Incapacity Planning

What Actually Is Incapacity Planning?

Incapacity planning is, essentially, a plan that goes into effect when a person lacks the legal capacity to take care of themselves. This typically anticipates a mental incapacity, but obviously it can be broader and cover physical incapacity as well. For example, if the person is in a coma or otherwise unable to make decisions or to manage their own affairs, an incapacity plan may come into play.

When Should Someone Create An Incapacity Plan?

Most people only need a very basic plan to prepare for incapacity. However, these plans are particularly important for those who might be facing more immediate risk of incapacity, like people who’ve been recently diagnosed with a long-term illness or dementia that might cause a foreseeable risk. A diagnosis of that nature makes incapacity planning fairly urgent, but really everyone should have something together just in case.

What Does A Solid Incapacity Plan Take Into Account?

It takes into account a few factors. One factor to consider is who will be in charge of managing which assets on behalf of the person who is legally incapacitated. So for example, if they own property, we might want to have some document that allows another person to manage that property. The plan can also include bank accounts, investment accounts, and the management of any companies or businesses that the person planning for potential incapacity may be running, and have a game plan for those. Also, depending on if the person is working, we want to talk about getting some sort of insurance into place to make sure that their income is being replaced while they’re incapacitated as well.

What Details Should I Discuss With My Attorney When Doing Incapacity Planning?

I would make sure to talk about all the ways in which you bring in and use money and manage assets. So it’s going to be a more holistic analysis of what you have, how you use it, and how it’s managed. The goal is going to be essentially to replace you with someone who is just like you and continues your values, and will make sure everything is protected.

Can Someone Have More Than One Person With Power Of Attorney In An Incapacity Plan?

A typical power of attorney is going to be the kind of person you trust with your money. So for a married couple, it’s often pretty straightforward that a spouse would step into that role, while an older person might designate a child or children. Under Georgia law, you can have multiple people serving as your agent using a power of attorney. I typically don’t recommend it unless all those people are on the same page and there’s low risk of conflict. If for some reason a person doesn’t want a child, a parent, or a close friend to be a power of attorney, they might also look into bringing on a fiduciary, such as a professional in charge of their finances, or an attorney to manage finances for them if they’re incapacitated as well.

What Is The Difference Between A Power Of Attorney And A Guardianship?

Power of attorney is a document that’s made while the person is fully mentally capable, where they can designate someone to manage their affairs and assets financially. Assuming that a person didn’t sign a power of attorney or for some reason have progressed to a point where for the foreseeable future, they’re incapacitated, then a Georgia probate court can appoint a guardian and a conservator to manage the assets of a person. A guardian essentially manages the actual person and the conservatorship manages their money. A power of attorney document can nominate a person to be a conservator in case court supervision is needed. That’s another advantage of getting a power of attorney signed early – so they can designate that person rather than the court doing so.

The court will look at a number of factors to determine who the guardian and conservator should be. However, it’s a lot more intensive and it does require court reporting and a lot stricter supervision.

What Could Be The Role Of A Trust In Incapacity Planning?

A trust is one of the more powerful tools in incapacity planning. So even with a more basic revocable living trust, a person can transfer the bulk of their assets into it while they’re mentally capable. Then, upon the setting of incapacity as determined by a number of physicians, the trust language would allow a successor trustee to step in and to manage the assets held in trust. That allows you to avoid a lot of issues related to the power of attorney, such as banks not accepting it or anything along those lines, and allows the trustee to seamlessly manage the property for the benefit of the person who created the trust.

If the condition of that person improves, they will get back the power to be trustee and if that person either declines or passes from this life, then the assets are already in the trust and will then be distributed according to the terms of the trust.

What Is A Living Will?

A living will in Georgia is called an “advance directive for healthcare.” It’s a document that allows you to designate a person who can make healthcare decisions for you if you’re incapacitated. You can also explicitly state what those wishes are. So if someone wants to receive life support or other treatments, they’ll designate that in there. If they don’t, you’ll designate that in there as well. So it gives you kind of the ability to manage your health even when you’re not able to directly do so in the moment.

Do You Typically Recommend That People Set Up a Living Will?

Yes, I recommend that people set up a living will. It’s one of the more important documents as far as making sure that your body is respected and your wishes for your body come to pass. It’s also helps the family a lot. If someone’s ever incapacitated, and they’re in a coma or something like that, it removes any doubt from the family as to what that person would have wanted done. It removes the guilt from continuing or terminating treatment if that’s what the person wanted. So we find it very helpful in that regard. It also clears up a lot of ambiguities as far as whether they want a burial or cremation, what kind of care they would like, and who they trust to make those final decisions. It ensures that no one is quavering at the doctor’s office over these issues, or fighting over those issues after the fact.

Can I Make Changes For My Living Will?

Yes, you can make changes to your living will. In fact, you can make as many changes as you’d like. In Georgia, it doesn’t have to be notarized, as long as you have two witnesses who aren’t the healthcare agent.

What Happens If Someone Becomes Incapacitated Before Setting Up An Incapacity Plan?

In that case, what would happen is that Georgia law tends to defer to the closest family members. If there is no power of attorney or trust in place, and the accounts are not joint, the court would likely have to appoint a conservator to manage that person’s financial and real estate assets and then appoint a guardian to manage that person. It’s a pretty lengthy process. It could take several months, especially if there is a squabble among who should serve as a guardian/conservator. In the meantime, a lot of major decisions aren’t really getting made for the incapacitated individual.

Do A Lot Of People Fail To Set Up Incapacity Plans?

Incapacity planning often doesn’t carry the same urgency as other types of life planning. When people come in to do their estate plan, incapacity planning comes with it. But for people who haven’t done their estate planning and haven’t made any progress towards incapacity planning, that’s continually easy for them to put off. It’s our job as attorneys to emphasize the importance of these plans and to make executing them as accessible as possible.

How Does Incapacity Planning Make Things Easier For Me And My Family?

Having an incapacity plan in place makes things a lot easier in the sense that it removes any doubts as to what should happen if you were to become incapacitated. If someone’s incapacitated, the designated person can look at the documents, powers of attorney, health directives, trusts etc., to see exactly what is supposed to happen with the incapacitated person’s money, healthcare, and income. They can also easily see what tools they have as far as how to make that management as efficient and cost effective as possible. Having a plan is not as good as having the actual person there and capable, but it’s the next best thing.

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