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Friday, April 29, 2022

Planning for Incapacity in Michigan

Most people are familiar with at least some of the benefits of estate planning. For example, with an estate plan, you can determine who will inherit your assets after you pass away and help your loved ones avoid the probate process. Lesser known, however, is the ability of an estate plan to address incapacity. Through the estate planning process, you can designate one or more people to act on your behalf in financial, legal, and healthcare matters should you ever become unable to do so yourself. In this article, we discuss planning for incapacity in Michigan.

Reasons to Plan for Incapacity

There are two main reasons you should plan for incapacity. The first reason is to ensure that your financial matters are accounted for should you be become incapacitated. If you become incapable of filing your taxes, paying your bills, and managing your assets and investments due to dementia, catastrophic injury, or some other reason, someone will need to do these things for you. Through an estate plan, you can appoint someone to handle your financial matters in case of incapacity.

The second reason you should plan for incapacity is to appoint someone to make healthcare decisions on your behalf. In addition, patient privacy laws restrict who can access your medical information. Through estate planning, you can ensure that your family will have access to your medical information should you ever become incapacitated.

Important Incapacity Planning Documents

To properly plan for incapacity, you must include the correct documents in your estate plan. Important incapacity planning documents include:

  • Living trust: With a revocable living trust, you can name a successor trustee to take over if you become incapacitated. This type of trust allows you to dictate how trust assets will be managed and distributed. Should you become incapacitated, your successor trustee will be bound by your instructions.
  • Financial power of attorney: It is common for some financial matters to fall outside the purview of your living trust. Therefore, your estate plan should also include a financial power of attorney. With a financial power of attorney, you can appoint someone to pay your bills and manage your finances in case of incapacity.
  • Medical power of attorney: A medical power of attorney, also called a designation of patient advocate or a health care proxy, gives your agent the ability to make healthcare decisions on your behalf should you become unable to make such decisions on your own.
  • HIPAA authorization: The Health Insurance Portability and Accountability Act, also known as HIPAA, restricts who may access your personal health information. By including a HIPAA release or authorization in your estate plan, you can ensure that your loved ones will have access to your health information if you ever become incapacitated.
  • Living will: Finally, a living will allows you to provide instructions regarding end-of-life care in the event you become incapacitated.

Contact a Michigan Estate Planning Attorney

Planning for incapacity is one of the most important things you can do. When you address incapacity in your estate plan, not only do you help yourself, but you spare your loved ones the burden of making certain difficult decisions in the future. At Keating Law, PLC, attorney Thomas Keating can help you create an estate plan that addresses incapacity, plans for the distribution of your assets, and ensures that your family members remained protected for years to come. If you are ready to begin the estate planning process, please contact us today to schedule a free consultation.

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