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Estate Planning: 3 Things You Need to Know About Incapacity Planning

Estate Planning: 3 Things You Need to Know About Incapacity Planning

Incapacity planning is one of the most important reasons to have proper estate planning. Mental or physical incapacity is the result of an accident, injury, or illness. It is an event that leaves you unable to care for your own health or make informed decisions about your finances.

Incapacity Planning Covers You If You Become Physically or Mentally Unable to Care for Yourself or Your Estate

Incapacity planning is not the first thing that people focus on when they are drafting end of life documents. Yet, it is one of the most important reasons to have proper estate planning. Mental or physical incapacity is the result of an accident, injury, or illness. It is an event that leaves you unable to care for your own health or make informed decisions about your finances.

If this happens and no incapacity plan is in place, a Nevada judge will have to appoint someone to make decisions about your health and finances under a court-supervised guardianship or conservatorship. Most likely, you have no say in who the appointed person will be.

However, if you do have an incapacity plan in place, you retain control over your finances and health decisions in the result of incapacitation. These plans are clearly laid to ensure payments on utilities and mortgages while detailing out your personal healthcare wishes. It is important to complete these documents before you become mentally incapacitated. If it can be proven you were mentally incapacitated at the time of signing, then any document you sign is void.

3 Things You Need for Proper Incapacity Planning

1. Documents Required to Manage Your Finances During Incapacity

There are two documents that must be in place to manage your finances. They also need to be completed before mental incapacitation.

  1. Financial Power of Attorney: This document gives the appointed person the authority to pay your bills, make financial decisions, manage investments, file tax returns, mortgage and sell real estate, and address other financial matters. There are two kinds of financial power of attorney. The first is a general financial power of attorney. It goes into effect as soon as it is signed. The other is a springing financial power of attorney. This goes into effect once the person who made the document is declared physically or mentally incapacitated.
  2. Revocable Living Trust: This document needs to be in place in the event the trustmaker, trustee, or beneficiary becomes incapacitated. The document names someone else to step in as the successor trustee and manage the trust assets for the benefit of the incapacitated trustmaker and beneficiary.

2. Documents Required to Make Healthcare Decisions Once You Are Incapacitated

Two documents are necessary to make healthcare decisions. Just like the documents for finances, they need to be completed before you become mentally incapacitated.

  1. Durable Power of Attorney for Healthcare Decisions: This document gives the appointed person the authority to make healthcare decision for you if you become incapacitated.
  2. Living Will: This document gives the appointed person the authority to make live-saving or life-ending medical decisions if you become incapacitated.

3. Keep Your Incapacity Planning Up to Date

Your life doesn’t stay the same forever. Your wants, family interactions, finances, and assets can all change over your lifetime. It’s important to remember to update your estate planning to reflect these changes. An experienced estate planning attorney will recommend that you should review your incapacity planning and estate planning at least once a year.

LeAnn Schumann is an Experienced Incapacity Planning Attorney at Jesse Kalter Law

Comprehensive incapacity and estate planning is not something that can be done over the internet. An accurate set of documents reflecting your financial and healthcare desires require the expertise of an estate planning lawyer. LeAnn Schumann is a knowledgeable and experienced estate planning lawyer that has helped thousands of clients. She knows the right questions to ask to ensure comprehensive client estate planning. LeAnn is available to serve Reno, Sparks, Carson City, Fallon, Fernley, Dayton, Yerington, Douglas County, and all other Northern NV rural counties.

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