Incapacity Planning and Declaration of Guardianship
Incapacity planning is a very important and often overlooked strategy that ensures minimum disruption to healthcare and financial affairs in the event of sudden disability or incapacity. Many people think that incapacity or disability planning is only useful for the elderly or persons with prestigious financial responsibilities. However, each of us is vulnerable to accidents and disease. Preparing for such incidents in advance reduces both financial and emotional anguish in the future. Of particular importance for parents of minor children is the ability to name who should be given the resonsibility of raising your children in the event of your death or incapacity.
Our firm routinely prepares the Statutory Durable Power of Attorney, Medical Power of Attorney, Directive to Physicians (Living Wills), which address the fundamental needs of most clients to plan for incapacity.
If a client has minor children, it is critical that a client consider preparing a Declaration of Appointment of Guardian in the Event of My Death Or Incapacity, which document will allow him or her to name who should be responsible for raising your children and attending to their finances.
If a client anticipates an inevitable mental or physical decline and wishes to appoint a guardian for him or herself, clients often complete a Declaration of Guardian in the Event of Later Incapacity or Need of Guardian.
Incapacity Planning Tools:
Statutory Durable Power of Attorney
A Statutory Durable Power of Attorney assigns an agent to make financial or business decisions on behalf of the principal (the person signing the power of attorney). We can tailor the Statutory Durable Power of Attorney to be broad or very specific. A general Statutory Durable Power of Attorney grants the agent the same authority as the principal, while a limited Statutory Durable Power of Attorney authorizes only items outlined on the power of attorney itself. The Statutory Durable Power of Attorney may be made effective immediately or only when the principal becomes physically or mentally incapacitated.
A Statutory Durable Attorney in Action: For example, a married father of two is involved in a car accident and sustains head and back injuries leaving him confused, severely depressed and bedridden for several months. With Dad’s loss of income and medical bills adding up, Mom has to make some tough decisions. With a Statutory Durable Power of Attorney, effective upon disability, Mom could quickly liquidate a money market held in father's name, sell real property held in father's name or take other actions to make ends meet.
Even without tragic circumstances, married couples often find that designating each other as agents is a convenient way for one of them to take care of financial business without the other having to be present. In such cases, the Statutory Durable Power of Attorney becomes immediately effective.
One disadvantage of the Statutory Durable Power of Attorney is that banks and other financial institutions are hesitant to rely on them, especially when the power of attorney has been executed several years prior. Another downside to a power of attorney that has become effective upon a person’s disability or incapacity, is that the agent may be required to provide evidence of the disability or incapacitation. For these and other reasons, we may recommend a revocable trust as a companion or as an alternative to the Statutory Durable Power of Attorney. Revocable trusts are discussed at length under the “Revocable Trust or Living Trust” heading.
Directive to Physicians and Family or Surrogates (Living Will)
Another tool used to prepare for incapacity is the Directive to Physicians, also known as a Living Will. Living wills are widely used to instruct physicians as to the patient’s preference regarding treatment by artificial means of life support. A Directive to Physicians become effective only when the patient is unconscious or otherwise unable to communicate his or her wishes due to an incurable or irreversible medical condition. In short, a Directives to Physicians allows you to tell your family and doctors whether they should "pull the plug" or prolong your life using the life support technology.
By preparing a Directive, you are making your preferences about medical care known before you're faced with a serious injury or illness. This will spare your loved ones the stress of making decisions about your care while you are sick.
Directives to Physicians (Living Wills) should not be confused with an Out-of-Hospital Do Not Resuscitate (DNR) Order. An Out-of-Hospital DNR Order is a form completed by an individual person and his or her physician that allows the patient to refuse specific life-sustaining treatments outside of a hospital inpatient setting. An Out-of-Hospital DNR Order form or ID necklace or bracelet will tell health care providers, including emergency medical service personnel, not to use cardiopulmonary resuscitation (CPR) and other life-sustaining treatments.
Medical Power of Attorney
Similarly, a Medical Power of Attorney assigns and authorizes an agent to make medical decisions for the patient who is unconscious or mentally incapable of making medical decisions for him or herself. The Medical Power of Attorney does not address artificial life support (a patient addresses artificial life support in a Directive to Physicians). Rather, it is commonly used for patients with mentally debilitating conditions, such as Alzheimer’s or other mental dementia. In a Medical Power of Attorney, successor agents may be delegated or multiple agents may be appointed to make joint decisions on the patient’s behalf.
Declaration of Guardianship
If you become unable to care for your physical or financial health, anyone with knowledge of your situation may ask the appropriate Texas court to declare you incompetent and name one or more guardians to care for you. Clients who suffer from or expect to experience senility or general confusion may find comfort in naming those people whom the court should consider naming as his or her guardian. What's more such clients also may list those whom he or she would NOT like to serve as his or her guardian.
With a Declaration of Guardianship, you can name whom you would like to care for your physical, mental, and emotional well-being (referred to as the "guardian of the person") and whom you would like to care for your finances (referred to as the "guardian of the estate"). The roles of guardian of person and guardian of estate may be filled by the same person or by different people. |
