Many people believe that estate planning is only about planning for their death. But planning for what happens after you die is only one piece of the estate-planning puzzle. It is just as important to plan for what happens if you become unable to manage your own financial or medical affairs while you are alive (in other words, if you become incapacitated). Let's discuss how to choose the right agents for your incapacity plan.
What happens without an incapacity plan?
Without a comprehensive incapacity plan, if you become incapacitated and unable to manage your own affairs, a judge will need to appoint someone to take control of your money and property (known as a conservator or guardian of the estate) and to make all personal and medical decisions for you (known as a guardian or guardian of the person) under court-supervised guardianship and conservatorship proceedings. The guardian and conservator may be the same person, or two different people may be appointed to these roles. Depending on state requirements, the conservator may have to report all financial transactions to the court annually or at least every few years. The conservator is also typically required to obtain court permission before entering into certain financial transactions (such as mortgaging or selling real estate). Similarly, the guardian may be required to obtain court permission before making life-sustaining or life-ending medical decisions. The court-supervised guardianship and conservatorship are effective until you either regain the ability to make your own decisions or you pass away.
Who should you choose as your financial agent and healthcare agent?
Guardianship and conservatorship statutes are the state’s default plan for appointing the person or people who will make decisions for you if you cannot make them for yourself. This default plan, however, may not align with the plan you would have put into place on your own. Most importantly, state statutes may prioritize someone to act as your guardian or conservator who is not the person you would have selected had you engaged in proactive planning.
Rather than having a judge appoint these important decision-makers, your incapacity plan allows you to appoint the right trusted agents you want to carry out your wishes. There are two critical decisions you must make when putting together your incapacity plan:
You should consider the following factors to help you choose the right incapacity plan agents to make financial and health care decisions on your behalf:
What should you do?
If you do not proactively plan for incapacity before you become incapacitated, your loved ones will likely have to go to probate court to have a guardian and conservator appointed. This would be a hassle, taking time and costing money during what is already likely to be a very stressful and emotional time.
Creating an effective incapacity plan means carefully considering who you want as your financial and medical agents. You should also discuss your choice with the person you select to confirm that they are willing and able to serve. This would also be an excellent opportunity to discuss with them your wishes as to the medical and financial issues that are most important to you.
I invite you to book a call. Our firm is ready to answer your questions about incapacity planning and assist you with choosing suitable agents for your plan.
(By Appointment Only)
14425 Falcon Head Blvd
Bldg E-100
Austin, TX 78738