Say somebody close to you—a parent, a cousin, a friend—becomes incapacitated and is unable to make medical, financial or other personal decisions. If they have no planning documents in place (i.e., a power of attorney for financial or medical decisions), who makes decisions on their behalf?
Well, the court will tell you. They will appoint a person or entity to make crucial decisions on behalf of your loved one, such as living arrangements, financial matters and healthcare choices. Perhaps the appointed guardian is a trustworthy friend or family member—but perhaps they are not. Courts may select outside professionals, including care facility staff, government employees, or even a lawyer, to serve as a guardian, strangers who do not know the person in question and who may not always act in accordance with that individual’s wishes.
So, how do you avoid this situation? Planning, planning, planning. Having some key documents in place ensures your wishes, including preferred guardians, are followed.
Perhaps the most important documents to have in place are powers of attorney documents (POA) and a living will (advanced directive). Such documents tell financial institutions, advisors, lawyers, hospitals/medical providers and the courts who you want to make your financial and/or medical decisions should you become unable to do so and what you do or you do not want at the end stage of your life. A POA can be limited and temporary in scope, focusing on finances or healthcare, and may be durable, which remains in effect long term should someone become ill or disabled.
These estate planning documents should be part of a comprehensive estate plan that includes other documents like a last will and testament and or a revocable trust. These documents should be carefully thought out, and the person selected should be capable and trustworthy as they might have to make life-or-death decisions. Many select close friends or family members to fill the roles, but others opt for a trusted professional such as an accountant or lawyer.
Many folks are intimidated by estate planning or by thinking about contingency plans in case they are incapacitated, but it is far better to conquer those fears than to let the courts make decisions for you or your loved ones. If you know you have the right people and documents in place should something happen to you, you will find peace of mind in knowing that your choices will be honored.
