Financial Tips

Don’t Overlook Incapacity Planning

Destiny is no matter of chance. It is a matter of choice. It is not a thing to be waited for, it is a thing to be achieved. – William Jennings Bryan

It is often said that we take more time planning our vacations than we do our future. While it may not be a fun topic for discussion, it is important to have plans in place should you become physically or mentally unable to manage your own affairs. Doing so in advance will ensure you are able to provide input on how things should be managed.

When you review the statistics, as we progress in age, the chances increase that we will require more help in making decisions. While friends or family may be able to help with things like buying groceries and paying bills, advance planning is required for more complex tasks such as selling real estate, gifting assets to your children, or making critical medical decisions.

Depending on the needs of the individual or family, incapacity planning may include a number of legal documents and planning techniques such as an advanced healthcare directive, living will, property powers of attorney and health care powers of attorney. A guardianship, which is a court-supervised proceeding and names an individual or entity to manage the affairs of an incapacitated person, may be an unintended result if planning has not been accomplished through other legal mechanisms.

A comprehensive approach should include a review of the current will, the general power of attorney as well as a reaffirmation of all beneficiary designations. Beneficiaries should be reviewed periodically for all bank accounts, retirement plans, pension plans, life insurance policies and annuities, and it should also be determined whether or not accounts should have a “payable on death” designation. This would mean that funds would not be subject to probate, instead they would pass directly to the named beneficiary which provides quicker access to liquid assets by avoiding the scrutiny of the court. If the funds are not in a trust and do not have the payable on death or beneficiary designations, the estate must be probated through the court which can take several months. If you die without a will, the court will probate your estate which means the court will decide how your estate should be distributed. This was recently brought to light with the passing of Prince. This blog outlines what can be learned from that estate planning blunder.

It may be worthwhile to consider a trust which creates a legal entity that holds your assets for you so that your estate does not have to go through probate when you die. Creating a revocable living trust also helps to prepare for possible incapacity as you are able to appoint a disability trustee. This individual or corporate trustee would be empowered to administer the trust should you become incapacitated at some point in time.

After you have done the planning, determine a central place to keep important documents such as wills, trusts, powers of attorney, etc. Often, particularly in times of emergency and stress, we get confused and don’t know where something important might be. Determining this location in advance and sharing it with those closest to you will help ensure your wishes are carried out. Do you need assistance with incapacity planning? We can help create a custom plan that meets your needs. To get a conversation started, contact me at 610-554-2755.


Investments offered by Univest Bank and Trust Co.’s Trust Division are not insured by the FDIC or any federal government agency, are not a deposit or other obligation of or guaranteed by the depository institution, and are subject to risks, including the possible loss of  principal amount invested.

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