Incapacity planning occurs when a designated person manages your property and personal affairs due to your mental or physical incapacitation. If you find yourself in this situation, consider incapacity as part of an estate plan in New Jersey. If you don’t include incapacity planning from the beginning, you could face serious financial costs in the future.
The consequences of improper planning
Many people do not plan their estates properly because they underestimate the severity of future mental or physical impairment. If they do plan for potential incapacitation, they may undervalue the costs and assume that it’s more affordable than it is.
In other cases, they fail to name their guardian if they become incapacitated. As a result, the state has to step in to handle their affairs. A custodianship is a costly legal process that is unnecessary if the plan was written correctly in the first place.
When to start planning
While it’s never too early to make your wishes official in writing, you are encouraged to begin estate planning at least by the time you retire. The more valuable your estate is, the more complex the plan needs to be. The first step is to decide which documents you need, whether it’s a trust, living will, or power of attorney.
The cost of planning for your future
Most people don’t want to consider becoming sick or injured and not being able to take care of themselves. They fail to plan effectively for future incapacity. As a result, when they can no longer make decisions independently, they may go through a series of court petitions, cases, and lawyers. Not planning for the unexpected is a serious financial mistake in the end.