What happens if you become physically or mentally incapable of managing your own affairs? These are difficult discussions for families. Notwithstanding, it is far better to talk well in advance of need. It is not necessary to gather a lot of information before proceeding. What is necessary is that frank and open discussion occurs. Once desires are made known and financial circumstances are taken into account, it is important that a plan be implemented with the assistance of qualified advisers.

Issues to consider

1. Care costs and long-term care insurance: What happens if you need long-term care? Long-term care policies make sense for many people. They provide the greatest flexibility for care -- in home or at a care campus. Policies can be purchased individually or sometimes through employment. Don't assume long-term care policies are too expensive. Research indicates that with the rapidly rising cost of care, they are often cost effective.

Medi-Cal is a federal/state public benefit program available to assist with long-term care costs. While helpful to many, the choices for care are more limited.

2. Estate planning: Implementation of appropriate estate planning documents (Revocable Living Trust, Financial Durable Power of Attorney, Advance Health Care Directive), including language covering incapacity, is essential. It is often stated that the reason one should consider a trust is to avoid probate. In practice, the more important issue is planning for incapacity. Every document must contain appropriate language to carry out your "quality of life" choices, giving appropriate options for management of your estate and health care planning in accordance with your stated desires. Individual circumstance -- single, married or domestic partner -- must be considered.

3. Second marriages: Another issue that has a significant impact on payment for long-term care costs is whether or not this is a second marriage. It is extremely important that the risk of health care costs be managed; that the risk is allocated in accordance with the wishes of the two parties. Prenuptial or marital agreements are key in the management of this risk -- to speak for the individuals and clearly state their intentions regarding care, gifting, spousal support and inheritance rights.

4. Care managers and financial agents: Your choice of persons to manage your personal care (making living arrangements, hiring caregivers, etc.) and financial and business affairs is the most important decision you will make. Again, these decisions should be made well in advance of need. Whether dealing with the personal care management side of long-term care planning or financial management, your selected agents should be paid for the services you expect them to provide. These agents undertake significant fiduciary responsibility and they should be compensated for the professional services you expect them to provide for your benefit. Care managers and agents may by capable, trusted family members or friends, or professional fiduciaries.

5. Qualified advisers: After having this discussion regarding incapacity and long-term care, you should seek the advice and counsel of appropriate, qualified professionals who can assist in the implementation of your desires. As with the discussion of issues, planning should be a team effort -- with experienced insurance and financial advisers as well as a qualified attorney. People often look at estate planning documents as a commodity to be purchased. They are not. Your documents should be crafted specifically to your needs, after appropriate legal and financial counsel. Every situation is different and you should expect that your specific needs and desires will be part of your documents.

6. A second discussion with nominated agents: Having talked to family members, created and implemented a plan, it is extremely important that you have a second discussion specifically with the person you have nominated to carry out your desires. Your "successor in decision making" should have a clear understanding of what your documents allow and what his/her responsibilities will be.

Your agent should know who your financial and legal advisers are, where you keep your important papers, and should have all of your necessary vital statistics.

Finally, your plan must be regularly reviewed. Don't let more than three to four years go by before you sit down again with all of your advisers to discuss your personal circumstances, changes in your financial situation and changes in the law. Careful "care and feeding" of your estate plan will ensure that your desires will be implemented. In this way you set the standard and expectation that your quality of life will be maintained.

Ewin is a California State Bar Certified Specialist in Estate Planning, Trust, Probate law, and a member of the National Academy of Elder Law Attorneys and WealthCounsel.