Incapacity planning–a term that many may not be familiar with, but it is an important part of estate planning in Colorado. Many people assume that incapacity planning only affects the elderly or those who are ill. However, this couldn't be further from the truth.
Incapacity can happen to anyone at any age, and if you do not have a plan in place should something unexpected happen, then your loved ones could be left vulnerable and unprotected.
Colorado residents should familiarize themselves with incapacity planning and its associated legal processes to ensure their family is cared for if something happens to them. In this blog post, we will explain what incapacity planning is, why it's important for Colorado residents, and the benefits of having an incapacity plan so that you can make an informed decision.
What Is Incapacity Planning?
Incapacity planning refers to a legal process that enables individuals to make decisions regarding their medical care and finances if they become incapacitated due to physical or mental illness. The goal of incapacity planning is to ensure that individuals have a plan that outlines their wishes and appoints someone to act on their behalf when they cannot make decisions for themselves. Incapacity planning encompasses a range of legal techniques, such as:
1. Health Care Powers of Attorney
2. Property Powers of Attorney
3. Living Wills, Advance Health Care Directives
Property Powers of Attorney enable individuals to appoint an agent to make financial decisions on their behalf. Health Care Powers of Attorney allow individuals to appoint a person to make medical decisions on their behalf. Living Wills or Advance Medical Directives provide instructions for medical care in the event of incapacitation.
Guardianships/Conservatorships are legal documents that allow a court to appoint a person to make decisions on behalf of an incapacitated individual. Simply put, incapacity planning provides individuals with the means to make their wishes known and ensure that someone can act on their behalf in the event of incapacitation.
An incapacity plan should be tailored to the individual's specific needs and wishes. Individuals must discuss their incapacity plan with their family members and medical professionals to ensure that their plans are followed if necessary. As a colorado resident consulting a lawyer is also important in order to ensure that all legal documents are properly prepared.
Why Incapacity Planning Is Important For Colorado Residents:
Incapacity planning is an essential part of the estate planning process that is often overlooked. It is the process of creating a legal document that designates individuals to make important decisions on your behalf if you become unable to make them yourself. This can include decisions related to medical care, finances, and other important matters. There are several reasons & benefits why incapacity planning is particularly important for Colorado residents.
Protection from Court Intervention:
If you become incapacitated and do not have an incapacity plan in place, a court may appoint a guardian to make decisions on your behalf. This process can be costly and time-consuming, and the appointed guardian may not necessarily make decisions that align with your wishes. By having an incapacity plan in place, you can ensure that the individuals you trust are appointed to make decisions on your behalf and that court intervention is avoided.
Choice of Decision-Makers:
Incapacity planning allows you to choose the individuals who will decide on your behalf if you become incapacitated. This can include a family member, friend, or other trusted individuals who know your wishes and can make decisions that align with them. By designating specific individuals in your incapacity plan, you can ensure that the right people are making decisions on your behalf.
Incapacity planning allows you to specify your medical wishes in case you become unable to make decisions for yourself. This can include life support, medical treatment, and end-of-life care decisions. By having an incapacity plan in place, you can ensure that your medical wishes are followed and that you are not kept alive against your wishes.
Incapacity planning also includes financial planning for the management of your assets in case you become incapacitated. This can include appointing a financial decision-maker, creating a trust, or setting up a durable power of attorney. By having an incapacity plan in place, you can transfer ownership of your assets to charitable organizations or other family members and can minimize taxes and other expenses.
Peace of Mind:
Finally, incapacity planning provides peace of mind for both you and your loved ones. Knowing that your affairs are in order and that your wishes will be followed can alleviate stress and uncertainty in case of incapacity. It also ensures that your loved ones will not have to go through a lengthy and expensive court process to make decisions on your behalf.
In simple words, incapacity planning provides protection, choice, medical wishes, financial security, and peace of mind to Colorado residents. It is a vital part of an estate plan that should not be overlooked. When operating your incapacity plan, you will need to appoint an attorney in fact who can make a medical decision and others on your behalf if necessary.
With careful planning and the help of a qualified and experienced attorney, you can ensure that your medical, financial, and other wishes are followed if you become incapacitated.
What is the Colorado PERA disability benefits program?
Colorado PERA (Public Employees' Retirement Association) provides disability benefits to qualifying members of its Defined Benefit (DB) Plan. This program offers two tiers: Short-Term Disability (STD) Coverage and Disability Retirement Coverage. Members who are unable to work due to an injury or illness can receive monthly income at no additional cost.
How do I change a Will in Colorado?
In Colorado, you can change or revoke your will at any time by either physically destroying the entire document, such as by burning or tearing it, with the intent to revoke it, or by executing a new will that contradicts the terms of the previous one.
It's advisable to consult with a professional attorney to ensure compliance with legal requirements and to avoid potential challenges to the validity of the new will.
What happens if there isn't a plan for incapacity?
When you don't have an incapacity plan, there is a risk that a court will appoint a conservator and/or guardian to manage your affairs, including your health care and financial decisions.
This court-appointed individual will make all decisions for you, which can be time-consuming and expensive for you and your family. Establishing a comprehensive incapacity plan in advance can ensure your wishes are followed and prevent unnecessary stress and legal expenses.
What are the requirements for the PERA disability benefits program?
To qualify for disability benefits under the Public Employees' Retirement Association (PERA), you must meet the following eligibility criteria:
- Submit your application to PERA within 90 days of leaving PERA-covered employment.
- Have earned at least five years of service credit, with at least six months of credit earned during the most recent membership period.
- Be ineligible for service retirement.
- Have not refunded your PERA account if you are an inactive member.
Meeting these requirements is essential to qualify for Colorado PERA's disability benefits program. Failing to meet any one of these criteria will result in your ineligibility.
How is incapacity determined in Colorado?
In Colorado, incapacity is determined through a legal proceeding called guardianship or conservatorship. A court must find by clear and convincing evidence that an individual lacks the ability to effectively manage their financial and/or personal affairs. The court may appoint a conservator or guardian to manage the individual's affairs, or the individual may designate a power of attorney or advance directive in advance to avoid court intervention.