As we age, we usually think about three elements
of disability planning.
Who will make medical decisions for
me if I can’t make them?
What if I can’t make financial
decisions for myself?
If I need to be in a nursing home,
how will my family pay the costs?
Living Wills. You can appoint someone as your agent for
medical decisions. And, leave instructions about the nature and
extent of medical care you would like. See the page on Living Wills
for more information.
Mental Disability. You might have a stroke, or suffer from
dementia. If this happens, your family will have to go to court and
have someone appointed to manage your finances. That is, unless you
Long Term Care. Insurance is available. Typical nursing home
costs run between $40,000 and $70,000 per year. For the poor, the
state will pick up the costs of care in a nursing home. For those
blessed with wealth, home-health-care or a stay in a nursing home
will not deplete their estates. For the rest of us, Long Term Care
Insurance can help provide for proper care and ensure that we will
leave something for our families.
Long term care insurance can be expensive. The
policies and coverages are very complicated. If this might be an
option for you, I suggest you meet with two or three financial
representatives. Ask lots of questions, especially given your
Planning for Mental Disability.
If you don’t plan, your loved ones may have to
go through the delay and expense of having a court appoint someone
to manage your finances. You may end up paying for two attorneys in
the process. Record keeping and ongoing administration by the court
adds to the hassle and expense. Court proceedings are also open to
Alternatives include holding all assets jointly.
Then your spouse could manage finances if you can’t. But joint
ownership has other drawbacks, and may not cover all assets needed
for your care and support (for example your IRA). Other planning
options include a power of attorney or a well written revocable
living trust that makes provision for possible
A power of attorney is essentially the
appointment of someone to make decisions on your behalf. They can be
relatively simple, such as the statutory form adopted by the
Minnesota legislature. Other options include custom drafted powers,
and “springing” power of attorney.
The statutory form is relatively simple and
inexpensive. Financial institutions easily recognize it. The
drawback is that is effective immediately. The person you appoint
might do things you don’t want, at a time when you are still in full
control of your faculties.
I often recommend a “springing” power of
attorney. This power becomes effective only upon your disability.
You decide who determines if you are mentally impaired. If that
occurs, you have appointed someone to manage your finances. You can
leave specific instructions on how, and for whom, your assets are to
be managed. Revocable living trusts prepared in my office contain
similar provisions to the “springing” power of attorney. If you
can’t manage your own financial affairs, a disability trustee will
manage your assets.
areas of our lives can be planned to minimize the expense and
problems associated with impaired physical or mental ability. This
is one of the non-financial gifts we give to ourselves and our loved
The Law Offices of Richard
Jensen, 8680 Grier Lane, Heron Suite, Eden Prairie, MN