The Importance of Incapacity Planning
When we think of estate planning, we tend to - understandably - think about the post-death planning of the assets that are contained in our estate. But a critical part of the estate planning process involves planning for your potential future incapacity: making decisions now, while you can, to guide how decisions regarding your money and your health are made at a future time, when you can’t.
The two primary documents that govern these incapacity decisions are the Durable Power of Attorney and Advance Directive.
The Durable Power of Attorney lays out who should make your financial decisions if you cannot, what powers that person has in managing your finances, and how and when that person should step into your shoes.
The Advance Directive lays out who should make your healthcare decisions if you cannot, some guidance as to your preferences for your medical treatment, and how and when that person should step into your shoes.
These documents are typically included in all basic estate planning packages. While I am both risk-averse and biased - and think that everyone would benefit from an estate plan as soon as possible - there are sometimes reasons why people are not ready to jump into full estate planning yet. In those instances, there are form Durable Powers of Attorney and Advance Directives that you can complete yourself so that you at least have some basic incapacity protection in place in case something unexpected happens.
With the caveat contained in the disclaimer below that this is not legal advice but provided for informational purposes only (seriously, make sure you read the disclaimer, below), I have provided links to documents that you can complete yourself and some guidance as to how you can fill them out:
Durable Power of Attorney Form
To fill out the document at the above link, follow these steps:
Write your name and address on the first blank line at the top of page 1.
Write the name and address of the person who you want to be your power of attorney on the second blank line.
If you want that person to have a broad ability to manage your financial life for you if you can’t, then initial next to item “N.” If you only want to give someone the power to fulfill certain roles, then read through each option and initial the powers you want to grant.
Note that this document will be effective as soon as you sign it, meaning that your named agent could access your accounts and act on your behalf even if you have capacity to do so yourself. If you want to only grant someone the power to manage your assets in the event you become incapacitated, it is wise to speak to an attorney to get a more custom document drafted for you. However, if you choose to use this document, you can write “My agent's authority becomes effective when my primary physician determines that I am unable to make my own financial decisions” under “Special Instructions” on the bottom of page 1.
If you want to name more than one person to act simultaneously as your Agent under the durable power of attorney, then I again recommend that you speak to an attorney since there are additional considerations you may want to think about before doing so. However, if you choose to use this document with co-Agents, you can write “SEPARATELY” in the blank line on the top of page 2 if you want each of them to be able to act individually on your behalf without the participation of the other. Or, you can write “JOINTLY” on that same link if you want them to have to act unanimously in managing your affairs.
Do not fill out anything else on page 2 until you are in front of a notary. Take this document to a licensed notary and fill out the date, signature, and location sections of page 2 and have the notary complete the bottom of page 2.
Advance Health Care Directive Form
To fill out the document at the above link, follow these steps:
In Section 1.1, fill out the name, address, and phone number(s) for the person who you want to make your health care decisions for you if you can’t. There is room to add back-up agents as well if the primary person you list is unable or unwilling to act in that role.
If you would like your Agent to be able to make your health care decisions for you only in the event you become incapacitated, then do not check the box on the bottom of page 1.
If you have a preference for whether you are buried or cremated, you can note that preference on the blank lines in Section 1.5.
Section 2.1 covers whether you want to be kept alive if you are in a permanent vegetative state or at the end of a terminal illness. If you do not want to be kept alive that way, check the box next to “a.” If you do want to be kept alive that way, check the box next to “b.”
Read the prompts for 2.2 and 2.3 and add additional information if you would like.
If you would like to be an organ donor, check the box next to Section 3.1. You can cross out any of the donation purposes - Transplant, Therapy, Research, and Education - for which you do not want your organs donated. If you would like to be more specific about donation, you can add clarification in the blank line at the bottom of Section 3.1. If you do not want to be an organ donor, do not check the box next to Section 3.1, and you may want to write “I refuse to make a donation of my organs, tissues, and parts” in the blank line at the bottom of Section 3.1.
You can include the information for your primary physician in Part 4 if you would like, but it is optional.
Do not fill out Part 5 until you are in front of two witnesses and a notary. (The notary can often act as the second witness, but you should confirm with them in advance that they are comfortable doing so.) I would recommend using witnesses who are not named as an Agent in the Advance Directive. One of the two witnesses must not be related to you or entitled to your assets upon your death. When you are in front of two appropriate witnesses, date, sign, and print your name and address in Section 5.2. The witnesses will date, sign, and print their names and addresses in Section 5.3. The witness who is not related to you or entitled to your assets at your death will also sign Section 5.4 (this could be both witnesses if they both meet those requirements).
If you are living in a skilled nursing facility, the patient ombudsman must fill out Section 6.1. If you are not living in a skilled nursing facility, you can leave this section blank. If you do not know if the facility in which you live is a skilled nursing facility or not, then you should ask someone associated with the facility. There is a legal definition for “skilled nursing facility.”
The notary will fill out page 7 of the document.
As always, if you do not think that these documents are the right fit for your situation or you want a more customized approach to your needs, feel free to reach out anytime.
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