Planning for incapacity is part of an estate plan and like many things in life, planning in advance is better for both the individual and their family. A recent article, “Guardianship—What is sufficient incapacity?” from Pauls Valley Democrat, explains the basics concerning guardianship.

When an estate plan has been properly prepared, it includes a Power of Attorney created to give another person, known as the agent (representing the incapacitated person), the ability to make financial and legal decisions for an incapacitated person. A POA may be general, allowing for everything from managing investment accounts and paying bills to selling the incapacitated person’s home. However, an estate planning attorney can create a customized POA to give specific permissions for what the agent can and cannot do.

A guardianship requires going to court and having a formal proceeding to determine whether or not a person is incapacitated. While there are some minor differences from state to state, generally speaking, a person is deemed incapacitated if they are age 18 or older and impaired because of mental illness, physical illness, or disability, intellectual or developmental disability, or drug or alcohol dependency.

The court reviews the person’s ability to maintain their own health, safety and financial resources.

If a POA has been created and executed, another person will be able to manage the incapacitated person’s financial matters. However, a POA does not address health care and safety issues.

The interested party requesting to be appointed guardian does not have to be a spouse or blood relative. This is one of many reasons why an estate planning attorney should be consulted long before a guardianship becomes absolutely necessary. A family member is almost always preferable to being named a guardian.

Evidence for the court proceeding includes professional opinions of doctors, psychologists, or administrative bodies to demonstrate the person’s lack of capacity. In some instances, the court may conduct an investigation of its own, relying on medical experts.

The person selected to provide an expert opinion should be matched to the reasons for the person’s incapacity. A geriatric specialist should evaluate an elderly person; financial capability should be assessed by someone who focuses on financial cognition, etc. The court reviews evidence to make its determination. In some cases, the experts making the evaluations are also called upon to provide a plan for the person.

A guardianship is very restrictive. If estate planning is done in advance, the family will be in a better position to help their loved one, determine their needs and act in their best interest without court intervention. Speak with an experienced estate planning attorney to plan for the future when more options may be available.

Reference: Pauls Valley Democrat (Nov. 8, 2024) “Guardianship—What is sufficient incapacity?”