If you are one of the many people who associates the possibility of their own incapacity with old age-related conditions such as Alzheimer’s disease, it would be wise to reevaluate your definition of incapacity. Incapacity encompasses a wide range of diverse scenarios, most of which can happen to anyone at any time. If incapacity does strike, are you prepared? Who will assume control of your assets and who will make medical and/or personal decisions for you during the time you are incapacitated? Unless you include Incapacity Planning in your comprehensive estate plan, a judge will likely make those decisions for you.
At Levine, Furman & Rubin, LLC we have seen the financial and emotional impact incapacity can have on everyone involved which is why we urge our clients to incorporate Incapacity Planning tools and strategies into their estate plan.
Why Is Incapacity Planning Important?
Although Alzheimer’s disease and other age-related conditions certainly can cause incapacity, the possibility of becoming incapacity is not limited to the elderly. A catastrophic car accident, a debilitating illness, or a serious workplace injury could render you incapacitated tomorrow. In fact, just over one in four of today’s 20-year-olds will become disabled before they retire. Imagine for a moment that an accident left you incapacitated tomorrow. Can you answer the following questions?
- Who would have the legal authority to make health care related decisions for you?
- Does that person know what your wishes would be regarding medical care, specifically end of life treatment?
- Who would take over control of your assets?
- Who would make personal decisions for you, such as where you will live during your incapacity?
Unless you have an incapacity plan in place, the answers to these questions are likely unclear. Ultimately, a judge may have to decide the answer; however, your family members and loved ones may spend a considerable amount of time and money in a court battle first. Moreover, that battle may cause a rift that will never truly heal.
What Is Incapacity Planning and How Can It Help?
Incapacity planning uses legal strategies and tools to ensure that if incapacity does strike, you are prepared. Instead of leaving important questions up to a judge to answer, it allows you to answer them yourself right now.
If you wish to decide who will have the authority to make health care decisions for you if you are not able to make them yourself, for example, a New Jersey Proxy Declaration should be part of your plan. A Proxy Declaration is a type of Advanced directive that lets you designate a “proxy” or “agent” who will make decisions about your health care, including decisions about life sustaining treatments, if you can no longer make them yourself because of incapacity.
Another advanced directive, a New Jersey Instruction Declaration, is more commonly referred to as a “Living Will.” This document allows you to make specific decisions about your own health care treatment ahead of time. This is where you can specify whether or not you want to be kept alive using life sustaining treatments, for instance.
Another commonly used incapacity planning tool is a revocable living trust. A revocable living trust can help you determine who will have control of your assets in the event of your incapacity. It works by allowing you to appoint yourself as the Trustee of the trust and the individual you wish to hand over control to during your incapacity as the successor Trustee.
Once the trust is active you can transfer assets into and out of the trust. As long as you are capable, you will control those assets as the Trustee of the trust. If you become incapacitated, the successor Trustee will take over automatically and will have the legal authority to manage your assets without the need for court approval.
Failing to plan for the possibility of incapacity can leave you, and your assets, vulnerable. At Levine, Furman & Rubin, LLC our East Brunswick Incapacity Planning attorneys are committed to helping you create a plan that ensures your wishes will be followed if incapacity does strike at some point during the course of your lifetime. Contact the team today by calling (732) 238-6000 or by filling out our online contact form.