LPL FinancialDaniel S. Foxen, JD,CPA,CLU,ChFC15 Spinning Wheel RoadSuite 129Hinsdale, IL 60521630-321-1700daniel.foxen@lpl.comwww.danfoxen.com

Planning for IncapacityWhat would happen if you were mentally or physicallyunable to take care of yourself or your day-to-dayaffairs? You might not be able to make sounddecisions about your health or finances. You couldlose the ability to pay bills, write checks, makedeposits, sell assets, or otherwise conduct youraffairs. Unless you're prepared, incapacity coulddevastate your family, exhaust your savings, andundermine your financial, tax, and estate planningstrategies. Planning ahead can ensure that yourhealth-care wishes will be carried out, and that yourfinances will continue to be competently managed.

It could happen to youIncapacity can strike anyone at any time. Advancingage can bring senility, Alzheimer's disease, or otherailments, and a serious illness or accident canhappen suddenly at any age. Even with today'smedical miracles, it's a real possibility that you or yourspouse could become incapable of handling your ownmedical or financial affairs.

What if you're not prepared?Should you become incapacitated without the properplans and documentation in place, a relative or friendwill have to ask the court to appoint a guardian foryou. Petitioning the court for guardianship is a publicprocedure that can be emotionally draining, timeconsuming, and expensive. More importantly, withoutinstructions from you, a guardian might not make thedecisions you would have made.

Advanced medical directivesWithout legal documents that express your wishes,medical care providers must prolong your life usingartificial means, if necessary. With today's moderntechnology, physicians can sustain you for days andweeks (if not months or even years). To avoid thepossibility of this happening to you, you must have anadvanced medical directive.

There are three types of advanced medical directives:a living will, a durable power of attorney for healthcare (or health-care proxy), and a Do Not Resuscitateorder (DNR). Each type has its own purpose,benefits, and drawbacks, and may not be effective insome states. You may find that one, two, or all threetypes of advanced medical directives are necessaryto carry out all of your wishes for medical treatment.Be sure to have an attorney prepare your medicaldirectives to make sure that you have the ones you'llneed and that all documents are consistent.

Living willA living will allows you to approve or decline certaintypes of medical care, even if you will die as a resultof the choice. However, in most states, living willstake effect only under certain circumstances, such asterminal injury or illness. Generally, a living will can beused only to decline medical treatment that "servesonly to postpone the moment of death." Even if yourstate does not allow living wills, you may still want tohave one to serve as an expression of your wishes.

Durable power of attorney for healthcareA durable power of attorney for health care (known asa health-care proxy in some states) allows you toappoint a representative to make medical decisionsfor you. You decide how much power yourrepresentative will have.

Do Not Resuscitate order (DNR)A DNR is a doctor's order that tells all other medicalpersonnel not to perform CPR if you go into cardiacarrest. There are two types of DNRs. One is effectiveonly while you are hospitalized. The other is usedwhile you are outside the hospital.

Should you becomeincapacitated without theproper plans anddocumentation in place,a relative or friend willhave to ask the court toappoint a guardian foryou.

Page 1 of 2, see disclaimer on final page

Prepared by Broadridge Investor Communication Solutions, Inc. Copyright 2016

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for anyindividual. To determine which investment(s) may be appropriate for you, consult your financial advisor prior to investing. All performancereferenced is historical and is no guarantee of future results. All indices are unmanaged and cannot be invested into directly.

The information provided is not intended to be a substitute for specific individualized tax planning or legal advice. We suggest that you consultwith a qualified tax or legal advisor.

LPL Financial Representatives offer access to Trust Services through The Private Trust Company N.A., an affiliate of LPL Financial.

Protecting your propertyWithout someone to look after your financial affairswhen you can't, your property could be wasted,abused, or lost. To protect against these possibilities,consider putting in place a revocable living trust,durable power of attorney (DPOA), or joint ownershiparrangement (or a combination of any or all options).

Revocable living trustYou can transfer ownership of your property to arevocable living trust. You name yourself as trusteeand retain complete control over your affairs. If youbecome incapacitated, your successor trustee (theperson you named to run the trust if you can't)automatically steps in and takes over themanagement of your property. A living trust cansurvive your death. There are, of course, costsassociated with creating and maintaining a trust.

Durable power of attorney (DPOA)A DPOA allows you to authorize someone else to acton your behalf. There are two types of DPOA: animmediate DPOA, which is effective immediately, anda springing DPOA, which is not effective until youhave become incapacitated. Both types of DPOA endat your death.

A DPOA should be fairly simple and inexpensive toimplement. However, a springing DPOA is notpermitted in some states, so you'll want to check withan attorney.

Joint ownershipA joint ownership arrangement allows someone elseto have immediate access to property and to use it tomeet your needs. Joint ownership is simple andinexpensive to implement. However, there are somedisadvantages to the joint ownership arrangement.Some examples include: (1) your co-owner hasimmediate access to your property regardless ofincapacity, (2) you lack the ability to direct theco-owner to use the property for your benefit, (3)naming someone who is not your spouse as co-ownermay trigger gift tax consequences, and (4) if you diebefore the other joint owner, your property interestswill pass to the other owner without regard to yourown intentions, which may be different.

How is incapacity determined?Incapacity can be determined in one of two ways:

• Physician certification --You can include aprovision in a durable power of attorneydesignating one or more physicians who willmake the determination. Or, you can state thatyour incapacity will be determined by yourattending physician at the relevant time,whomever that might be.

• Judicial finding --The court may be petitionedto determine incapacity. After a proceedingwhere medical and other testimony will beheard, a judge will decide whether you areincapacitated according to the legal standardsin your state.

Without someone to lookafter your financial affairswhen you can't, yourproperty could bewasted, abused, or lost.

Page 2 of 2