There are two legal documents for managing finances that need to be in place before an incapacitating event ever happens:
Financial Power of Attorney
This legal document gives your agent the authority to pay bills, make financial decisions, manage investments, file tax returns, mortgage and sell real estate, and address other financial matters.
There are two types of financial powers of attorney: (1) durable, (2) springing. A durable power of attorney goes into effect as soon as it is signed, while a springing power of attorney only goes into effect after you have been determined to be mentally incapacitated.
Revocable Living Trust
This legal document has three parties to it: The creator who creates the trust, the person who manages the assets transferred into the trust (the Trustee), and the person who benefits from the assets transferred into the trust (the Beneficiary). In the typical revocable living trust situation you will be the creator, the Trustee, and the Beneficiary of your own trust. However, if you become incapacitated, then your Successor Trustee will step in and manage the trust assets for your benefit.
Your Revocable Living Trust should contain provisions to determine your mental status through a private process (such as a disability panel, the opinion of an attending physician, the opinion of two physicians, or some other method) instead of a public court process. In addition, the trust agreement should contain specific instructions about how to take care of you if you are declared mentally incapacitated.
If you have questions about planning for incapacity, please contact my office.