You should take a comprehensive approach when you are planning your estate. The facilitation of postmortem asset transfers is one element of the process, but you should also consider end-of-life eventualities.
Cognitive Impairment and Physical Incapacity
No one is anxious to think about some of the unpleasant eventualities that people face when they reach an advanced age, but sticking your head in the sand is not going to change anything. You should understand the facts and react to them to the best of your ability.
We have all heard of Alzheimer’s disease, but many people are surprised when they learn about its widespread nature. According to the Alzheimer’s Association, over 6 million people are living with the disease at the present time, and it strikes more than 30 percent of the oldest old.
Over half of senior citizens pass away with some type of dementia, so this is something that everyone should take seriously. Clearly, you will not be able to handle your own affairs if you experience a significant level of cognitive impairment.
There is another type of incapacity that can strike late in life. If you are struggling with a devastating illness, you may not have the energy and mental clarity to communicate medical decisions and manage your own finances.
Advance Directives for Health Care
As a response to the above, you should include an incapacity planning component when you are devising your estate plan. For medical decision-making, the documents that should be used are called advance directives for health care.
One of them is a living will. With this type of will, you state your life support preferences. You can decide on each respective life-support method if you choose to do so, and you can include your organ and tissue donation designations and comfort care medication choices.
Medical scenarios can arise that are not related to life-support. To account for this possibility, you can name a representative to act on your behalf in a health care proxy or durable power of attorney for health care.
The Health Insurance Portability and Accountability Act (HIPAA) was enacted in 1996 because medical records were being shared too freely.
It ensures patient privacy, and a provision contained within it prevents doctors from communicating medical information with anyone other than the patient. Your plan should include a HIPAA release to give your representative the freedom to access the records.
Living Trust Disability Trustee
When you explore your asset transfer options with an attorney, you will learn about the benefits of the revocable living trust. This device is superior to a simple will in many ways, and we will explain all of the advantages in an upcoming post.
From an incapacity planning perspective, a living trust provides a very valuable safeguard. If you establish this type of trust, you would act as the trustee while you are alive and well, so you would have total control of the assets.
You would name a successor in the document to assume the role after your passing. When you are drawing up the trust, you can give this person or another individual of your choosing the ability to administer the trust in the event of your incapacity.
To account for assets that you never conveyed into the trust, you can name an agent in a durable power of attorney for property.
Attend a Free Webinar!
We go the extra mile to provide learning opportunities to our neighbors through our estate planning webinars. These sessions cover the most important areas, and you will come away with a far better understanding of the process if you join us.
There is no charge, and you never have to leave your couch, so this is a time investment that will yield dividends. You can see the dates if you visit our webinar page, and when you identify the session that works for you, follow the instructions to register.
Need Help Now?
If you found your way to this site because you are thinking about working with a Rochester estate planning attorney to put a plan in place, there is no time like the present.
We can gain an understanding of your situation and make the appropriate recommendations. At the end of the process, you will come away with a custom crafted plan that ideally suits your needs.
You can schedule a consultation appointment if you call us at (585) 546-1734, and you can use our contact form if you would rather send us a message.