Estate Planning: Planning for Incapacity

In the area of estate planning, there are many different aspects that you will have to consider. One of these areas is what will happen if you are incapacitated. Here are a few things to consider about planning for potential incapacity in the future.

Choosing Representation

If you are incapacitated, you may not be able to make decisions for yourself. If this were to happen, you would want someone to be able to make decisions for you. In order to plan for this possibility, you need to choose someone to represent you if this were to ever happen. In order to choose someone to make decisions for you, there are a few different steps that you are going to need to take.

Healthcare Proxy

One document that you will need to fill out is called a healthcare proxy. The healthcare proxy is a vital part of the entire estate planning process. This is a document that will allow you to appoint someone to make medical decisions for you if you are unable to do so. Even after you sign this document, you will be able to make your own medical decisions as long as you are capable of doing so. When your primary physician decides that you are unable to make decisions for yourself, then the person that you appoint to make decisions for you will start to do so.

Your healthcare proxy will be able to make many different types of decisions such as whether you should continue to be fed with a feeding tube or not. The individual should strive to make the decisions that they believe the incapacitated person would have wanted.

Power Of Attorney

If you are incapacitated, you will not be able to handle financial matters either. In addition to appointing someone as your health care proxy, you also need to choose an agent to represent you in financial matters. In order to accomplish this, you will need to assign power of attorney to this agent.

Someone that has power of attorney privileges can do many different things for you financially. They can have complete control over banking transactions. This means that they can transfer money from one of your accounts to another account. This agent can also perform real estate transactions for you. This means that they could potentially sell your house or by a new one for you. They can also sell or purchase securities such as stocks or bonds. This individual can also file your taxes for you if you are unable to do so. They can also enter into contracts on your behalf.

If you are a business owner, the person that you provide power of attorney to can actually run your business for you. They will be able to make important decisions regarding how your business operates with the help of other people in your business. With so much power, you need to make sure that you appoint someone that you can trust no matter what.

What are the tax implications of estate planning?

The tax implications of estate planning are important when individuals are trying to plan what will happen to their assets after they die. When you are coming up with an estate plan, you should look at how much your beneficiaries will have to pay in estate taxes and gift taxes. One way to get around paying some of the estate taxes is to put your money into an irrevocable trust. With this type of estate planning tool, the money that you put into the trust will be removed from your estate, which means that it will not count when calculating estate taxes.

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