Making plans for the future can be joyful — accomplishing goals, exploring new places, spending time with family — but it’s also important to make plans for the not-so-fun possibilities in your future, such as incapacity.
What Is Incapacity?
Incapacity is a state of being in which someone is physically or mentally unable to care for themselves or their affairs. This can happen to anyone at anytime as a result of an injury, illness or age.
Why Is Planning for Incapacity Important?
As you and your loved ones make plans for the future, it’s important to consider what life may look like if you or someone close to you is no longer able to make decisions about their own health or financial affairs. There needs to be someone able to step up and ensure bills are paid and needs are cared for.
How Should I Plan for the Possibility of Incapacity?
Start by evaluating what you want. Decide what your healthcare and financial wishes are, then determine who you’d like to carry out your wishes. You’ll want to choose someone who is responsible and trustworthy — whoever you name will be legally responsible to act in your best interest. If you’re worried about one person having all that responsibility, you can name different people to act in different ways. There are also professionals available for hire. Failing to name someone can lead to court proceedings about who should make these decisions on your behalf.
After you’ve made all the decisions, it’s time to talk to your loved ones. Schedule times to talk with them; don’t bring it up over Thanksgiving dinner or during your family vacation. It may be uncomfortable for you and your loved ones; you can help by bringing a packet of information they would need so it’s less overwhelming.
Managing Your Health
Document your medical wishes through advance medical directives, DNRs and living wills. You may also want to name a durable power of attorney for health care (also called a health-care proxy) to make medical decisions for you. This may require a HIPAA release to ensure that person can receive the detailed health information they need to make decisions on your behalf, should the need arise.
Managing Your Property and Financial Affairs
Document what you’d like to have happen with your finances and property through a will (which goes into effect at time of death) or revocable living trust (in effect at time of creation). You should also name a durable power of attorney who can act on your behalf in a variety of legal and financial matters, such as filing taxes, selling property, managing accounts and paying bills.
Once you’ve created your plan, it’s important to ensure that the plan and related information is accessible to at least two people. If you keep documents in a safe, be sure they know the combination. Compile a guide to your financial records with important information for all your accounts (retirement, investment, banking and family accounts like 529 plans), including:
- Account number
- Representative contact information
- Registration information (type of account, name(s) of holders)
- Beneficiary information
- Login credentials
Someone to Rely On
A trusted professional like a financial advisor can help you and your family navigate conversations about your assets and help ensure that the proper safeguards are in place. If you don’t already work with a financial professional, find a Farm Bureau financial advisor in your area to get started.