When you are going through day-to-day life as a healthy adult, the incapacity planning can seem utterly irrelevant. Of course, we all know that people sometimes suffer debilitating injuries or illnesses, but it still seems unlikely to occur. While this line of thinking is understandable, comprehensive estate planning is important for all responsible adults. Here, our Ashland estate planning attorney will explain the benefits of including a power of attorney.
Planning for possible incapacity means having a power of attorney
The average lifespan in the US is 78. Once you reach the age of 67 — and most people would expect to reach this age — it is likely that you will live until you are at least 85. People who reach an advanced age are much more likely to become incapacitated for a variety of reasons, but Alzheimer’s disease alone has a very wide reach.
According to the Alzheimer’s Association website, 45 percent of people who are 85 years of age and older have contracted the disease. You probably know that Alzheimer’s disease causes dementia, and people with dementia are eventually become unable to handle their own affairs.
Importance of Incapacity Planning
If you do nothing to prepare for incapacity and you do become unable to make sound decisions on your own, the state could appoint someone to act as your representative through a guardianship proceeding. Though a guardianship is one solution, there are drawbacks associated with court intervention. Let our Ashland estate planning attorney help you plan for unexpected situations.
Using a durable power of attorney of incapacity planning
This is why incapacity planning is important. You can usually proactively prevent a guardianship if you execute legally binding documents called durable powers of attorney. With a durable health care power of attorney, you name someone to make medical decisions on your behalf if you are incapacitated. You would add a durable financial power of attorney to name a financial manager.
Unfortunately, many people with Alzheimer’s disease ultimately reside in nursing homes. Of course, there are people who require nursing home care for other underlying reasons. In all, about 45 percent of elders who are at least 85 years of age become nursing home residents. Nursing home care is not something that you can easily pay for out-of-pocket. Depending on the nursing home and the geographic area, it can cost over $100,000 per year for a private room in a nursing home.
Medicare and Medicaid coverage is not a guarantee
The Medicare program does not pay for nursing home care. This form of care is considered to be custodial care, and Medicare is not set up to absorb custodial care costs. Medicaid is a different government program that does pay for long-term care, but you cannot qualify if you have significant assets in your own name. If you were to include a gifting provision when you execute your durable power of attorney, in some circumstances, the agent would be able to give gifts on your behalf to help you qualify for Medicaid to pay for nursing home care.
Our Ashland estate planning attorney can help you prepare
As you can see, having an incapacity plan is important. A great deal can be lost if you do not prepare yourself for these contingencies . If you do not have a plan in place, or if a plan you created a number of years ago is out of date, we are can assist you. Our firm would be glad to review your existing plan or help you put an initial plan in place.
Join us for a FREE seminar today! If you have questions regarding a power of attorney or any other estate planning matters, please contact the experienced attorneys at The Potter Law Firm for a consultation. You can contact us either online or by calling us at (606) 324-5516 (Ashland, KY) or (859) 372-6655 (Florence, KY), or for individuals in the Charlotte, North Carolina, area (704) 944-3245. We are here to help!