How to Choose the Right Helpers for Your Incapacity Plan

Estate planning is more than just planning for what happens after you die. It is just as important to plan for what happens if you become unable to manage your own financial or medical affairs while you are alive.

What happens without an incapacity plan?
Without a comprehensive incapacity plan, if you become incapacitated and unable to manage your own affairs, a judge will need to appoint someone to take control of your assets, known as a conservator in Michigan, and someone to make all personal and medical decisions for you, known as a guardian in Michigan, under court-supervised proceedings. The guardian and conservator may be the same person, or there may be two different people appointed to these roles. According to state law, the guardian and conservator will be required to report to the court on a periodic basis. Certain actions of the guardian and conservator may require court approval. The court-supervised guardianship and conservatorship are effective until you either regain the ability to make your own decisions or you pass away. 

Who should you choose as your financial agent and healthcare agent?
Guardianship and conservatorship statutes are the state’s default plan for appointing the person or people who will make decisions for you if you cannot make them for yourself. This default plan, however, may not align with the plan you would have put into place on your own. Most importantly, state statutes may give priority to someone to act as your guardian or conservator who is not the person you would have selected had you planned proactively.

Rather than having a judge appoint these important decision-makers for you, your incapacity plan allows you to choose the trusted individuals you want to carry out your wishes. There are two very important decisions you must make when putting together your incapacity plan:

  1. Who will be in charge of managing your finances if you become incapacitated (your financial agent)?
  2. Who will be in charge of making medical decisions on your behalf if you become incapacitated (your healthcare agent)?

The following factors should be considered when deciding who to name as your financial agent and healthcare agent:

  • Where does the agent live? With modern technology, the distance between you and your agent may not matter. Nonetheless, someone who lives nearby may be a better choice than someone who lives in another state or country, especially for healthcare decisions.
  • How organized is the agent? Your helper will need to be well-organized to manage your healthcare needs, keep track of your accounts and property, pay your bills, and balance your checkbook, all on top of managing their own finances and family obligations. While you may trust many of your loved ones to act on your behalf, not all of them will have the capabilities and organizational skills desired for this position.
  • How busy is the agent? If the helper you are considering has a demanding job or travels frequently for work, then they may not have the time required to take care of your finances and medical needs.
  • Does the agent have expertise in managing finances or the healthcare field? An agent with work experience in finance or medicine may be a better choice than an agent without it, but ultimately, you want to choose someone you know and trust and are confident will act for you as you would wish. You do not have to choose the same helper for both roles. You may have one who you feel would be great at financial matters and another who would be better suited for helping with healthcare matters.

What should you do?
If you do not proactively plan for incapacity before you become incapacitated, your loved ones will likely have to go to probate court to have a guardian and conservator appointed. Court proceedings would only add to an already stressful and emotional time, while also increasing costs and time involved.

Part of creating an effective incapacity plan means carefully considering who you want as your financial and medical agents. You should also discuss your choice with the person you select to confirm that they are willing and able to serve. Also discuss with them your wishes as to the medical and financial issues that are most important to you.

Give us call and let us help. We are ready to answer your questions about incapacity planning and assist you with choosing the right agents for your plan.