What is Incapacity and Why Do We Need to Plan For it?

On Behalf of | Oct 13, 2021 | Estate Planning

We all know we’re going to die someday, so when people think about making an estate plan, they often think about it in the context of final arrangements for what we leave behind.

However, having an estate plan is also crucial in another situation, and one we don’t expect: incapacity.

What is incapacity?

Mental or physical incapacity means that a person cannot care for themselves or manage their affairs. They are substantially unable to do things like provide their own shelter, remember to pay their bills, or feed themselves. They may not be able to make simple decisions or express their wishes.

An incapacitated person could be someone who has Alzheimer’s or dementia, but it can also be someone doctors must put in a coma after a severe car crash.

What must we plan for it?

Because incapacity means that a person cannot make decisions for themselves, someone else will need to do so in the event that this occurs.

Decision-makers will need to handle finances, make medical decisions, and manage personal matters for the individual. When there is no plan directing who these decision-makers should be, or what they should do, parties will be appointed to act as per Minnesota laws.

These choices and the chosen person’s actions may not align with your wishes. And in some cases, they could completely contradict them. If you want to avoid this possible scenario, you will want to plan for incapacity.

In other words, appoint your own decision-makers. Decide who you want to handle your money if you get sick or hurt; make clear your wishes regarding the types of medical care you want or do not want; direct others on what type of living arrangements you prefer.

Planning documents to have in place

You can take several approaches to incapacity planning, depending on your circumstances and wishes. In general, however, it can be wise to have the following documents:

  • A durable financial power of attorney
  • health care directive
  • A living trust
  • A guardianship appointment

These tools work together to ensure people you trust are in positions to act on your behalf if you are incapacitated. They also establish your wishes so that others can make informed decisions.

While there may never be a need for these types of protection, knowing that they are there can give you and your loved ones confidence and peace of mind during an otherwise tumultuous time.