Incapacity planning expresses your wishes so they can be carried out by your chosen agent if you become mentally and/or physically incapacitated.
Planning for incapacity is incredibly important for California residents. None of us likes to think about becoming incapacitated, yet taking the time to plan ahead can be immensely beneficial to you and your loved ones. A well-executed estate plan should include directions for you to carry out your wishes regarding financial matters and healthcare issues. Planning for incapacity can help you and your loved ones avoid complications. It also helps you ensure that your loved ones make decisions according to your wishes, should you become incapacitated.
WHAT IS INCAPACITY PLANNING?
Mental incapacity can happen for a variety of different reasons. A sudden injury or a chronic illness can cause an otherwise healthy individual to become incapacitated. The goal of incapacity planning is to allow your loved ones to understand your wishes and goals and act on them should you become incapacitated.
Sacramento-area residents without incapacity plans will leave these financial and health-related decisions to someone else’s discretion. Worse yet, your loved ones could end up needing to seek a conservatorship over you – a long-consuming and expensive process.
CREATING A FINANCIAL POWER OF ATTORNEY IN CALIFORNIA
A financial power of attorney is one of the most important incapacity planning documents. You appoint an agent who will have the authority to do all the following for you should you become medically incapacitated:
- Pay your bills
- Manage your investments
- File tax returns
- Make financial decisions
- Mortgage and sell real estate on your behalf
- Address other financial matters as specified in the legal document
As the creator of your financial power of attorney, you have control over the terms of the document. In California, financial powers of attorney can be durable or springing. The provisions of a durable power of attorney go into effect as soon as you sign it and stays in effect even if you become incapacitated.
A springing power of attorney only goes into effect after a medical doctor determines that you are mentally incapacitated. In other words, if you appoint your spouse as your agent in a springing power of attorney, your spouse will only be able to act and make decisions for you after you are declared incapacitated.
DO I NEED A POWER OF ATTORNEY IF MY SPOUSE AND I OWN EVERYTHING JOINTLY?
Yes, even if you own joint bank accounts and jointly own property, signing a financial power of attorney is still necessary. Joint bank account holders can access the funds in the account to pay bills. However, joint ownership of real estate does not allow one spouse to sell or mortgage the property without the consent of the other spouse.
Thus, if your spouse needs to sell or mortgage your home while you are incapacitated, they could not do so without a financial power of attorney. Other issues may arise from joint ownership of property. The best way to protect your assets is to create a comprehensive estate plan that includes a financial power of attorney. Relying on joint ownership is not a preferred strategy.
ADVANCED HEALTHCARE DIRECTIVES IN CALIFORNIA
An Advance Healthcare Directive is a legal document that states your medical desires pertaining to end-of-life care. Many people have the goal of being as comfortable as possible but not utilizing medical heroics that could decrease their quality of life.
Advance Healthcare Directives also allows an individual to state their healthcare wishes when they become incapacitated. Advance Healthcare Directives are incredibly helpful when someone is suffering from a terminal illness is in a permanent coma, or has been diagnosed with an illness that will become progressively worse over time.
Your Advance Healthcare Directives can address the following issues:
- Who you would like to appoint as your agent to make decisions on your behalf
- Whether you would like to refuse or accept pain medication
- Whether you would like to stay on life support indefinitely or removed under certain circumstances
- Whether you would like to donate organs and how you wish them to be used
- Your healthcare desires in any situation in which you are unable to make decisions
UPDATING YOUR INCAPACITY PLANNING DOCUMENTS
If you have not reviewed your incapacity planning documents in a while, or you have experienced life changes, seeking the advice of a skilled estate planning lawyer could greatly benefit you. You may want to consider updating your documents if:
- Your Advance Healthcare Directive was executed before 1992; it has expired.
- Your Advance Healthcare Directive does not include a HIPAA (Health Insurance Portability and Accountability) waiver. This waiver is necessary to allow your designated agent to access your medical records when making healthcare decisions on your behalf.
- You move to a new state, as medical powers of attorney documents vary from state to state.
- Your wishes change, such as wanting to select a different agent or change your mind about end-of-life decisions.
- You get divorced and your agent was your ex-spouse.
- Your agent passes away or becomes incapacitated.
WE OFFER COMPREHENSIVE INCAPACITY PLANNING SERVICES
At the Law Office of Daniel Hunt, we know that an Advance Healthcare Directive is only one part of a thorough estate plan. When we advise new clients, we listen to their needs and goals. We ask questions to get a sense of their current needs. We take the time to put together a complete estate plan in which all parts work to serve the overall goals of our clients. Contact our estate planning law firm today to schedule your initial consultation with our Sacramento, Folsom, or Roseville offices. We offer in-person, virtual, and telephone appointments for your convenience.