Happy Wednesday!!! This week we are talking about incapacity planning. Two key documents that make up a comprehensive estate plan are your Power of Attorney and your Medical Proxy.
Medical Proxy: A medical proxy allows someone you appoint to make medical decisions on your behalf in the event of your incapacity. Your proxy can advocate for your wishes and approve a proper course of treatment. By not naming a medical proxy you run the risk of a family fighting. Remember Terri Schiavo?
Durable Power of Attorney: A Power of attorney allows somebody to manage your legal and financial affairs in the event of your incapacity. A loved one of your choice can step into your shoes and handle any of your contractual obligations. This includes accessing bank accounts, dealing with credit card companies, and paying your bills.
These documents are incredibly important because without them, a court can appoint what's called a guardian or a conservator. Guardians and conservators are court-appointed persons, tasked with managing the daily affairs and finances of disabled adults that are unable to make decisions for themselves or their property. Typically, this is a family member that fulfills this role, but it can be anybody.
Recently, Last Week Tonight star, John Oliver did a monologue on Guardianship:
***WARNING EXPLICIT LANGUAGE USED***
As you can see from the monologue, guardians wield an enormous amount of power over a person. For some individuals guardianship is an absolute necessity and is important to one's proper care. However, for the ordinary individual, the need for a guardian or a conservator can be eliminated if you have a valid Medical Proxy and Power of Attorney.
As stated in the above clip, it's important to have an honest conversation with your family about how you want your finances and affairs handled. By setting-up a proper estate plan you get to decide who manages your affairs, not the courts, relatives, or a private-pay guardian.
Until next time,