Planning for Disability: Control Your Destiny
I mentioned estate planning and most people think of Wills and Trusts. But a good estate plan includes things that will help you if you become disabled (Alzheimer’s disease, dementia, coma, vegetative state, serious illness, etc.). Three documents should be considered: an advance directive for health care, a power of attorney for finances, and a trust. The first two are vital. The third is usually advisable, but may not be necessary in all cases.
An Advance Health Care Directive is sometimes called a Living Will or Power of Attorney for Health Care. It is a document that tells your doctors and loved ones if you want to be placed on life support and who will have the authority to access your medical records and consent to treatment. (It’s also a good idea to name at least one backup.) Be sure to discuss your wishes with the person you designate as your decision maker. Not everyone is comfortable with that responsibility. You should also discuss these things with your loved ones. It’s always easier to listen when things are quiet, rather than suddenly finding out your wishes in a crisis situation.
A power of attorney for finances designates someone to handle your money, property, and bills when you are disabled. The designated person is called attorney, “which has nothing to do with being a lawyer (a lawyer is a lawyer at law). The designated person should be someone who is good with money and responsible enough to take care of your property.
Sometimes an Advance Health Care Directive and Power of Attorney are enough, especially if you have few assets and nothing too complicated. But for many people, having a Trust is also a very good idea. Think of a trust as a special box in which you put your assets (bank accounts, stocks, your home, rental properties, etc.). The person you designate to take care of the box is called Trustee. This person is NOT the Executor. An executor is appointed in a will, approved by a court, and only has authority after your death. A trustee generally does not need court approval and can handle things during your life as well as after your death. A trust can provide greater protection and easier administration than relying solely on a power of attorney.
The number one mistake people make in estate planning is procrastinating until it’s too late. Without a directive, their care is left to fate. We all hate thinking about our own mortality, so most of us do nothing. As the saying goes, “Not planning is planning to fail.” Don’t be the next major court case because you didn’t fulfill your end-of-life wishes. Do not leave your family without being able to eat your affairs without a court order. With proper planning, you are in control. Make arrangements. It’s unpleasant to think about it, but trust me, you’ll feel so much better once you’re done.