Not all adults have the capacity to make decisions regarding their personal lives and care or property and finances. State laws give courts the power to appoint guardians or conservators to make decisions for an incapacitated person, a "ward." However, the guardianship process is an extreme measure, and often a last resort. State laws also provide alternatives to guardianship. These measures include powers of attorney, trusts, representative payees and limited guardianship types.
Be familiar with the options, whether you're concerned about a friend or family member, or you're planning your future. Advance planning is worth the effort. Also keep in mind any adult may face incapacity, and it's not just an issue for the elderly.
Powers of Attorney
A power of attorney is when a person (the principal) gives another (the attorney-in-fact or agent) the power and right to make decisions and take action on the principal's behalf. State law governs the types, powers and duties available. Through a power of attorney, you can authorize your agent to act in health care, financial and business decisions. You can tailor one or more powers of attorney to fit your needs, including a durable power of attorney, which goes into effect only when you lose capacity.
Court action isn't needed to use a power of attorney, unlike a guardianship. Forms are readily available for a power of attorney. However, it's also a good idea to seek your lawyer's help so you get the exact documents you need. You want your plan to work as you intended if you lose the ability to act.
A "living trust" is a revocable trust you can set up during your life to control and manage your property and affairs. One major attraction of living trusts is disability planning. You can serve as trustee or co-trustee, but if you become incapacitated, your trust terms provide for a successor trustee, or your co-trustee serves alone. Once again, no court action is needed, there's a seamless transition and your privacy is maintained.
Protective Payee or Representative
A person can be named to manage benefits received by someone lacking capacity. The representative or protective payee handles benefit payments from state and federal public aid programs, Social Security, Railroad Retirement and the Veterans' Administration.
The role is similar to an attorney-in-fact, but powers are limited to handling benefits from a specific program.
Social Support Programs and Services
Don't forget support programs and services for someone who may not be fully incapacitated. Their needs may be met without turning to formal legal means. Lining up extra help such as bill paying services, financial counseling and in-home support can keep a person independent.
Your loved one may be reluctant to accepting help such as housekeeping, meal service or a health aide. Try to explain they may prefer accepting some help rather than lose control.
Guardianship can take many different forms. Conservatorship or guardianship of the estate is limited to managing a person's property and finances. It's a court proceeding, and it can be voluntary or involuntary. If you know or expect you'll need help, as the "conservatee," you can ask the court to appoint someone you nominate as your "conservator."
Think about being proactive when it comes to your future abilities and needs, or those of loved ones or family members. Most people don't want to lose control of their personal lives or property, and would rather have a say in what will happen to them should they lose the ability to speak and act for themselves.
Questions for Your Attorney
- My relative has a mental illness, but currently has good and bad days. Are estate planning options still available to him?
- Can I sign a document stating who I don't want appointed as my guardian if I need one?
- If I needed a temporary or emergency guardian more than once due to my mental illness, would that be a reason to challenge estate planning documents I sign when I'm well?