s, certain types of insurance and some personal property, so a Durable Property or Financial Power of Attorney will be necessary.
In order to care for your health care and personal needs, a Durable Health Care Power of Attorney is essential. This allows your agent to step into your shoes during an incapacity and make necessary, often life-saving decisions. For end-of-life decisions, which should always be in writing if you have preferences, a Living Will or Advance Directive should be included in your plan. Finally, due to the Health Information Portability and Accountability Act, (HIPAA), your health information is protected. If you want your family, attorney, and other members of your planning team to have access to protected health information, then you need to also put that in writing.
Given the choice—and you do have the choice—wouldn’t you prefer these matters be handled privately by your family, not by the courts?