Estate planning might not be the sexiest topic, but trust me—it’s as critical as it gets. When it comes to planning for the unexpected, a little effort now can save your family (and you) a world of hurt later. Let’s bust some myths and answer some burning questions about incapacity planning—the plan you hope you’ll never need but really, really should have.¹
Myths About Incapacity Planning
Myth 1: “I’m young. I don’t need to worry about this.”
Reality: Youth doesn’t make you invincible. Disability can strike anyone at any time, and the statistics don’t lie: 25% of 20-year-olds will face long-term disability before they retire. Whether it’s an accident, illness, or something more serious, having a plan in place gives you control when life throws a curveball.
There are more than 42 million disabled Americans—around 13 percent of the population.² The highest percentage of people with disabilities is in the 65-and-over population. ³According to the Department of Health and Human Services, more than half of Americans turning 65 today will develop a disability like Alzheimer’s disease or Alzheimer’s disease-related dementias serious enough to require long-term services and support.4 At age 45, the lifetime risk for Alzheimer’s disease is 1 in 5 for women and 1 in 10 for men.5
While not every disability will lead to your becoming unable to manage your own affairs, and the odds of you becoming unable to manage your own affairs may be relatively low, if an injury or illness is bad enough, it is important to have a backup plan so that someone you trust can step in to make your medical and financial decisions for you if necessary.
___________________
1The Faces and Facts of Disability: Facts, Soc. Sec. Admin.,https://www.ssa.gov/disabilityfacts/facts.html (last visited Mar. 20, 2024).
2Katrina Crankshaw, Disability Rates Higher in Rural Areas Than Urban Areas, U.S. Census Bureau (June 26, 2023), https://www.census.gov/library/stories/2023/06/disability-rates-higher-in-rural-areas-than-urban-areas.html.
3Id.
4National Planto Address Alzheimer’s Disease: 2022 Update, ASPE (Dec. 20, 2022), https://aspe.hhs.gov/reports/national-plan-2022-update.
5Alzheimer’s Disease Facts and Figures, Alzheimer’s Ass’n, https://www.alz.org/alzheimers-dementia/facts-figures (last visited Mar. 20, 2024).
Myth 2: “My spouse can handle everything if I can’t.”
Reality: Nope. Your spouse isn’t automatically granted legal authority to make decisions for you unless you specifically give them that power. Without proper documents like powers of attorney or a health care surrogate, your spouse could face weeks or months of legal battles to step in on your behalf.
Myth 3: “I can make decisions for my adult child if they can’t.”
Reality: Once your kid hits 18, the law sees them as an independent adult. That means you’ll need legal documents—like medical and financial powers of attorney—to step in if they can’t act for themselves. Sending your kid off to college? These documents should be on your checklist.
Myth 4: “Estate planning is just about death.”
Reality: Sure, estate planning addresses what happens when you’re gone, but it’s also about protecting yourself while you’re alive. Incapacity planning ensures someone you trust can manage your affairs if you can’t.
Myth 5: “I’ll deal with incapacity planning when I need it.”
Reality: Here’s the kicker: if you’re incapacitated, you can’t legally create a plan. Planning ahead is the only way to ensure your wishes are carried out.
FAQs About Incapacity Planning
Q1: Isn’t being disabled the same as being incapacitated?
A: Not quite. In estate planning, incapacity means you can’t handle your day-to-day business—paying bills, managing property, or making medical decisions. You might be physically fine but mentally unable to make these decisions.
Q2: How can I make sure my finances are managed if I’m incapacitated?
A: Two tools can help:
- Financial Power of Attorney: Names someone you trust to manage your money, pay bills, and handle legal matters.
- Revocable Living Trust: Puts your assets into a trust you control while naming a backup trustee to step in if you can’t.
Q3: How do I avoid being kept alive by machines if I’m brain-dead?
A: A living will lets you specify what medical treatments you do (or don’t) want if you’re in a permanently unconscious state. From ventilators to feeding tubes, you can outline your preferences and ensure your loved ones don’t have to make those tough calls for you.
Q4: Who will make healthcare decisions for me if I can’t?
A: Your healthcare power of attorney names someone to make medical decisions on your behalf.
Pro tip: Choose someone who’s level-headed in a crisis and name a backup, just in case.
Q5: Who will handle my finances if I can’t?
A: A financial power of attorney or revocable living trust can empower someone you trust to take the reins. Without these documents, a court will decide who gets to manage your money—and that could be a long, messy process.
The Bottom Line
Incapacity planning isn’t about doom and gloom—it’s about control. By taking a few proactive steps, you can protect yourself, your family, and your future. Think of it as hard work that pays off in the form of peace of mind.
Ready to get started?
Give us a call today, and let’s roll up our sleeves and get to work. Your future self will thank you.
