While most people associate the possibility of incapacity with old age, the reality is that incapacity can strike anyone at any age because of a catastrophic accident or debilitating illness. Consequently, planning for the possibility of incapacity should be an essential part of your comprehensive estate plan. With that in mind, the attorneys at Legacy Care Law Firm discuss five crucial components that should be part of your Massachusetts incapacity plan.
What Should Be in My Massachusetts Incapacity Plan?
Just as it can be difficult to think about your own mortality, it can be hard to envision a time when you are incapacitated and unable to make or communicate your wishes regarding your finances or healthcare. Knowing that it could happen, however, should encourage you to plan accordingly. Incorporating the following components into your Massachusetts estate plan helps create a safety net that allows trusted individuals to manage your affairs and honor your wishes if you do ever become incapacitated:
- Revocable Living Trust: A Revocable Living Trust is an incredibly valuable tool for managing your assets if you become incapacitated. Unlike a Will, which only takes effect after your death, a Revocable Living Trust allows you to designate a Trustee who can manage your assets during your lifetime if you are unable to do so yourself. With a Revocable Living Trust, you are the Grantor (creator of the trust) as well as the Trustee as long as you are capable. You also appoint a Successor Trustee, however, who will take over the management of the trust assets if you are no longer able to manage your financial affairs. This ensures a smooth transition of control over your assets without the need for court intervention. Along with planning for the possibility of incapacity, a Revocable Living Trust offers probate avoidance benefits. Upon your incapacity or death, your Successor Trustee can distribute your assets or manage them in accordance with your instructions, providing you with flexibility and peace of mind.
- Financial Power of Attorney: A Financial Power of Attorney is another critical document for handling your financial matters in the event of your incapacity. This document gives a trusted individual, known as your “Agent,” the authority to make financial decisions on your behalf. These decisions may include paying bills, managing bank accounts, handling investments, or selling property. In Massachusetts, a Financial Power of Attorney can be durable or springing. A durable Financial Power of Attorney becomes effective immediately and remains in effect if you become incapacitated, while a springing Financial Power of Attorney only takes effect upon your incapacity, as determined by a physician. A traditional (non-durable) POA automatically terminates upon the death or incapacity of the Principal (you). A POA is not durable by default in Massachusetts, meaning that you must include specific language indicating that the POA is durable if you wish your Agent’s authority to survive your incapacity.
- Living Will: A Living Will is an essential document for expressing your preferences regarding end-of-life medical treatment if you are unable to communicate those wishes yourself. In most states, the terms of a Living Will are legally binding; however, in Massachusetts they are not legally binding. Your preferences, as expressed in a Living Will, can still serve as a vital guide for your family and health care providers when making decisions about your care though. A Living Will typically outlines whether you want life-sustaining treatment if you are in a terminal condition or a permanently unconscious state. It may also address issues like the use of artificial nutrition and hydration or whether you want to receive CPR in certain situations.
- Health Care Proxy: A Health Care Proxy is the legal document in Massachusetts that allows you to appoint someone, known as your Health Care Agent, to make medical decisions on your behalf if you are incapacitated. This document is crucial because it ensures that someone you trust is legally authorized to speak with your doctors and make medical decisions for you without the need to spend time and money seeking court approval. Unlike a Living Will, a Health Care Proxy empowers your Agent to make all medical decisions for you, not just those related to life-sustaining treatment, including decisions about surgeries, medications, long-term care, and other aspects of your medical treatment. In Massachusetts, a Health Care Proxy only becomes effective when your doctor determines that you are incapable of making decisions for yourself. Once that determination is made, your Agent will have the authority to make medical decisions for you, but they must do so in accordance with your previously expressed wishes and best interests.
- HIPAA Authorization: The Health Insurance Portability and Accountability Act (HIPAA) places strict limitations on who can access your medical records and health information. While this law is designed to protect your privacy, it can also prevent your loved ones or Health Care Agent from getting the information they need to make informed medical decisions on your behalf. A HIPAA Authorization allows you to designate specific individuals who are permitted to access your medical records and discuss your health with your doctors. This document is especially important if you have a Health Care Proxy or if multiple family members will be involved in your care, as it ensures they will have the information they need to make informed decisions. Keep in mind that even your Agent under a Health Care Proxy will not automatically be entitled to access your medical records, making a HIPAA Authorization form even more important.
Together, these five components of your incapacity plan create a comprehensive plan that prepares you for the possibility of incapacity and ensures that your affairs are handled smoothly and efficiently. They also greatly reduce the stress your loved one will experience and decrease the likelihood of the need for expensive and time-consuming litigation if you become incapacitated. Mosty importantly, they provide you with the peace of mind that comes from knowing that your wishes will be respected and your affairs will be in good hands if the unexpected happens.
Can We Help You with Your Massachusetts Incapacity Plan?
For more information, please join us for an upcoming FREE seminar. If you would like assistance with your Massachusetts incapacity plan, contact our estate planning attorneys in our North Andover, Woburn, and Beverly offices at (978) 969-0331. Our Salem and Nashua, New Hampshire office can be reached at (603) 894-4141.
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