5 Incapacity Planning Tools to Include in Your Estate Plan

Published On - September 10, 2024

Stan Bennett Estate Planning

Incapacity planning should be an essential component of your comprehensive estate plan, yet it is often overlooked. While many people focus on planning for the distribution of assets after death, incapacity planning addresses what happens if you are alive but unable to make or communicate decisions due to illness or injury. Without a plan, loved ones may be forced to go to court to obtain the authority to manage your affairs, which can be time-consuming, costly, and emotionally taxing. To help ensure that you are protected, a Murfreesboro estate planning attorney at Bennett |Tennessee criminal defense attorney Michael | Hornsby explains five incapacity planning tools to include in your estate plan.

  • Revocable Living Trust. A Revocable Living Trust can be a powerful incapacity planning tool. One of the many benefits of establishing a Revocable Living Trust is that it can be used to manage and distribute assets after death and to provide for the management of your assets if you become incapacitated. When you create a Revocable Living Trust, you name yourself as the initial Trustee and designate a successor Trustee who will take over the management of the trust if you can no longer do so. Because the trust remains revocable during your lifetime, you retain control over your assets and can modify or revoke the trust at any time. If you become incapacitated, however, your successor Trustee can step in quickly and easily without the need for court intervention.
  • Durable Power of Attorney. A Durable Power of Attorney (POA) is a legal document that allows you (the “Principal”) to appoint someone (referred to as your “Agent”) to manage your financial and legal affairs if you become incapacitated. A traditional POA terminates upon the death or incapacity or the Principal. Making a POA durable means that the Agent’s authority survives the incapacity of the Principal. With a Durable Power of Attorney, your agent can pay bills, manage investments, handle real estate transactions, and take care of other financial matters on your behalf. Without this document, your loved ones would likely need to petition the court to be appointed as your guardian or conservator, which could delay critical financial decisions.
  • Living Will. A Living Will is one of two important advance directives. A living Will lets you make important healthcare decisions now in case you cannot make them later because you are suffering from a terminal illness or you are in a vegetative state and are unable to make or communicate decisions. For example, you can choose to not accept artificial nutrients or hydration, or you can specifically authorize the use of life-support measures.
  • Healthcare Power of Attorney. The other important advance directive, a Healthcare Power of Attorney, allows you appoint someone to make healthcare decisions for you if you are unable to do so. Executing a Healthcare Power of Attorney can prevent costly and divisive disputes among family members over who will make medical decisions for you if someone needs to in the future.
  • HIPAA Authorization. The Health Insurance Portability and Accountability Act (HIPAA) protects the privacy of your medical records and limits who can access your healthcare information. While this is an important safeguard, it can create challenges for your loved ones if they need to make healthcare decisions on your behalf. A HIPAA Authorization allows you to designate specific individuals who are authorized to receive information about your medical condition, diagnosis, and treatment options. Without this authorization, your healthcare providers may be prohibited from sharing information with your family members, even if they are making decisions on your behalf. Including a HIPAA Authorization in your estate plan ensures that your loved ones have access to the information they need to make informed decisions about your care.

Contact a Murfreesboro Estate Planning Attorney 

If you have additional questions about incorporating incapacity planning tools into your comprehensive Tennessee estate plan, consult with an experienced Murfreesboro estate planning attorney at Bennett | Michael | Hornsby as soon as possible. Contact the team today by calling 615-898-1560 to schedule your free appointment.

 

Stan Bennett
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