Planning for disability can give you peace of mind.

Having a contingency plan for disability is an essential part of an estate plan. Having no plan, or having a faulty plan, can result in a costly guardianship.

Guardianship is a court proceeding which results in the appointment of someone to manage your affairs if you are no longer capable. The guardian oversees you and your property, and the court oversees the guardian. To ensure the guardian is doing his or her job properly, the guardian must get permission from the court for virtually all actions taken on your behalf. This can be time consuming and very expensive.

Planning for disability using powers of attorney

Using powers of attorney is a good way to plan for disability. A durable power of attorney allows you to name someone who can act for you if you become disabled or incapacitated. This person, called an “agent”, can make financial and legal decisions for you regarding all of your property, without the added expense of a guardianship. But a durable power of attorney might not work in every situation, and it should only be considered minimal planning. For example, your agent typically does not have the power to make housing decisions for you. Some businesses have also become reluctant to accept a power of attorney, especially if the transaction involves a large amount of money.

You can also use a power of attorney for health-related matters. If you become disabled and can’t communicate with your doctor, an agent acting under a medical power of attorney could make medical decisions for you. Your agent would have the power to make decisions regarding treatment options, medication, and the use of life support.

Planning for disability using revocable trusts

However, if you prefer the “belt and suspenders” approach—if you’re interested in advanced planning for disability—you should consider using a revocable trust. A revocable trust is a legal entity which takes ownership of your property. You still have control over the property by acting as the manager of the trust (the “trustee”). If you become unable to manage the assets yourself, you would typically name a trusted friend or family member to take your place as trustee.  By having all of your property owned by the trust and by having a person named as successor trustee to manage the property, the need for having a court-appointed guardian for your estate can be eliminated.

If you don’t have a plan for disability, you should take action to develop one. You owe it to yourself and your family. Contact an attorney who specializes in estate planning to discuss your options. Ask them if they offer a free consultation.



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