When it comes to the estate planning process, it’s easy for some people to focus so much on the financial side of the equation that they forget about other important concerns – like incapacity planning. The truth is that your incapacity plan is so important for properly protecting your loved ones that it should be considered an essential component of any comprehensive estate plan. And durable powers of attorney are a vital part of any sound incapacity plan. It’s important to understand why this document is so critical for ensuring that your interests are protected during any period of incapacitation.
When Incapacity Strikes
Few people ever see incapacitation coming, and that may help to explain why so many people are unprepared to manage serious illness and injury when it occurs. Accidents, disease, and the aging process can leave you in a state where you can no longer make your own financial or medical decisions. Without proper planning, you will have no one available to handle financial transactions, manage your financial resources, or provide treatment and care instructions to medical professionals. That can create a whole host of challenges and frustrations for your loved ones.
Typically, your loved ones will have no recourse other than to petition the probate court for guardianship. That process can be stressful, and may not always yield the type of results that you would prefer were you able to make these decisions on your own. For while courts often choose close family members to serve as guardians in these circumstances, there is no requirement that they do so. In situations where there is controversy involved, courts will sometimes choose a neutral third-party to serve as guardian. And even if a family member is chosen to serve as your guardian, there is no guarantee that you would have approved of that selection either.
The Pitfalls of Guardianship
No one doubts the important role that the guardianship process plays in civil society. There are millions of incapacitated adults and minor children who benefit from that process every year, as guardians help to protect those individuals’ interests and prevent them from being neglected or exploited. However, guardianship has its disadvantages too:
- The guardianship process can be a source of strife for many families – especially in cases where there are disputes about the type of treatment that your various family members believe that you would prefer. This strife can create stress, inter-family conflict, and hard feelings that can last for many years.
- Guardianship can be expensive. There are court costs, attorneys’ fees, and other expenses that are all assessed against your estate. There have been many instances in which estates have been consumed by guardianship costs, particularly when the patient’s incapacitation lasts for several years.
- Guardianship involves a loss of certain rights and privileges, and reduces the amount of choice that you have over your own affairs. If you haven’t expressed these choices and taken steps to secure your rights and interests before incapacitation strikes, you’ll lose your ability to have any say in those matters.
How a Durable Power of Attorney Can Help
The good news is that you don’t have to experience that loss of wealth or put your family through the stress of dealing with the guardianship process. With a little prior planning, you can lay the groundwork to ensure that your financial and medical affairs are properly managed during any period of incapacity. And the key to achieving that goal is to effectively use the durable power of attorney as the foundation of a solid and reliable incapacity plan.
Durable Power of Attorney for Finances
Your power of attorney can ensure that your financial affairs are properly managed during any period of illness or injury. With it, you can select someone to serve as your attorney-in-fact, and empower that person to handle important financial concerns that include the payment of bills, management of property, and decision-making about investments. You can use the terms of the POA to provide that agent with instructions about how you want these affairs managed, to ensure that your financial concerns are handled just as they would be if you were healthy enough to manage them on your own.
Durable Power of Attorney to Deal with Medical Concerns
These days, the power of attorney for healthcare isn’t as popular as it once was, as many jurisdictions have switched to advance directives that combine that power of attorney with living wills and other medical incapacity tools. Whether it’s referred to as a power of attorney, advance directive, or proxy designation, however, the goal is the same: to provide you with the tools you need to ensure that someone can make medical decisions for you when you can no longer handle things on your own. It’s the best way to ensure that you maintain some level of control over your own health care decisions to protect yourself and your interests during incapacitation.
A medical power of attorney is like the financial POA, in that it allows you to designate someone to serve as your health care proxy. That person is given the power to implement your instructions in all matters related to your treatment needs, and can also be empowered to make decisions on your behalf when unforeseen situations or treatment needs arise. As with the financial power of attorney, this healthcare proxy would only step in if you were incapacitated, and would rely on instructions you provide in the document to inform his or her decision-making.
Together, these durable powers of attorney can ensure that your family never needs to seek a guardianship to protect your interests. Instead, you’ll have the incapacity plan you need to maintain continuity of decision-making even when your health doesn’t permit you to manage your affairs on your own. At Biddinger & Estelle, PC, our incapacity planning team can help to ensure that you have the plan you need to safeguard your interests against incapacitation and eliminate the need for costly guardianships. If you’d like to learn more about how these powers of attorney can work to complete and enhance your overall estate planning effort, contact us online or call us today at (989) 872-5601.