Critter Corner: When Should I Make Changes to My Incapacity Plan?

Dear Ribbit,

I saw the unthinkable happen to a friend of mine in college, and like most college students, he didn’t have incapacity planning in place. I saw it as a sign and got my own planning in order. Now that I graduated, I am wondering– is an incapacity plan something that stays the same over time, or should I be making changes to it? Under what instances do people make changes to incapacity plans?

Thanks!

Megan Chainges

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Dear Megan,

The incapacity plan you create during college will probably be different than the one you would want to have in place after you graduate, get married, have a child, or learn that you have a chronic illness. Similar to other financial and estate planning tools, incapacity plans need to change and adapt to you over time.

Here are some instances where you should consider making changes to your incapacity plan:

• Change in Relationship Status. If you get married, go through a divorce, or enter into a romantic relationship, you’ll want to make sure your incapacity plan reflects that. For example, let’s say you get divorced and enter into a new relationship with someone else. Your old plan likely includes your former spouse as part of it. Whether you want to name another family member or your new partner as your representative, you’ll need to change your plan.
• Having a Child. Having a child changes you, often in ways you cannot expect. When you consider your child’s future, you must consider the possibility that you will not be there to be a caregiver, provider, or parent. Your incapacity and estate plan needs to address what you want to happen if you lose your ability to raise or care for your child. Choosing and naming a temporary guardian, ensuring someone has the ability to use your funds to pay for child care needs, and ensuring your child is cared for and educated in a way that you approve will require some careful planning.
• Starting a Business. A business has its own set of demands, and if you’re the person in charge, your business will suffer if you lose capacity. Business owners need to develop incapacity planning tools that not only protect their interests, but also the interests of the business. You’ll need to be prepared to transfer your duties to someone who can manage them responsibly.
• Becoming Injured or Ill. Anytime you suffer a significant injury or learn you have a serious illness, you’ll want to review your incapacity plan to make sure it accurately reflects your health care needs. You may also want to make different choices about what kind of health care you wish to accept or refuse, especially if you have a terminal illness.
• Time and Aging. As you get older, your medical and personal circumstances can change without warning. Many age-related changes are inconsequential, but if it’s been several years since you last updated your incapacity plan, you need to go back and look things over. Also, because laws can change, you will want to make it a point to keep your incapacity planning updated on a regular basis, at least every 5 years.
• Anytime You Change Your Mind. You need to be sure your plan reflects your current needs, desires, and choices. If, for example, you feel more comfortable naming your sibling as your medical representative over your spouse, you should have a plan that reflects this desire. Similarly, if you ever change your mind, you need to change your plan.

Keeping your incapacity plan up to date will give you the opportunity to think about what is most important to you throughout your life, and how you can best protect not only yourself, but those closest to you.

Have an estate plan in place? Not sure when to update it? Click here for details.

Hop this helps!

Ribbit