By Ilya Lyubimskiy, JD, CPA | Estate Planning & Probate Attorney and Author of I Wish I Talked to You Sooner
When most people hear “estate planning,” they think about what happens after someone dies.
Who gets the house? Who inherits the money? Do I need a will or a trust?
Those are important questions.
But some of the most important estate planning documents may be needed while you are still very much alive.
An accident, stroke, serious illness, surgery, or cognitive decline can leave someone temporarily or permanently unable to manage finances or make healthcare decisions.
As an estate planning and probate attorney, I think this is one of the most overlooked parts of planning.
People spend a great deal of time deciding what should happen to their property someday.
They should also ask:
What happens to me if I’m still alive but I can’t handle things myself?
Incapacity Does Not Always Look the Way People Expect
The word “incapacity” can sound like something that only affects someone who is elderly or permanently disabled.
That is too narrow.
Sometimes incapacity is temporary.
Imagine being hospitalized after an accident or undergoing a complicated surgery and being unable to communicate or manage your affairs for several weeks.
Bills still arrive.
Mortgage payments still need to be made.
Doctors still need decisions.
Insurance companies may need information.
Investments and businesses do not simply stop because you are unavailable.
Urgent problems can arise from hospitalization, accidents, strokes, or cognitive decline long before death becomes the issue.
A good estate plan considers both possibilities.
“My Spouse or Kids Can Just Handle It” May Not Be Enough
This assumption comes up all the time.
If something happens, your spouse will take over.
Or your adult child will call the bank.
Or someone in the family will talk to the doctors.
But family relationship and legal authority are not always the same thing.
For finances, a power of attorney can give another person (your agent) the legal authority to make financial decisions on your behalf. A durable financial power of attorney is commonly used for advance planning because it can continue to operate after incapacity.
Healthcare works through its own authority. A healthcare proxy or healthcare power of attorney allows someone you choose to make medical decisions if you cannot communicate those decisions yourself.
The point is not that your family is incapable of helping you.
The point is that you want to give them the authority they may need before there is an emergency.
Start With Your Financial Power of Attorney
A financial power of attorney allows you to choose someone who can handle financial matters for you within the authority granted by the document.
Depending on the document and applicable law, that may include things such as paying bills, dealing with bank accounts, managing investments, handling property, filing taxes, or addressing business matters.
A financial power of attorney is a way to give another person legal authority to make financial decisions for you when you cannot.
Without appropriate authority, your family may have to pursue a court process to obtain the ability to manage your affairs.
Terminology differs by state. In Colorado, for example, financial authority for an incapacitated adult may involve a conservatorship, while personal matters may involve a guardianship. The book discusses why a properly prepared financial power of attorney can help avoid putting the family in the position of seeking that authority from a judge.
That is a much bigger job than simply signing the right document ahead of time.
Then Ask Who Should Speak for You Medically
Your financial agent does not automatically become your healthcare decision-maker.
These are different roles.
A healthcare power of attorney allows you to identify the person you want making healthcare decisions if you cannot make or communicate them yourself.
Think carefully about whom you choose.
This person may need to:
- communicate with doctors;
- understand treatment options;
- make decisions quickly;
- advocate for your wishes; and
- handle pressure from other family members.
The person who is great with your finances may not be the person you want making medical decisions.
And that is perfectly fine.
Different jobs can call for different people.
Give Your Healthcare Agent Some Guidance
Naming someone is only part of the job.
Imagine telling a loved one:
“If I ever can’t make medical decisions, you’re in charge.”
Then imagine giving them no idea what you actually want.
That can put an enormous emotional burden on someone.
Advance care planning allows you to express preferences about medical treatment and identify the person who should speak for you. Sharing your wishes can make decisions easier for family members when you cannot speak for yourself.
A living will or advance directive can provide additional guidance about treatment preferences in certain serious medical circumstances.
You do not have to predict every medical scenario.
You are simply trying to give the person you trust something better than a blank sheet of paper.
Think About Access to Medical Information Too
Medical decisions require information.
Your healthcare decision-maker may need access to medical records, diagnoses, treatment information, or conversations with providers in order to understand what is happening.
Health Insurance Portability and Accountability Act (HIPAA) rules regarding patient privacy recognize certain legally authorized healthcare decision-makers as a patient’s personal representative, which can give that person rights to relevant health information depending on the scope and effectiveness of the authority.
Estate plans often address this issue through appropriate healthcare and HIPAA-related authorization.
The practical goal is simple:
If someone needs to advocate for you, make sure the legal documents do not unnecessarily leave them standing outside the door trying to figure out what is happening.
A Trust Can Also Play a Role During Incapacity
If you have a properly funded revocable living trust, it may also provide continuity even during incapacity.
A successor trustee can potentially step in to manage property held in the trust according to the trust’s terms.
But notice the important limitation:
Property held in the trust.
A trust does not automatically solve every financial issue.
Assets outside the trust may still require a financial power of attorney or another source of legal authority.
This is another example of why estate planning works best as a coordinated system instead of a collection of individual documents.
Choosing the Right People Matters as Much as Signing the Documents
One of the easiest estate planning decisions to make badly is choosing decision-makers automatically.
“My spouse first, then my oldest child.”
Sometimes that is exactly right.
Sometimes it is not.
Ask yourself who is actually suited for each responsibility.
Who is organized enough to deal with financial institutions?
Who stays calm under pressure?
Who understands your values?
Who will ask questions when something does not make sense?
Who lives close enough or is available enough to handle the job?
Who can deal with family members who may disagree?
The roles in an estate plan require real judgment and responsibility. A person should be selected because they are right for the job, not simply because their name comes next on the family tree.
Make Sure the People You Choose Know About It
There is another remarkably simple step people overlook.
Tell them.
You do not have to give your financial agent a spreadsheet showing every dollar you own.
You do not need to distribute copies of your estate plan at Thanksgiving dinner.
But the people you have chosen should generally know that they have been chosen and where the important documents can be found.
The book emphasizes that communication is part of effective planning: documenting wishes and talking with the people involved reduces guesswork, confusion, and delay.
A document that no one knows exists is much harder to use in an emergency.
Incapacity Planning Is Really About Keeping Control
There is an interesting irony about estate planning.
Some people avoid it because they do not want to give up control.
But planning is actually one of the best ways to keep control.
You choose the financial agent.
You choose the healthcare agent.
You provide the medical guidance.
You decide how your trust should operate.
You identify the people you trust before a crisis happens.
Without those choices in place, state law and court procedures may eventually have to provide a structure when you can no longer provide one yourself.
The book puts the central idea plainly: incapacity can happen to anyone, and estate planning is not only about transferring property after death. We also want to maintain control while we are alive.
Don’t Wait Until the Hospital to Start Planning
Estate planning is much easier when you are sitting at a desk making decisions calmly.
It is much harder when your family is trying to find an attorney between hospital visits.
That does not mean you need to obsess about everything that could possibly go wrong.
It means you should answer a few questions while you still have the luxury of time:
Who handles the money?
Who speaks to the doctors?
What guidance have I given them?
Where are the documents?
Who else needs to know?
That is one of the central ideas behind I Wish I Talked to You Sooner.
Estate planning should not begin only with the question:
“What happens when I die?”
It should also ask:
“What happens if I need help tomorrow?”
Planning for that possibility is not pessimistic. It is practical.
Learn more about I Wish I Talked to You Sooner and how to avoid the estate planning mistakes families too often discover when it is already too late.
About the Author
Ilya Lyubimskiy, JD, CPA, is a Colorado estate planning and probate attorney, Certified Public Accountant, and founder of Premier Legacy Law. He is the author of I Wish I Talked to You Sooner: How to Avoid the Worst Estate Planning Mistakes. Through his legal practice, he helps individuals and families navigate estate planning, probate, and trust administration with an emphasis on practical planning and avoiding preventable problems.
