Many people think of those who live with disabilities as people in older years or those who have been diagnosed with a disability at birth or very young in their life. The truth is that a disability can happen to anyone at any time as a result of an illness or an accident.
If you end up suffering in an unexpected accident or coming down with an illness that renders you unable to work, this will impact your life and the life of your family members in multiple ways. To guard against making such a situation even more difficult, it’s important to take precautions to protect your interests ahead of time with an incapacity plan. Enabling the right people to act quickly in the manner you intend for someone else to help you can make a world of difference when there are already so many things to consider about how you adapt to your new life.
Many younger people in America expect that disabilities only affect others, but thousands of young people are seriously injured due to traumatic events every single year. Many critical medical conditions can also mean that a person suffers from disability very suddenly, such as a mental illness or cancer. These can affect people regardless of their age.
In fact, for 20-year olds in the United States, there is a 1 in 4 chance of becoming disabled prior to reaching retirement age. Therefore, it can be especially dangerous to ignore the opportunities with estate planning and incapacity planning in advance. You should not wait until something happens to you or a loved one to make the decision that you want to have, your care well thought out and appropriately addressed in advance. Schedule a consultation today with an incapacity planning lawyer to learn more.
Estate planning is about more than thinking of who will inherit your assets when you pass away. It is also important to think about who will manage your finances, your healthcare decisions, and your assets in the event that you become incapacitated.
Incapacity planning raises the question of whether or not it makes sense to confer legal authority to another individual or wait until someone has lost capacity to manage their own affairs. Under a power of attorney and agent who has been named is capable of controlling a principal’s financial property and legal affairs other than those assets that are held inside a principal’s trust.
The fiduciary authority’s scope conferred on a power of attorney agent can be extremely narrow or very broad. The majority of estate planning attorneys today will draft broad powers of attorney to cover a wide range of unexpected circumstances. This is primarily because an incapacity event such as a disability is usually unexpected and a very narrowly tailored power of attorney can prevent the agent from being able to do what he or she needs to do. In the event that a power of attorney is effective after it is signed, this avoids delays and difficulties associated with determining the incapacity of the principal and therefore does not need to involve any third parties. To learn more about incapacity planning and how to use a trigger to structure one, consult with an experienced New Jersey estate planning attorney today.
More and more senior Americans are forced to deal with the devastating diagnosis of Alzheimer’s. Without planning, an Alzheimer’s diagnosis can be a devastating financial blow to an individual and his or her family. A recent article discusses how individuals can take control of their financial futures by planning now for the potential of an Alzheimer’s diagnosis later.
One potential way through which a person can get funds to pay for medical care is through Medicaid. Medicaid is a need-based program, so a person must meet certain income requirements to apply. If a person is above the threshold to receive Medicaid, he or she must spend-down assets in order to qualify. However, the spend-down of assets must be done carefully,with the oversight of an estate-planning attorney. Importantly, Medicaid employs a look back provision that will disqualify certain distributions of wealth if they occur within five years of a person’s application for Medicaid.
Often, Alzheimer’s patients require more care than Medicaid will cover. One option to fill the gap is through long-term care insurance. These insurance policies provide broad coverage for care received in a patient’s home, assisted living facility or nursing home. It is important to get long-term care insurance early, as rates go up as a person ages. Additionally, it may be difficult to find an insurer after a diagnosis of Alzheimer’s.
Asset protection planning does not happen all at once. Rather, an individual’s or family’s asset protection strategies should grow and evolve with them. A recent article discusses several life events that should prompt an individual or family to revisit their asset protection strategies.
- A Run-In With The Law: As wealth advisory manager Heather J. Swob explains, “If you’re in a potential liability situation, the advisor should be kept aware. While there are look-back provisions that might keep you from moving assets, the advisor can still provide some valuable advice.” In addition to advice, it may not be too late to plan.
- Engaging in a Business Transaction: Business owners and investors get sued. Whether it’s a Partnership dispute, a lender’s claim, an employee lawsuit or some other claim, it’s wise to protect your assets before the onset of such a liability.
- A Struggle With Addiction: Although it may be embarrassing or difficult to discuss that you or a family member is struggling with addiction, it is important for your advisor to know what to look out for. According to Swob, “estate documents should be reviewed to keep assets out of the [addicted family member’s] control in the event of a sudden death.”
- You Are Experiencing Dementia or Other Deterioration of Mental Condition: If you are experiencing the early stages of dementia or other mental illness, time is of the essence. Once your mental capacity is affected, you may no longer be able to sign off on important documents that you have been putting off, such as a financial power of attorney.