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016 Insurance Against the Risk of Incapacity

016 Insurance Against the Risk of Incapacity

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 Why Powers of Attorney are the Most Overlooked Forms of Protection Download Your Free Book: https://tinyurl.com/monahan-estate-book 🎧 Listen on Apple Podcasts | Spotify When most people think about estate planning, they think about what happens after death.But what if the real crisis isn’t after you’re gone — it’s while you’re still alive, and unable to make decisions for yourself? That’s the situation we talked about in this week’s episode: the risk of incapacity. The Risk No One Expects “Incapacity” means losing the legal ability to make your own decisions — from dementia, Alzheimer’s, a stroke, or a sudden accident. It’s not guaranteed to happen, but if it does, everything changes overnight.Bills still need to be paid. Medical decisions still need to be made. But suddenly, you can’t make them. And here’s what surprises almost everyone:even your spouse doesn’t automatically have the legal right to step in. Banks, hospitals, and insurance companies don’t recognize “automatic spousal authority.”Without a Power of Attorney, your husband, wife, or partner has no more legal authority than a stranger.Their only option is to go to court for what’s called guardianship — a slow, expensive, and public process. Guardianship: The Court Process Everyone Wants to Avoid When families end up in guardianship court, it’s rarely because they’ve done something wrong.It’s usually because they didn’t know any better. To get authority, your loved ones have to: File a petition in court Get doctors to certify incapacity Wait for a hearing before a judge And sometimes, even fight off relatives who think they should be in charge Meanwhile, bills pile up. Decisions are delayed.And the person who should be helping you is tied up in red tape. The Simple Way to Avoid It A Power of Attorney avoids all of that. It’s a simple document you sign while you still have capacity — naming someone you trust to act for you if you can’t.There are two kinds: Power of Attorney for Property — handles finances, bills, and accounts Power of Attorney for Health Care — makes medical decisions on your behalf Together, they replace the need for a court-appointed guardian.Your chosen agent can act immediately, without waiting for a judge’s permission. That’s why I sometimes say: powers of attorney are the most overlooked form of insurance. The “Insurance” You Hope You Never Need Most people buy car or homeowners insurance “just in case.”You don’t expect to crash your car or have a fire.But you know that if it happens, the cost of being unprepared is enormous. It’s the same with incapacity.You may never face it — but if you do, the consequences are devastating.A Power of Attorney is your family’s protection policy against chaos. Two Families, Two Outcomes Let me give you an example. Jim and Sue did their planning.They signed wills and gave each other powers of attorney.When Jim was injured in an accident and needed emergency surgery, Sue could act right away — no confusion, no delay, no court. Bill and Edna, on the other hand, kept putting it off.When Edna suffered a stroke, Bill discovered he had no legal authority to act.He had to go through guardianship court just to pay her bills. It was slow, costly, and heartbreaking. Same event. Same risk.But two very different outcomes — all because one couple planned ahead. The Takeaway Estate planning isn’t just about what happens after you’re gone.It’s also about protecting the people you love while you’re still here. A Power of Attorney is your insurance against the risk of incapacity — a small step now that spares your family from crisis later. If you already have one, take a moment to review it.If you don’t, now is the perfect time to put it in place. Let’s start the conversation.is a great time to review it. If you don’t, let’s start the conversation. Contact me right away.
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