For most adults, the prospect of being unable to make your own decisions is not something we want to consider. While this is understandable, incapacitation planning is still a crucial part of the estate planning process. Planning for the possibility of severe illness is important regardless of your age, health, or financial circumstances.

A power of attorney is an estate planning tool that lets you choose another individual to make decisions on your behalf should you become incapacitated. In this blog, we will answer some of the most common questions people have about powers of attorney in Illinois.

What Does a Power of Attorney Agent Do?

The power of attorney agent, or “attorney-in-fact,” has the authority to make decisions about your personal affairs if you are too sick to do so yourself. A power of attorney for healthcare permits the agent to make medical decisions on your behalf, such as whether you will undergo surgery or receive certain medications or medical treatments. A power of attorney for property, or financial power of attorney, allows the agent to manage your financial affairs.

Many people assume that estate planning only deals with the distribution of assets after an individual’s death. However, testamentary planning is only part of the estate planning process. It is also essential to plan for the possibility of becoming incapacitated by illness or injury. If you became terminally ill and could not express your wishes regarding medical care, what types of care would you want? Do you want doctors to try everything to keep you alive as long as possible or would you prefer not to be placed on mechanical ventilation or to receive CPR?

These are extremely personal decisions, and it is important to document them in a legally recognized way. This is where incapacity planning comes into the picture.

Use a Living Will to Describe the Medical Treatment You Want and Do Not Want

A living will allows you to express your wishes regarding the medical care you would potentially receive if you become incapacitated due to illness or injury. Most people have deeply held beliefs about end-of-life care. Your desires regarding incapacitation care may be influenced by your life circumstances, past medical history, your family, and your religious and spiritual beliefs.

Anyone can find themselves facing bankruptcy. Whether caused by job loss, medical bills, an unmanageable mortgage, or other reasons, bankruptcy can be a difficult and stressful experience. For those facing Chapter 7 bankruptcy, the prospect of liquidation of assets can be foreboding. However, some assets are exempt from liquidation during this process. Certain items cannot be touched by creditors or the court-appointed trustee who will oversee the liquidation process.

Exemptions During Liquidation Bankruptcy

Many people hesitate to even consider bankruptcy because they assume that they will lose all of their possessions. Chapter 7 bankruptcy is often called "liquidation bankruptcy" because certain assets must be sold in order to raise money for creditors. However, those filing for Chapter 7 bankruptcy in Illinois may be eligible for exemptions that will protect certain assets from liquidation.

The following are a few of the more common types of property exempt from liquidation during Chapter 7 Bankruptcy in Illinois:

If you are evaluating your estate planning options, you may have several questions about the advantages and disadvantages of various estate planning instruments. Trusts are popular options for passing assets to heirs in an estate plan. However, there are many different types of trusts, and the type of trust you choose will depend on your individual circumstances and goals. The two main categories of trusts are revocable and irrevocable trusts.

Benefits of a Revocable Trust

Revocable trusts, sometimes referred to as "living trusts" can be modified or revoked by the trust creator during his or her lifetime. This type of trust provides flexibility for those who may want to make changes to their estate plan over time. The revocable trust can also help avoid probate, as assets placed in the trust do not have to go through the court process when they are passed on to heirs.

Benefits of an Irrevocable Trust

An irrevocable trust is permanent and cannot be modified or revoked by the trust creator once it is established. This type of trust can provide tax advantages, as assets placed in an irrevocable trust are generally not subject to estate or gift taxes. Irrevocable trusts can also protect assets from creditors, as once they are placed in the trust, the creator no longer has control over them and cannot transfer them to creditors. Assets placed in an irrevocable trust are owned by the trust, not the person who created the trust. This can be useful for those who wish to pass assets on to heirs without the risk of those assets being seized during a lawsuit or by creditors. Irrevocable trusts are also sometimes used to provide funds to a disabled adult without reducing his or her ability to receive government benefits.

Bankruptcy can be a wonderful tool for escaping insurmountable debt, slowly righting your credit score, and stopping a barrage of collections efforts. However, it is important to enter the process of filing for bankruptcy with a clear and complete understanding of the effects these proceedings will have on your life, both in the short and long term. An inventory of assets should be taken, and a careful analysis to determine which form of bankruptcy would best serve your current interests conducted. These analyses are best conducted by a knowledgeable attorney who is aware of all relevant factors and can provide you with advice suited to your unique situation. Bankruptcy is not to be undertaken lightly.

Depending on the form of bankruptcy you choose, it could continue to impact your monthly budget for years to come. Debt relief through bankruptcy can be had, but the process should be supervised by a skilled attorney. 

What You Should Know Before Initiating Bankruptcy Proceedings

It is important to perform an honest assessment of how bankruptcy may affect you as compared to continuing as you are. Questions to ask include: