Retirement is often when people recognize they need to create or update an estate plan. Those preparing to enjoy their golden years may want to protect their assets and craft a legacy. They may also want to leave clear instructions about their medical wishes and what will happen to their belongings after they die.
The basic estate planning process addresses what happens after someone passes. However, many testators in Ohio also engage in incapacity planning. As people grow older, their risk of certain debilitating medical conditions, like Alzheimer’s disease, increases. An individual may end up in a situation in which they cannot provide for themselves or manage their own resources. Incapacity planning is a way to protect against some of the uncertainty that comes with advanced age.
What does incapacity planning involve?
There are several different components to incapacity planning. The first and most obvious is the creation of a plan for someone’s medical support when they are unable to speak on their own behalf. Someone who has become permanently incapacitated due to cognitive decline or unconsciousness may need an agent or attorney-in-fact to make choices about their medical care.
Durable powers of attorney help ensure that there is someone of the testator’s choosing with the legal authority to make those choices. Advance directives help provide very clear instructions about the type of treatment that someone would like to go undergo. Many people will also create financial powers of attorney that empower someone they trust to manage their personal resources. Someone with financial power of attorney can pay bills and ensure the proper management of invested resources.
When someone creates thorough and durable documents, they can protect themselves from the possibility of guardianship or conservatorship. Those who lack the testamentary capacity to speak on their own behalf would not have the authority to control who manages their assets or health care after an emergency.
Incapacity planning often also includes planning to preserve assets and to more quickly qualify for Medicaid benefits in case someone needs intensive medical support. There are limits to what Medicare will cover, and planning to qualify for Medicaid before one needs benefits can speed up the process and protect someone’s assets at the same time.
Although long-term incapacity is somewhat rare, it is still a concern for those preparing for their golden years. As a result, engaging in incapacity planning in addition to basic estate planning can be a smart decision for those thinking about their quality of life as they age and their legacy after they die.
