• Worley Elder Law

Why you should have an Incapacity Plan & how to choose the right people for your plan

Updated: Apr 29, 2018

A common misconception is that estate planning means planning for your death. While this is a component of a complete estate plan, a more pressing (and less discussed) issue is planning for incapacity. Incapacity can affect anyone. Illnesses such as Dementia or even a freak roller skating accident could cause incapacity which could be a temporary or permanent condition. Unless you plan now, incapacity could negatively impact your finances and place a heavy burden on your loved ones.


What Happens Without an Incapacity Plan?

Without a comprehensive incapacity plan, your family will have to hire an attorney and prove in court that you are incapacitated, whether temporary or permanent, and a judge will appoint a guardian to take control of your assets and make all personal and medical decisions for you under a court-supervised guardianship. The guardian must report all financial transactions to the court either on an annual basis or at least every few years. The guardian is also typically required to obtain court permission (which will cost additional court fees) before entering into certain types of financial transactions (such as mortgaging or selling your real estate), making life-sustaining or life-ending medical decisions, or even when trying to qualify you for government or state aid.



This process can be both expensive and time consuming for you, your loved ones, and your affairs. Planning now can prevent delays in treatment, managing financial transactions, or taking care of your family.


Who Should You Choose as Your Financial Agent and Health Care Agent?

As you can see from the above discussion, a guardian has an important and involved role if you become incapacitated.


Creating an incapacity plan can help you avoid a court-supervised guardianship.

Rather than having a judge decide, your incapacity plan will have you appoint one or more agents to carry out your wishes. There are two very important decisions you must make when putting together your plan:

  1. Who will be in charge of managing your finances if you become incapacitated (your financial Agent); and

  2. Who will be in charge of making medical decisions on your behalf if you become incapacitated (your Health Care Surrogate).

Factors to consider when deciding who to name as your Agent and Health Care Surrogate (who do not have to be the same people) include:


· Where does the individual live? With modern technology, the distance between you and your Agent or Surrogate should not matter. Nonetheless, someone who lives nearby may be a better choice than someone who lives in another state or country.

· How organized is the individual? The Agent or Surrogate will need to be well organized to manage your health care needs, keep track of your assets, pay your bills, and balance your checkbook, in addition to being able to manage their own finances and family obligations.

· How busy is the individual? If the Agent or Surrogate has a demanding job or travels frequently for work, then they may not have the time required to take care of your finances and medical needs.

· Does the individual have expertise in managing finances or the health care field? An Agent or Surrogate with work experience in finances or medicine may be a better choice than someone without it.


What Should You Do?

If you choose the wrong person to serve as your Agent or Health Care Surrogate, your incapacity plan could fail and land you and your assets in a court-supervised guardianship.


In order to create an incapacity plan that will work the way you expect it to work, you need to carefully consider who to choose as your Agent or Surrogate and then discuss your decision with that person to confirm that they will in fact be willing and able to serve.


While it is common to choose people close to you personally, not everyone has that option. In those cases, it may be worthwhile to consider a Professional Fiduciary or a Care Manager in your area. These are individuals who specialize in working with individuals and family members struggling with incapacity issues. Recommendations are available if needed.


Our firm is ready to answer your questions about incapacity planning and assist you with choosing the right agents for your plan. Send us a message to start the conversation today.


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