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Planning for Disability

Expect the Unexpected

Would your family have sufficient resources if you couldn’t work because you were sick or injured? Could someone whom you trust take charge of your investments and pay your bills without the involvement of the Probate Court? If you have a business partner, what effect would his disability have on you?

The statutory disability plan?

Everyone has an estate plan. If they haven’t created one, the state has made one for them. Everyone also has a disability plan. If you are unable to take care of yourself or your financial affairs, and have not planned in advance, the Probate Court will appoint a “conservator” for you. A conservatorship is an invasion of your privacy. Additionally, a conservator may not be able to take care of all of your needs. You should try to avoid needing a conservator.

Durable powers of attorney

Until the 1970s, if you gave someone a power of attorney and became incompetent, the power became void. Today, almost all powers of attorney are “durable.” They provide that the agent may continue to act, even if the person giving him the power is incapacitated.

If you really trust someone, you can give him or her a general power of attorney. This would allow him or her to pay your bills, manage your investments, and make almost all other financial decisions that you could.

It cannot be emphasized enough that you should only give powers of attorney to highly trusted people. Abuse of powers by children, caregivers and others is a national epidemic.

Revocable trusts

If you create a revocable trust, your assets will continue to be managed by your chosen trustee if you become disabled. Trusts are more flexible than powers of attorney. However, they are also significantly more expensive. If your sole reason for creating a trust is to manage your assets in case you’re disabled, you might want to use a power of attorney instead. Trusts are not for everyone. So called “Living Trusts,” are probably the most oversold estate planning technique there is. To read more about these trusts and to see if a trust is right for you, click here.

Advance health care directives

Suppose that you’ve had an accident or illness and are unable to communicate with health care providers. A Federal statute could prevent medical personnel from speaking with anyone except their patients. With a properly designed Advance Health Care Directive, you can express your treatment desires and designate representatives to carry them out. To read more about Advance Health Care Directives, click here.

Buy-Sell agreement

Are you a partner or shareholder in a business? What would happen if you or your partner couldn’t work for six months? A year? Forever? Business owners often have “by and sell agreements.” They generally provide that if one owner dies the other(s) will buy his or her interest in the business.

Does your buy-sell agreement cover disability? Does it deal with mental and emotional disability? Does it make a distinction between long term and short term disability? How long does a disabled owner’s salary and insurance coverage continue? Is there a mandatory sale after a specified period of disability? If so, is there adequate funding for the buyout.

Disability income and long term care insurance

We don’t sell insurance. We’re strictly a law firm. However, we ask our estate planning planning clients whether they have disability income and long term care policies. Estate planning is not just about death and taxes. It’s also about preserving what you earned.

Would your family be able to maintain their living standard if you couldn’t work? For how long? A properly structured disability income insurance policy could fill the gap.

People are anxious about paying for “nursing home care.” Most want to be “self pay” patients and don’t want to become dependent on Medicaid or other public programs. If you are concerned about paying for medical and nursing care, you should speak with an agent with experience in long term care policies who can tailor a plan that meets your needs.


Disablity can strike at any time. A fall on ice, an athletic injury or a sudden illness can turn a productive person into a dependent one almost instantly. Estate planning without considering the risk of disability is like driving a car with one flat tire. You need to have a jack and a spare in your trunk.