What to know about incapacity planning in California

Many Californians plan for when their time comes to leave this world. However, it’s important not to overlook the possibility of living but being incapacitated and unable to manage affairs. Incapacity could result from diseases like Alzheimer’s, dementia, temporary illnesses or an accident.

Incapacity planning is composed of several components. Some of the most important parts of an incapacity plan are health care power of attorney, property power of attorney, HIPPA release, revocable living trust and disability insurances.

A health care power of attorney allows a designated person to make medical decisions for the grantor. This should include the HIPPA authorization so that medical providers can legally share health information with designated individuals. A property power of attorney allows a designated person to manage all an individual’s assets. Medicaid planning should be included in this power of attorney. Medical costs can become expensive, and insurance and Medicare don’t always pay.

Medicaid planning allows a designated individual to shift assets from countable to non-countable categories, such as a home, to help the incapacitated individual qualify for Medicaid. This will help cover some of the costs of care. Having disability insurance helps to replace some of the income lost due to becoming incapacitated.

A revocable living trust is a trust that holds titles to property during the creator’s lifetime. If one becomes incapacitated, a designated trustee will be able to manage assets.

Since it’s impossible to know what the future holds, it’s wise to plan for the possibility of incapacity. Should one become incapacitated due to an illness or accident, an incapacity plan can help ensure that their wishes are followed and assets are handled properly. An attorney experienced in estate planning can explain all the important parts of an incapacity plan.