Disability Planning: Control Your Destiny

Mention estate planning and most people think of wills and trusts. But a good estate plan includes things to help you if you become disabled (Alzheimer’s disease, dementia, coma, vegetative state, critical illness, etc.). Three documents should be considered: an advance health care directive, 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 your designated decision maker. Not everyone is comfortable with such responsibility. You should also discuss these things with your loved ones. It’s always easier to listen when things are quiet, rather than suddenly learning your wishes in a crisis situation.

A financial power of attorney names someone to handle your money, property, and bills when you are incapacitated. The designated person is called attorneythat has nothing to do with being a lawyer (a lawyer is a lawyer at law). The person nominated must be good with money and responsible enough to take care of his property.

Sometimes an Advance Health Care Directive and Power of Attorney are enough, especially if you have few assets and nothing very 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 house, rental properties, etc.). The person you designate to look after the box is called the Trustee. This person is NOT the Executor. An executor is designated in a will, approved by a court, and has authority only after the executor’s death. A trustee generally does not need a brief approval and can handle things during his lifetime as well as after his 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 putting things off 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, “failing to plan is planning to fail”. Don’t become the next court case to make headlines because your end-of-life wishes were not followed through. Don’t 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, but trust me, you’ll feel a lot better once you’re done.