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  • James Brownlowe

Planning For Incapacity


Many of us my take a cavalier attitude to estate planning because we think it will only affect our affairs after death. Some of us may think, “I really don’t care about what happens to my assets after death. After all, I’m gone.” But, ask that same person whether they care about how they are cared for and how their assets are treated during a period of incapacity; and you may get an entirely different answer. The truth is, a comprehensive estate plan not only includes planning for asset distribution after death, it also includes planning that will protect your assets and your well-being during period periods of incapacity.


The majority of us will experience some period of incapacity during our lifetimes --- ranging from temporary or permanent periods. Without proper advance planning, our health care choices and the management of finances may be left to the discretion of a court appointed conservator. However, we can avoid this by including certain documents in our estate plan.


Planning for Incapacity through a Living Trust


Most of us are familiar with the advantages that a trust provides in avoiding probate and allowing us to control the distribution of our assets after death. But, did you know that a trust also provides for the ability to designate who controls your affairs upon incapacity? With a trust, one designates a successor trustee that is empowered either upon death or during times of incapacity to take certain actions. Unlike a will, where the executor only has power to act after death, the successor trustee can manage your assets during incapacity. This can be critical if funds are needed to provide for your health care and actions need to be taken (such as liquidating stocks) to provide such funds. The successor trustee, through their trustee powers, can provide for your healthcare and maintenance by using your assets in the trust and will do so based upon how you directed those assets to be used. This can provide for great piece of mind to know that a trusted individual will be the one making vital financial decisions as opposed to a court appointed conservator.

Planning for Incapacity through a Durable Power of Attorney

A power of attorney allows a person you designate as your agent to act as your “attorney in fact”. This is another document that may be required by a financial institution to allow a person to make financial transactions on your behalf. The power of attorney may be written to take effect immediately or only upon incapacity. It can also be written to have broad powers (general power of attorney) or limited power s (special power of attorney). Your particular circumstances will dictate how your power of attorney will be drafted to serve you needs. It is also important to not allow your power of attorney become stale and it is wise to re-execute it about every three years.


Planning for Incapacity through a HIPAA Waiver


HIPAA stands for Health Insurance Portability and Accountability Act. Among other things, HIPAA was enacted to protect the private health care information of individuals and to impose strict disclosure rules that apply to “covered entities” such as health care providers and insurance companies. What is important to know about HIPAA and incapacity, is that care givers may not be required to give health care information to family members that may be needed to make vital decisions unless a HIPAA waiver has been signed by the individual. Obviously, this needs to be done prior to any period of incapacity. Having a HIPAA waiver in place as part of your estate plan could be vital if your loved ones need to know your condition or access your health records in order to make decisions about your health care.



Remember, incapacity is not just unconsciousness. It includes conditions that may affect the ability maintain attention and alertness, process information, or other conditions that make it impossible to manage your own affairs. Don’t be the person that thinks estate planning is only about planning for “after death” distributions. It is equally important for “during life” decisions that affect your care by empowering a trusted individual to manage your affairs if the need arises.


If you would like to learn more about planning for incapacity through estate planning, contact me at jim@brownlowelaw.com or call me at 661-388-1592.

This article provides legal information, but does not constitute legal advice for any particular situation.






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