Planning for incapacity is an integral part of estate planning. The primary tool for handling incapacity is a Durable Power of Attorney (DPOA) which empowers another to manage your financial affairs during the time you cannot. Essentially, everyone should have a DPOA to ensure that a trusted nominee is ready to act if needed and thereby to avoid the expense and potential conflict of a conservatorship proceeding in the event of incapacity and the unavailability of suitable alternatives.
A a power of attorney can may grant authority to make decisions relating to the personal care of the principal, including, but not limited to, determining where you will live, providing meals, hiring household employees, providing transportation, handling mail, and arranging recreation and entertainment.
The explicit powers granted by a DPOA are contained in the terms of the document. A power of attorney may be very broad or very limited and specific. Needless to say, the powers you give someone else to manage your personal and/or financial affairs will depend to a great extent on your particular situation (what assets you own, how much flexibility is required…) and how much you trust the proposed agent. This is highly individualistic and good reason why you need an attorney to thoroughly understand the law, your situation, and your desires before drafting the document.
The DPOA is just another piece of paper and means nothing while you are alive and competent to make your own decisions. It springs into being at the moment you are determined to be incapacitated. But when is that? And who makes this determination? Lacking any other guidance, state law requires two licensed physicians, in writing, can declare you to be incapacitated. But getting two physicians to make such a significant decision can be problematic – and time consuming. A far more effective method is to have an Incapacity Panel – people you trust who will collectively determine when you can no longer make decisions or care for yourself. The framework for an Incapacity Panel and the required procedures for its members can be defined in your estate plan, thus ensuring a smooth and orderly transition of responsibility to your agent upon incapacity.