So much goes into planning for when one dies, but not much thought goes into planning for other phases of life. Incapacity is a real issue for a lot of families, one that sometimes creeps up in the form of dementia or hits all at once. The best fix is to be prepared. The best way to be ready for the unexpected is to have documents like durable powers of attorney (DPOAs) and advance health care directives (AHCD) in place.
What is a durable power of attorney?
A document, limited or general, that is used to nominate an agent to make financial decisions in the event of your incapacity. It grants an agent powers over your finances. It can be made effective immediately or in case you become incapacitated. This power terminates at death of the principal.
What Role does a DPOA play in your estate plan?
It allows an agent to manage assets that have been left outside the trust. It also allows the agent to receive trust assets when necessary.
What is an advance health care directive?
A document that is used to nominate an agent to make health care decisions in the event of your incapacity. In this document you will designate end of life decisions, leave general instructions on future care, and your organ donor status. It can be made effective immediately or in case you become incapacitated. This power, like the DPOA, terminate at the death of the principal.