|Facing the Possibility of Incapacity
Incapacity means that you are either mentally or physically
unable to take care of yourself or your day-to-day affairs. Incapacity can
result from serious physical injury, mental or physical illness,
advancing age, and alcohol or drug abuse.
Incapacity can strike anyone at anytime
Even with today's medical miracles, it's a real possibility
that you or your spouse could become incapable of handling your own medical or
financial affairs. A serious illness or accident can happen suddenly at any
age. Advancing age can bring senility, Alzheimer's disease, or other ailments
that affect your ability to make sound decisions about your health, or to pay
your bills, write checks, make deposits, sell assets, or otherwise conduct your
Planning ahead can ensure that your wishes are carried
Designating one or more individuals to act on your behalf
can help ensure that your wishes are carried out if you become incapacitated.
Otherwise, a relative or friend must ask the court to appoint a guardian for
you, a public procedure that can be emotionally draining, time consuming, and
expensive. An attorney can help you prepare legal documents that will give
individuals you trust the authority to manage your affairs.
Managing medical decisions with a living will, durable
power of attorney for health care, or Do Not Resuscitate order
If you do not authorize someone to make medical decisions
for you, medical care providers must prolong your life using artificial means,
if necessary. With today's modern technology, physicians can sustain you for
days and weeks (if not months or even years). If you wish to avoid this, you
must have an advance medical directive. You may find that one, two, or all
three types of advance medical directives are necessary to carry out all of
your wishes for medical treatment (make sure all documents are consistent).
A living will allows you to approve or decline certain types
of medical care, even if you will die as a result of the choice. However, in
most states, living wills take effect only under certain circumstances, such as
terminal injury or illness. Generally, one can be used only to decline medical
treatment that "serves only to postpone the moment of death." Even in states
that do not allow living wills, you might want to have one anyway to serve as
evidence of your wishes.
A durable power of attorney for health care (known as a
health-care proxy in some states) allows you to appoint a representative to
make medical decisions for you. You decide how much power your representative
A Do Not Resuscitate order (DNR) is a doctor's order that
tells all other medical personnel not to perform CPR if you go into cardiac
arrest. There are two types of DNRs. One is effective only while you are
hospitalized. The other is used while you are outside the hospital.
Managing your property with a living trust, durable
power of attorney, or joint ownership
putting in place at least one of the following options
to help protect your property in the event you become incapacitated.
You can transfer ownership of your property to a revocable
living trust. You name yourself as trustee and retain complete control over
your affairs as long as you retain capacity. If you become incapacitated, your
successor trustee (the person you named to run the trust if you can't)
automatically steps in and takes over the management of your property. A living
trust can survive your death, but it can be expensive to maintain and
A durable power of attorney (DPOA) allows you to authorize
someone else to act on your behalf. There are two types of DPOAs: an immediate
DPOA, which is effective immediately, and a springing DPOA, which is not
effective until you have become incapacitated. A DPOA should be fairly simple
and inexpensive to implement. It also ends at your death. A springing DPOA is
not permitted in some states, so you'll want to check with an attorney.
Another option is to hold your property in concert with
others. This arrangement may allow someone else to have immediate access to the
property and to use it to meet your needs. Joint ownership is simple and
inexpensive to implement. However, there are some disadvantages to the joint
ownership arrangement. Some examples include (1) your co-owner has immediate
access to your property, (2) you lack the ability to direct the co-owner to use
the property for your benefit, (3) naming someone who is not your spouse as
co-owner may trigger gift tax consequences, and (4) if you die before the other
joint owner(s), your property interests will pass to the other owner(s) without
regard to your own intentions, which may be different.