There are basically three types of legal documents necessary to plan for mental disability: Advance Medical Directives, including Living Wills, Powers of Attorney, and Revocable Living Trusts. Each of these documents must be signed in accordance with the laws of your state (usually in front of two disinterested witnesses) and while you're fully competent to understand what you're signing.
1. Advance Medical Directives, Including Living Wills
An Advance Medical Directive
is a legal document that allows you to appoint an agent to make health care decisions for you if you're unable to make these decisions for yourself. It may also include a Living Will
, which is a legal document that allows you to specify the type of treatment you want to receive if you're suffering from a terminal condition or in a persistent vegetative state. You should also name of backup agent in case the first person you name isn't able to serve as your agent. If you don't have an Advance Medical Directive, then your loved ones will end up in court fighting over what medical treatment you should or shouldn't receive, and the court will appoint a Guardian of the Person to oversee your medical care.
2. Financial Powers of Attorney
A Power of Attorney
is a legal document that allows you to appoint an agent, called your "attorney in fact," to act on your behalf to manage your finances. The Power of Attorney can be durable
, meaning that your attorney in fact can act immediately, or it can be springing
, meaning that your attorney in fact can only act after you've been declared mentally incapacitated. With either type of document, you should also name a backup attorney in fact in case the first person you name isn't able to serve. If you don't have any type of Power of Attorney, then your assets will end up in a court-supervised guardianship or conservatorship and the court will appoint a Guardian or Conservator of the Property to manage, invest, and spend your assets.
3. Revocable Living Trusts
A Revocable Living Trust
is a legal document that covers all aspects of your financial life, from while you're alive and well, to if you become mentally incompetent, to after you die. If you fund your trust and later become mentally incapacitated, then the trust will specify a Disability Trustee who will be able to manage and invest your assets on your behalf. It will also allow the Disability Trustee to spend the trust assets to take care of you and your family. If you don't have a Power of Attorney and fully funded Revocable Living Trust, then your assets will end up in a court-supervised guardianship or conservatorship and the court will appoint a Guardian or Conservator of the Property to manage, invest, and spend your assets.