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When most people create their estate plan they are just thinking about the point in time after they are gone. There is a lot that can happen to you personally before that point Specifically, people can face incapacity or diminished capacity – the ability to carry out life on a normal day to day basis.

I see this situation all the time, especially with elderly clients – their memory is slipping and their ability to process new information is limited because the short term memory just isn’t working.

The risk faced by adults is that in the event of incapacity, there is no one to act for them.  What if you can’t – or shouldn’t – make decisions for yourself?

In extreme circumstances a conservatorship may be required.  This is a lengthy, potentially expensive process where the court determines that the person is completely incapable of managing their personal affairs.  The legal standard of proof is high, and may be impossible to meet in some cases.

The better alternative is to have a Power of Attorney and a Health Care Directive in place.

Making Financial Decisions – Power of Attorney

The Power of Attorney creates your own personal agent who can act in your place in financial matters.  The powers granted can vary greatly in each document, and can be customized to meet the client’s exact wishes.  This means that your designated agent can step up to assist you with all your finances at your direction.

Making Medical Decisions – Health Care Directive

The Health Care Directive gives the person you choose the ability to discuss your medical situation with your doctors and nurses, and make decisions regarding your care.  This becomes extremely important when you cannot express your own wishes and desires.  In fact, most hospitals now will present you with a very simplified version of a Health Care Directive when you are admitted.

Think of these documents as legal “insurance” for yourself.  If something were to happen to you, these two documents allow the person you’ve designated to step into your shoes and continue paying the bills and making the important decisions that still need to be made.