Estate planning is often associated with death. But it’s just as important for your plan to address incapacity associated with illness, injury, advanced age or other circumstances.
Unless you specify how financial and health care decisions will be made in the event you become incapacitated, there’s no guarantee that your wishes will be carried out. Plus, without a plan, your loved ones may be saddled with the difficult task of seeking a court-appointed guardian.
Tools for addressing personal incapacitation in your estate plan include:
- A revocable living trust. You transfer your assets to the trust, retaining control over your financial affairs by serving as trustee. In the event you become incapacitated, your chosen representative takes over as trustee.
- A durable power of attorney. This document authorizes your representative to manage your financial affairs and control your assets, subject to limitations you establish.
- A health care power of attorney. Also referred to as a “durable medical power of attorney” or “health care proxy,” this document appoints a representative to make medical decisions for you in the event you can’t make them yourself.
- A living will. Permitted in most states, a living will communicates your preferences for life-sustaining medical intervention — such as artificial nutrition or hydration — under specified, life-threatening circumstances.
Concerned that your estate plan doesn’t cover all scenarios regarding incapacity? Contact me at SDitman@berdonllp.com or your Berdon advisor, or your trust and estate attorney.
Scott T. Ditman, a tax partner and Chair, Personal Wealth Services at Berdon LLP, New York Accountants, advises high net worth individuals and family/owner-managed business clients on building, preserving, and transferring wealth, estate and income tax issues, and succession and financial planning.