Planning for Incapacity

There are a few common misconceptions that the public generally holds when it comes to estate planning. One misconception we often hear is that estate planning is only important when you are elderly or wealthy. But this could not be further from the truth. Comprehensive estate planning is valuable for persons of all ages and means, and it goes further than just planning for death — it plans for incapacity during your lifetime as well.

One emergency that can arise during life is that of incapacity: an illness, injury, or other health-related situation that leaves somebody unable to engage in informed decision-making about their own health or their finances. When somebody becomes incapacitated, it can be extremely difficult to manage their finances on their behalf or instruct health treatment facilities about what to do because financial institutions and health treatment facilities have the obligations of maintaining confidentiality and protecting their clients’ and patients’ information.

To get around this issue, Michigan has default laws that provide for the appointment of guardians and conservators to protect the “ward’s”, or incapacitated person’s, interests. Guardians make healthcare, support, and maintenance decisions for the ward, and conservators make financial decisions for the ward.

Regardless of who the court appoints to serve as guardian or conservator, that individual is legally bound to look out for the ward’s best interests. However, there are default laws dictating who the court must prioritize in deciding who to appoint to these roles, and the person with priority is not always the person you may think is best for the job. Furthermore, guardianship and conservatorship proceedings are public court proceedings, and facts about the ward’s incapacity are placed on a public record, which diminishes privacy in an already sensitive and difficult time.

A good estate plan circumvents these undesirable defaults by establishing what are called a Power of Attorney and a Patient Advocate Designation. A Power of Attorney lets a person proactively designate who will manage their financial affairs once they become incapacitated, and a Patient Advocate Designation does the same with respect to medical decisions. These documents are wonderful because they allow you to choose who will care for you during periods of incapacity and what powers or limitations that person will have. Furthermore, they keep all of your sensitive information private. None of these advantages are built into a guardianship or conservatorship hearing.

If you would like to control who can make decisions on your behalf when you no longer can, consider hiring an attorney, such as myself, who can assist you in properly and legally drafting and executing a Power of Attorney and a Patient Advocate Designation as part of your estate plan.

Adam Kimball
Kimball & Wells, PLLC
Adam@kimballwells.com
(616) 317-8489