Estate Planning Isn’t Just About Death: What Happens If You Become Incapacitated?

When most people hear the words estate planning, they immediately think about death.

Who gets the house?

Who inherits the money?

Who handles the estate?

Those are important questions.

But there is another situation your estate plan should address—one that could affect you and your family while you are still very much alive:

What happens if you become unable to make decisions for yourself?

A serious illness, stroke, accident, cognitive decline, or other medical condition could leave you temporarily or permanently unable to manage your finances or communicate healthcare decisions.

If that happens, someone may need to pay your bills, manage your accounts, communicate with doctors, handle your property, or make decisions about your care.

The question is:

Have you decided who that person should be?

Or will your family have to figure it out during a crisis?

1. Who Will Make Your Healthcare Decisions?

Imagine you're hospitalized and unable to communicate.

Your doctors need a decision about your treatment.

Your spouse believes they know what you would want. Your adult child has a different opinion. Another family member remembers a conversation you had years ago.

Who gets to decide?

This is one reason incapacity planning is such an important part of an estate plan.

In Illinois, a Power of Attorney for Health Care allows you to designate an agent to make healthcare decisions for you when you cannot make those decisions yourself.

That can include decisions involving medical treatment and other aspects of your care, depending on the authority you provide and the circumstances.

More importantly, you've chosen the person yourself.

Instead of leaving your family to debate who should speak for you, your estate plan can answer the question in advance:

“If I can't speak for myself, this is the person I trust to speak for me.”

2. Who Will Handle Your Money and Property?

Healthcare is only part of the equation.

Your financial life doesn't stop because you're sick or incapacitated.

The mortgage or rent may still need to be paid.

Utilities continue.

Insurance premiums may be due.

Taxes may need attention.

Property may need to be maintained.

Financial accounts may need to be managed.

If you own a business, someone may need authority to address business matters as well.

An Illinois Power of Attorney for Property can allow you to designate an agent to handle financial and property matters on your behalf according to the authority granted in the document.

Without proper planning, your family shouldn't simply assume they can step in and access everything because they're related to you.

Being someone's spouse, son or daughter doesn't automatically mean you have unrestricted authority over that person's financial affairs.

That's why the question isn't simply:

“Who would help me?”

It's:

“Who would have the legal authority to help me?”

Those are two very different things.

3. What Role Does Your Trust Play During Incapacity?

If you have a revocable living trust, you may think of it primarily as something that determines what happens to assets after death.

But a properly designed and funded trust can also be an important part of incapacity planning.

Typically, you manage the assets in your trust while you're able to do so.

Your trust can also establish what happens if you can no longer manage those assets yourself, including when and how a successor trustee may step in.

That can provide continuity in managing trust assets during your lifetime.

But there is an important catch:

The trust generally needs to actually own or control the appropriate assets for the trust provisions to govern those assets.

Creating a trust and funding a trust are not the same thing.

If you signed the trust years ago but never transferred appropriate assets into it—or acquired new assets afterward without coordinating them with your plan—you may have gaps.

That's another reason estate planning shouldn't end when the documents are signed.

4. What Happens If You Don't Have a Plan?

This is where incapacity planning becomes especially important.

Families sometimes assume:

“If something happens, my spouse will just take care of everything.”

Or:

“My kids know what I want.”

Knowing what you want and having the legal authority to carry it out are not necessarily the same thing.

If you become unable to manage your personal or financial affairs and you haven't put appropriate documents in place, your family may need to explore a court-supervised guardianship or other legal process to obtain authority to act for you.

That can mean addressing legal issues at exactly the time your family is already dealing with a medical crisis.

Planning ahead may provide tools that reduce the likelihood that your family will need to rely on a court process for decisions that could have been addressed in advance.

5. Choosing an Agent Is About More Than Choosing Someone You Love

People frequently choose a spouse or adult child as their agent.

That may be exactly the right choice.

But this isn't an honorary title.

It's a job.

The person you select may eventually be responsible for making serious decisions during a stressful time.

When choosing someone, consider whether the person is:

• Trustworthy

• Responsible

• Comfortable making difficult decisions

• Able to communicate with family members and professionals

• Willing to follow your wishes even if they personally disagree

• Organized enough to manage financial matters if necessary

• Available and capable of serving when needed

You should also think about backup agents.

The person you choose today may be unable or unwilling to serve years from now.

A good plan considers what happens next.

6. Does Your Family Know What You Actually Want?

Legal authority matters.

So does communication.

Your healthcare agent shouldn't have to learn your values for the first time while standing in a hospital hallway.

Think about the decisions that matter to you.

What are your feelings about certain types of medical care?

What does quality of life mean to you?

Who should be involved in important conversations?

Are there religious, personal or family considerations you want your agent to understand?

Where are your important documents?

Who should be contacted if something happens?

These conversations aren't always comfortable.

But having them while you are healthy and able to explain your wishes can make an extraordinarily difficult situation a little clearer for the people you love.

7. Is Your Incapacity Plan Still Current?

Maybe you already have powers of attorney and a trust.

That's a great start.

Now ask yourself:

When did you sign them?

If your documents were created many years ago, the people, assets and circumstances in your life may have changed.

Perhaps the person you named as your healthcare agent is no longer the person you would choose.

Maybe you've divorced or remarried.

Your children may now be adults.

You may own different property.

You may have opened new financial accounts.

Your health may have changed.

Or the person you named as your backup agent may have died, moved away or become unable to serve.

An estate plan should reflect the life you're living now—not simply the life you had when you first signed the documents.

Incapacity Can Be Temporary, Too

There is another misconception worth clearing up.

Incapacity planning isn't only about dementia or permanent cognitive decline.

Someone could temporarily be unable to manage their affairs because of an accident, surgery, serious illness or other medical event.

You might recover completely.

But during the period when you cannot act for yourself, important decisions may still need to be made.

That's why incapacity planning isn't something reserved only for older adults.

Adults of many ages can benefit from deciding who should have authority to act if they temporarily or permanently cannot act for themselves.

A Complete Estate Plan Should Answer Questions About Your Life, Not Just Your Death

Estate planning isn't simply about deciding who inherits your assets someday.

A thoughtful plan should also consider what happens to you if you need help during your lifetime.

Ask yourself:

Who speaks for me when I can't?

Who handles my finances if I can't?

Who manages the assets in my trust?

Does that person have the legal authority they need?

Does my family know what I want?

Are the people named in my documents still the people I trust today?

If you don't know the answers, that may be the most important reason to review your estate plan.

Review Your Incapacity Plan With Correa Law

You shouldn't have to wait for a medical emergency to discover that an important piece of your estate plan is missing.

Correa Law helps Illinois individuals and families create and review estate plans that address not only what happens after death, but also who can act on their behalf if they become unable to make decisions during their lifetime.

If you haven't reviewed your powers of attorney, trust, or other estate planning documents recently, contact Correa Law to schedule an estate planning consultation or review.