Incapacity planning is important when you are serious about preparing yourself for all the eventualities of aging. It can seem as though it is unlikely that you will ever become unable to make sound decisions on your own, but the statistics tell a different tale.
According to the Alzheimer's Association one out of every eight individuals who has achieved senior citizen status will suffer from the disease. The possibility continues to rise as you get older with upwards of 40% of people who are 85 years of age being Alzheimer's sufferers.
People who suffer from Alzheimer's disease often find it impossible to make sound decisions due to Alzheimer's induced dementia. Of course, there are other causes of incapacity so this is something to take seriously.
Incapacity planning typically involves executing documents called durable powers of attorney. You must select an agent  which is referred to as your attorney-in-fact to make decisions on your behalf should you become unable to do so.
You may find that the person that you would like to see making your financial decisions differs from the individual who would be the health care decision-maker. Because this is the case you will find that there are two types of powers of attorney - the financial or property power of attorney and the health care power of attorney, which is also called an advance directive.

If you are one that likes to be prepared for life's eventualities then you should consider the possibility of mental incapacity.  According to the Alzheimer's Association 13% of senior citizens suffer from Alzheimer's disease, and this rises to about 40% among individuals who have reached the age of 85. Alzheimer's causes dementia among other things and people who are suffering from dementia can find themselves unable to make sound decisions.
To prepare yourself, you may want to consider creating a living trust with incapacity safeguards included.  In many cases the grantor will serve as the trustee while he or she is alive and fully capable of decision-making. However, you could also name a disability trustee who would administer the resources in the trust if the grantor and primary trustee was to become incapacitated.
In addition, durable powers of attorney are recommended as a way to empower people of your own choosing to make decisions in your behalf should you become unable to do so in the future due to incapacity.
If interested parties were to suspect that you have become incapable to manage your own affairs effectively they could petition the court to appoint a guardian to make decisions in your behalf.  This can be an expensive, time consuming and humiliating process.  This possibility can be avoided if you plan ahead intelligently.  The best way to do so is with the assistance of an experienced and licensed Reno estate planning attorney.