Many people think incapacity planning is not for them, assuming only those who are approaching retirement age can benefit. The reality is, accidents can occur at any time and leave us mentally incapacitated. A car accident, for example, can leave victims in a coma while medical conditions such as Alzheimer’s disease can slowly take away a person’s mental capacity. By establishing a detailed incapacity plan, you will be able to select a representative to act on your behalf in the event that you are unable to manage your affairs.
Creating a Power of Attorney
A durable power of attorney is a legal document which designates a specific person to act on your behalf if you become incapacitated. This person, known as the “attorney-in-fact” or “agent”, will be responsible for making financial decisions, such as managing your debts and investments, as well as overseeing your medical treatments. While you are mentally competent, you have the power to dictate how you wish your agent to act if you are ever incapacitated.
A “durable” power of attorney refers to the fact that the legal document will not expire if you are mentally unable to manage your affairs. In contrast, a “nondurable” power of attorney is no longer valid should you (the principle) become mentally incapacitated. Despite its name, your attorney-in-fact does not have to be a legal professional, in fact agents rarely are. They must, however, be someone you can trust and will not abuse or neglect their responsibilities.
One person may not always be the best choice to handle both the medical and financial decisions. Separate documents are often drafted for the medical and financial powers of attorney and you are able to distribute responsibilities between different people as you see fit. In the event that you choose a single person to act on your behalf, it is a good idea to designate an alternative candidate. This way, if something should happen to the attorney-in-fact, you will still have a representative to carry out your wishes. By making these choices and preparing early, the agents you choose to act on your behalf will have time to understand and prepare for their responsibilities.
In the event of an accident, if no valid attorney-in-fact has been established, the state may designate a conservator to handle your affairs. This can leave a family member to administer your estate, leaving them with a responsibility that they will likely be unprepared for. It can also lead to a dispute in cases where there is no clear indication of what the incapacitated party would have wanted.
Conservatorships also have additional legal necessities such as court hearings. While these processes are in place in order to help safeguard the mismanagement of an estate, it can be a costly process and burden your loved ones with unnecessary legal fees. The best way to avoid a conservatorship is to have a well drafted incapacitation plan in place.
Secure a Compassionate Estate Planning Attorney
If you have questions regarding the estate planning process or want to create an incapacity plan, our Nassau County estate planning attorney at the Davidov Law Group can help. Our firm can provide legal guidance to help ensure that your incapacity plan meets all legal requirements and that your wishes will be carried out as you intend.
Call (516) 806-4414 to request a personal consultation and talk to a lawyer about planning for the future.