It may seem obvious, but it’s important to note that incapacity occurs while you’re still alive, the author of a Trust Counsel article warns. The fact that Jay Leno needed to go to court to gain permission to manage his wife Mavis’ financial affairs (she is battling dementia) serves as a cautionary tale. The lesson – advance planning needs to include giving authority to handle your affairs, not only once you’ve died, but in the event that, while still alive, illness or injury renders you incapable of managing your own financial affairs.
The Leno story illustrates a crucially important point. As we explain to our Geyer law clients, there are two separate aspects to planning: documents that deal with your incapacity become null and void once you die, and documents that deal with your wishes after death are of no use while you’re alive even during illness or injury. As Trust Counsel explains, authority granted under a Power of Attorney ends as soon as the person granting the power dies. While you may be able to access your loved one’s checking account to pay bills while they’re alive, that ends immediately at death if your access was under a Power of Attorney.
Tim Cesnick, author of Winning the Estate Planning Game, writes that there are four basic components to estate planning:
- structure – legal documents, including wills, trusts, powers of attorney, and healthcare authorizations
- wealth preservation – keeping one’s wealth away from creditors, unnecessary expenses, spendthrift heirs, and taxes
- distribution of assets – selecting heirs
- 4. personal wishes – specifying funeral details, distribution of personal items, and care of pets
At Geyer Law, we stress to our clients how important it is to plan ahead for healthcare needs and possible future incapacity. In fact, it was just a few years ago that the State of Indiana broadened the choices for making health care wishes known, creating a single document called an Advance Directive for Health Care Decisions, in which you not only state your wishes concerning end-of-life treatment (life-prolonging procedures/resuscitation, palliative treatment/ nutrition/hydration) and your wishes for post death actions (burial/cremation, anatomical gifts), but also appoint a health care representative to consult with providers, making health care decisions on your behalf.
Estate planning is truly a matter of life and death!
– by Rebecca W.. Geyer
