Documents called a Durable Power of Attorney and Health Care Proxy, which give authority to an agent which continues despite the disability or incapacity of the make of the power. It is a substitutue for a court-appointed guardian or conservator.
While the need for estate planning has received wide attention, planning for disability has not. The reasons are apparent. Death is inevitable, but few people realize just how likely a period of prolonged disability is, or the magnitude of the financial and personal management problems which will result if a disability occurs. Statistics tell us that the overal rate of people with disabilities in the US is 12.8%; 10.6% of individuals ages 18 to 64 have a disability and 35.2% of individuals ages 65 and over have a disability.
In the past, the only solutions to assist in both management and personal health care decisions for a person who became incapacitated was the court appointment of a guardian or conservator. We now have the Durable Power of Attorney and Health Care Proxy, which expressly survive a principal's disability or incapacity. Their effectiveness continues despite the incapacity of the principal. Furthermore, if you do not have a Durable Power of Attorney and/or Health Care Proxy and become incapacitated, the only recourse will be for your family to ask the court to appoint a guardian and/or conservator for you. Such a procedure is cumbersome, public, time-consuming and expensive.
While the focus may be planning for disability, you do not have to be disabled to have an agent act on your behalf under a Power of Attorney. For example, you may hire a bank or investment advisor to manage your securities. You may have given a POA to someone to sign checks drawn on your bank account because it is more convenient. The important thing is that you do not want these types of services stopped when you need them most, namely, when you suffer a serious disability. This is precisely what the Durable Power of Attorney insures against because the agent you have selected will still be authorized to act on your behalf; same with the Health Care Proxy. Many people who suffer serious illnesses recover, but nevertheless undergo a prolonged period where it might be difficult if not impossible to manage their financial and medical/personal affairs.