Anyone could become temporarily incapacitated due to a sudden motor vehicle accident, illness, or injury. Some people are able to recover and regain the ability to manage their finances and make and express their own decisions about medical care and other issues. Some people become incapacitated for many years.
You can learn more about incapacity planning – what is it, who needs it, and why – from a Texas estate planning attorney. You can contact us today to get started.
Benefits of an Incapacity Plan
Legally, a person cannot enter into contracts, manage their financial matters, or make significant decisions for themselves after they become incapacitated. The only way for you to have a voice in issues like these is to make an incapacity plan:
- Who will have access to and be able to manage your bank accounts, investments, and other assets.
- Who will be allowed to pay your bills and buy and sell assets on your behalf.
- Who will run your business if you cannot do so.
- Who will make medical decisions on your behalf if you are not able to do so.
If you do not care about who makes these decisions and who manages these items for you, you might not feel the need to create an incapacity plan.
What Can Happen if You Do Not Have an Incapacity Plan
When a person does not have an incapacity plan and suddenly through an unexpected event or gradually become incapacitated through aging or disease, the close relatives will have to go to court and get a judge to appoint someone as the person’s guardian for personal or day-to-day living decisions and as the conservator for financial matters. Sometimes one person serves in both roles.
Not all families are happy, functional, drama-free zones. Let’s say that your family does not approve of your lifestyle but you have made your own life choices. The law will not allow your partner or close friend to serve as your guardian or conservator unless you have the legal documents that give them that authority in the event that you become incapacitated. Some families use incapacity as an opportunity to force someone out of their relative’s life.
Also, having to go to court can rip apart even a happy, functional family. If more than one person insists upon serving as your guardian or conservator, there will be a court battle. The accusations the parties make against each other could cause permanent damage to their relationships. At the end of the day, the judge could appoint someone whom you would never want to serve as your guardian or conservator.
Components of an Incapacity Plan
You will want to have a financial power of attorney naming the person you choose and trust to handle your financial matters if you become incapacitated. You will want this document to be “springing” so that the person you select only gains authority after a court declares you as mentally incapacitated. Also, this power of attorney must be “durable” so that it will not get automatically voided when you become incapacitated.
A medical power of attorney and medical records release and authorization is your opportunity to name the party who will make your medical decisions if you become incapacitated and allows them to review your medical records. Without the medical records release and authorization, HIPAA regulations will not allow them to read about your medical condition, test results, or other information that they will need to make informed decisions for your benefit.
Creating a revocable living trust means that you have a document that you can change at any time, as long as you have legal capacity. This type of trust can allow you to transfer all of your assets into the trust and name yourself as the trustee. You then name a successor trustee or two who will step in and manage those assets for your benefit if you become incapacitated. This was a whirlwind overview of what are actually quite complex legal topics. You will want to talk to a Texas estate planning attorney to find out the best way to plan for incapacity. Get in touch with our office today for a free consultation.