When most people think about estate planning, they focus on what happens after they pass away—who inherits their assets, who manages the estate, and how to avoid probate. But one of the most overlooked aspects of a comprehensive estate plan is planning for incapacity.

Incapacity, in this context, refers to a mental inability to manage your financial and legal affairs due to conditions such as dementia, Alzheimer’s, or other cognitive impairments. If you become incapacitated, someone still needs to pay your bills, manage your accounts, and make legal decisions on your behalf. Without proper planning, your loved ones may face unnecessary legal hurdles and stress.

Why Incapacity Planning Matters

If you become incapacitated and haven’t designated someone to act on your behalf, your family may need to go through a court process to have a guardian appointed. This can be time-consuming, expensive, and emotionally draining.

Instead, you can take proactive steps now to ensure that the right people are empowered to act for you when you can’t.

Key Legal Tools for Incapacity Planning

1. General Durable Power of Attorney

A General Durable Power of Attorney is a foundational document in any estate plan. It allows you (the principal) to name someone you trust (the agent) to manage your financial and legal affairs if you become unable to do so.

This document can cover:

• Bank accounts
• Investments and retirement accounts
• Real estate transactions
• Insurance and taxes
• Legal claims and business interests

It’s essential that this document is durable, meaning it remains in effect even after you become incapacitated.

2. Revocable Living Trust

While many people think of trusts as tools for avoiding probate, they are also incredibly effective during periods of incapacity. A revocable living trust allows you to transfer ownership of your assets into the trust while maintaining control as the trustee during your lifetime.

If you become incapacitated, your successor trustee - someone you’ve named in advance - can immediately step in and manage the trust assets without court involvement. This includes paying bills, managing investments, and handling real estate or business interests.

If you don’t already have a trust, now is the time to consider setting one up. It’s a proactive way to ensure your affairs are managed smoothly and privately, even if you’re unable to do so yourself.

Choosing the Right People

Whether you’re naming an agent under a power of attorney or a successor trustee of your trust, choose individuals who are:

• Trustworthy and responsible
• Familiar with your values and wishes
• Willing and able to serve when needed

Don’t Overlook This Critical Step

Incapacity planning is not just for the elderly. Accidents and illnesses can happen at any age. By putting the right documents in place now, you protect yourself and your loved ones from unnecessary stress and legal complications.

At Legacy Law Group, we help Ohio and Michigan families create estate plans that work - plans that protect you during your lifetime and preserve your legacy after you’re gone. Schedule your appointment now to start the process of creating or updating your estate plan.