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Planning for Incapacity

Incapacity is the physical or mental inability to do something or manage one’s affairs. Although we often think of incapacity only for older adults, anyone can become incapacitated. For example, an individual who is in a car accident and ends up in the hospital on a ventilator or in a coma. In these situations someone needs to act on your behalf whether it is to make medical decisions or to ensure the rest of your life is running smoothly. In this blog post we will discuss the different types of incapacity planning that everyone over the age of 18 should have. 

Financial Powers of Attorney

Who would make sure your bills were paid if you couldn’t? A Financial Power of Attorney names the individual(s) you want to manage your finances and legal affairs. The individuals named as your agent have the authority to handle the things outlined in the power of attorney. Oftentimes these powers are general as we don’t have a crystal ball to allow us to know exactly what your agent will need to do on your behalf. A general power of attorney can include powers to manage bank accounts, investments, retirement accounts, real estate, and legal matters. You may also have a limited power of attorney which allows your agent to only act on your behalf for a specific purpose.

When planning for incapacity you want to ensure that your power of attorney is durable. A durable power of attorney will continue in effect even if you are incapacitated and unable to make your own decisions. A non-durable power of attorney is typically used with a limited power of attorney and it’s authority ends once that act is completed, you revoke the power of attorney or you become legally incapacitated. 

Some powers of attorney are springing and require one or two physicians or an incapacity panel to determine that you are incapacitated. Your agent is unable to act your your behalf until these individuals complete a certification that you are incapacitated. The risk of a springing power of attorney is that it could take some time to complete the certification and in that time period you may need someone to act on your behalf.

Advanced Healthcare Directives

Who will make medical decisions on your behalf if you are unable to speak for yourself? An Advanced Healthcare Directive identifies the individual(s) that you would like to make medical decisions on your behalf. In an emergency situation a hospital may defer to your spouse, parents or siblings to make decisions for you. However, if those individuals don’t agree on your course of treatment they would need to ask a court to identify who has the final say. Additionally, you may be okay with your spouse or parents acting as your healthcare agent but would never want a sibling to make healthcare decisions for you but if that is not documented the court could appoint that sibling.

The other important aspect of Advanced Healthcare Directives is that they outline how you would want to make important healthcare decisions. Oftentimes they will identify the care that you would want in an end-of-life situation and provide guidance for your healthcare agent so that they can make decisions that align with your wishes. In the absence of an Advanced Healthcare Directive and an individual who can make healthcare decisions on your behalf a hospital will take any and all actions that could prolong your life no matter how small the chance of success.

Kids Emergency Support Plans

If you are unable to care for your children, who will take care of them? This is one of the hardest questions parents have to think about. Without proper incapacity planning your kids could end up in the care of child protective services. Children will be placed with their other parent or relatives by default. However if you don’t have any family living nearby then the police will have to seek the help of child protective services to find a temporary placement. If you do have family nearby but haven’t identified who you would like to care for your kids, the first family member that can be reached will take temporary custody of your children and if there is conflict between family members the court may need to get involved.

Willow Legal Group ensures all our clients with minor children have Kids Emergency Support Plans. A Kids Emergency Support Plan identifies short term guardians that live locally so that you determine who cares for your children when you can’t. In addition, a Kids Emergency Support Plan provides you with ID cards and information for your refrigerator so that incase of an emergency your caregivers or emergency personnel will know who to contact to care for your kids.

Without Any Documents

Without either Financial Powers of Attorney or Advanced Healthcare Directives someone would need to go to court to seek approval to act on your behalf. In Maryland, these individuals are appointed through a Guardianship proceeding in which a judge would appoint someone to be in charge of your finances (Guardian of the Estate) and someone to be in charge of your personal decisions (Guardian of the Person). This can be a lengthy court process in which all interested persons are notified and then the court selects a guardian based on who seems to be the best option. The person the court selects may not be the same person you would have chosen.  The court takes this responsibility very seriously as these appointments remove an individual’s rights and so the court will not appoint a guardian if there is a less restrictive means, such as a Financial Power of Attorney or Advanced Healthcare Directive in place. 

For more information on who to appoint as an agent see this blog post on How to Choose the Right Fiduciaries. Everyone over the age of 18 should have incapacity documents in place, reach out to us if you need to complete these important documents or if it’s been more than a couple of years since you’ve reviewed and updated your documents. Schedule a complementary 15 minute consultation here