If you should become incapacitated at some point in your life, you can bet it will be both very scary and stressful for you and your family.
Becoming incapacitated and unable to take care of your affairs, does not mean that you do not have a plan or say in your care and finances though.
There are steps you can take today to ensure that you and your family are both taken care of should you or your spouse ever end up in this situation.
Advance Health Care Directive
An advance health care directive is also known as a living will. This document allows you to choose someone you trust to make your health care decisions. This person might be a family member or a trusted friend. Having someone designated to make sure your health care decisions are in line with your outlook and desires will take the pressure off of you and your family.
Working through the establishment of a living will/advance health care directive means stating clearly which health care and end of life choices you want. This document also allows you to say what you want or do not want. For example, you can put in your advance health care directive that you do not want a feeding tube or you can put that you do want a respirator if those are your choices. These directives eliminate ambiguity for your family when trying to make health care decisions on your behalf.
Setting up a living will/advance healthcare directive today is a great first step in getting your estate in order.
Durable Power of Attorney for Finance
A durable power of attorney is similar to the advance health care directive in that you choose a family member or a trusted friend to make decisions for you. The difference is that this is for your finances. Because of this, you want to make sure you choose a person you completely trust to make sound financial decisions for you and possibly your family depending on the situation. The person you choose can be the same person as your advance health care directive but does not have to.
When we say a Guardianship Plan, we are talking about a plan set up to help you to choose someone to take care of your minor children if you are unable to. In many cases, your spouse will be there to the carry-on with guardianship of your minor children, but in the rare case both of you become incapacitated or only one of you are still living, it will give you the reassurance your children will be taken care of.
Along with choosing who will be your children’s guardian, you can also add a letter voicing your wishes for how your children are raised. You can say what type of education you want for them, what religion you want them to follow, etc.
You can read more about guardianship plans and family estate plans, here.
Having a trust set up for your children will ensure that your wealth is protected from undue taxes or probate while also setting up the transfer of your wealth and estate to those you designate. You will be able to name a trustee who will help your children access your gift for things like schooling, housing, basic needs, or other things you want to designate.
To help reduce stress, the trustee and the guardian should be two separate people. However, they must be able to work together and make decisions in the best interest of your children. Without a trust, your financial and property assets could become the rope in a tug of war between kids, relatives, and others. If you were to become incapacitated, a trust would truly help to keep things straight for everyone!