While a lot of time and energy gets spent planning for what happens after we pass away (life insurance, funeral planning, funeral insurance, and wills), we often do not spend nearly enough time planning for what happens if we are alive, but incapacitated.
- Who is going to be responsible for our medical decisions?
- Who is going to pay our bills?
- What do we want to happen to us in the event of a medical emergency?
There are so many questions that need to be answered, and they typically need to be answered long before you are incapacitated.
Planning for all these potential issues is known as “incapacity planning.” It involves both legal documentation, verbal planning, and financial products aimed at making sure that you are cared for in the event of incapacitation ensuring that your wishes are respected and a plan is quickly in place.
The goal is to make sure that there are no questions, and that anyone in charge of your health, finances, and more can take action immediately upon situations where you are not capable of handling these things for yourself.
How to Plan for Incapacity
Incapacity planning involves preparing the products, services, and people that you might need in the event of incapacity. Examples of what you may need include:
- Healthcare Proxy – One of the most important steps is to choose someone you trust to make medical decisions for you if you can’t. This person, your healthcare proxy, will work with your doctors to ensure that your medical care reflects your preferences.
- Financial Power of Attorney – You’ll also want to assign someone to manage your finances. This person, often called your financial agent, will take care of things like paying bills, filing taxes, and keeping up with mortgage or rent payments.
- Living Will – A living will is a document where you can spell out your preferences for medical care, finances, and other important matters if you become incapacitated. It’s a way to ensure that your healthcare proxy and financial agent know exactly what you want.
- Long-Term Care Insurance – Besides assigning decision-makers, it’s wise to think about how your care will be funded if you’re incapacitated. Long-term care insurance can help cover costs, reducing the financial strain on your loved ones.
In addition to the basics, you might also want to think about creating trusts, managing digital assets, and ensuring that your designated decision-makers have access to your medical records (HIPAA authorization). These steps can help ensure that your affairs are handled according to your wishes and prevent unwanted decisions.
What Happens if You Don’t Plan for Incapacity?
If you don’t have an incapacity plan in place, others might have to make decisions for you, and those decisions might not reflect what you would have wanted. For example, hospitals could make healthcare choices for you, or courts might get involved in managing your finances. This could lead to missed bill payments, legal conflicts, or even medical treatments that don’t align with your wishes.
By planning for incapacity now, you can make sure that your preferences are honored, even if you’re unable to communicate them yourself. It’s about taking control of your future and making things easier for the people you care about.
If you need help with products like long term care insurance to help you plan for this type of event, or you’d like to discuss other insurance products and solutions you may need, please contact Kaia Insurance Group today.
