Imagine that you own and operate a small business, and it’s your family’s sole source of income. How do you ensure your business continues to operate while you are on vacation? Likely you have a plan set up before you leave as to who is in charge, what needs to be accomplished, and what needs to be saved for you to tackle once vacation is over. Now imagine that instead of vacation, you are involved in a serious car accident. Unlike vacations, personal tragedies don’t get planned on your calendar. Who will be in charge of running the business if you’re unable to appoint someone after the fact?
When people think about estate planning, they typically think of “What’s going to happen to all my stuff when I die?”
But a good estate plan should also protect you during life—not only your property, and not just after death. Protecting your estate during life requires planning for your incapacity.
Your imaginary (or very real) small business aside, what about your personal life? Who will pay your bills while you are incapacitated? Who can manage your investments? What if you are unconscious or otherwise unable to make sound medical decisions for yourself? If your spouse was also in the accident or is otherwise not involved, who will take care of your children while you are incapable of making such important decisions?
These are hard questions to answer, but a good estate plan allows YOU to answer those questions rather than requiring your loved ones to make the tough calls for you. You can remove this burden from them by planning for these types of catastrophic events through a Durable Power of Attorney, a Health Care Power of Attorney, and a Living Will. These documents allow you to retain the decision-making power up to the point that your primary care physician deems you are incapacitated, so your named agents cannot make decisions for you until absolutely necessary. In choosing your agents, it is important to choose individuals who will follow your directions given to them prior to the time you are incapable of enforcing those directions.
A durable power of attorney allows you to name individuals who can make financial decisions for you should you become incapacitated. This covers personal as well as business decisions. Perhaps one of your employees is your “go-to guy” and knows or cares about the business as well as you do. This person could serve as your agent to run the business while you are unable to. For personal finances, most people name their spouse as their agent. This document also enables you to choose guardians to take care of your children should you and your spouse become incapacitated. (For more information on choosing a guardian for your children, read this article.)
A health care power of attorney allows you to appoint health care agents to make important medical decisions on your behalf when you are incapable of directing health care providers as to your wishes. Again, it is important to choose agents who are aware of your personal health care wishes and who will follow your directions when tough calls must be made.
A living will (sometimes referred to as an “Advance Care Directive”) enables you to make certain health care decisions beforehand, most notably whether to allow one’s life to be artificially prolonged by extraordinary measures when there is no reasonable expectation of recovery from extreme physical or mental disability. Individual states’ laws govern the content and enforceability of these types of documents.
These three documents should be part of your comprehensive estate plan. Having them removes from your loved ones the burden of making hard decisions concerning your well-being. To learn more about preserving your wishes upon your incapacity or death, or to begin implementing a comprehensive estate plan, contact your Sioux City Law Firm, Omaha Law Firm, or Sioux Falls Law Firm today! For more estate planning blog posts like this one, check out our page! http://blog.goosmannlaw.com/estate-planning-laywer-on-your-side
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