The primary issues that come to mind when many consider estate planning are the creation of wills and trusts. While settling a plan for the division of assets upon one’s death is an essential component of the estate planning process, it is not the only focus. There are many other benefits that a simple estate plan can bring New Jersey residents. Chief among these are provisions for incapacity.
Incapacity planning involves the efforts made to grant decision-making powers to trusted individuals. In the event that one becomes incapacitated due to illness or injury, these documents grant the ability for one’s chosen representative to step forward and make important decisions on one’s behalf. The end result is a much smoother period of transition than if there were no guidelines in place.
One document that everyone should consider is a financial power of attorney. This allows an individual to select one or more representatives who would have the authority to make financial decisions on one’s behalf. Without this document, there can be a high level of contention among loved ones over who should handle these matters as well as how one’s finances should be managed.
A similar document is a health care power of attorney. This is the legal designation of the individual who is authorized to make medical decisions on one’s behalf. Having this important estate planning task completed can greatly improve one’s medical care, as the representative can step forward and begin making decisions right away. Without a health care power of attorney, medical staff will have to rely upon one’s next-of-kin to make these decisions. In the aftermath of an illness or accident, those individuals may not be in the best emotional state in which to make these types of decisions.
Perhaps the most important aspect of including incapacity planning into a simple estate plan is the control that these documents provide. Individuals can not only designate their chosen representative for both financial and medical decision-making, it is also possible to clearly outline the types of decisions that one would like to be made. In this way, New Jersey residents can provide for their own needs, even in the event that incapacitation becomes an issue.
Source: The National Law Review, “Estate Planning: You Need an Incapacity Plan that Works When It’s Needed“, Feb. 3, 2015