Borderline Incapacity; A Family’s Greatest Estate Planning Threat

Ponder, for a moment, who is the winner in this kind of litigation?

A family not willing to plan for incapacity may later find itself hemorrhaging from substantial legal fees and litigation costs. I see nasty disputes arise when a family member becomes incapacitated, often the problem is Dad in his second marriage. I also remain steadfast with my belief that incapacity, especially borderline incapacity, is the greatest threat we all face in the context of our estate planning.

Here also is a difficult question. That is, who do we trust and who will we designate as the person or persons who will step into our shoes for overseeing our affairs and property if we become incapacitated?

These names (agents under a power of attorney, trustees, executor) must be trustworthy, self-starters, financially well-versed, and non-procrastinators. Using your own family members is fine. But, you still need to consider these characteristics.

Here are some other key comments:

The term “conservator” refers to an entity or individual appointed by a court to manage and oversee an incapacitated person’s property. By contrast, “guardian” is an individual appointed by the court to oversee an incapacitated person’s emotional and physical well-being, care, education, health, and welfare.

But, the goal is to have sufficient documents in place now (often revocable living trusts) for the care and oversight of your property to stave off getting a court involved in the event of your incapacity.

The lawyer assisting you with this defensive planning must know the relevant procedural, evidentiary, declaratory judgment, and other important court / litigation rules so as best to block a court from becoming the arbiter in determining your incapacity.

Absent the above planning, a Georgia court (my law office is in Atlanta) overseeing the fray as to a person’s possible incapacity is required to conduct a court proceeding (e.g, a trial) to determine whether incapacity exists. The litmus test is whether the person lacks sufficient capacity to make or communicate significant responsible decisions about the management of his or her property.

And, here is the kicker.

If the court concludes there is incapacity, the court is not bound to name a family member as the conservator or guardian of the incapacitated person. Instead, the court has the power to name any conservator or guardian the court concludes is in the best interest of the incapacitated person. This might end up being the local county administrator or some other entity or person completely outside the family circle.

Click here for an example of the following case about a court’s power to choose. This Georgia case is In re Hodgman, 269 Ga. App. 34, 602 S.E.2d 925 (2004), where the son, whose mother was found to be incapacitated by the court, lost in his effort to be named by the court as his mother’s conservator. The local county administrator was appointed by the court as the conservator. The son unsuccessfully argued that his having already been named as agent by his mother in her financial power of attorney and in her health care directive supported a conclusion that the court was bound to name the son as the conservator.

I have no personal knowledge of the following Georgia case that I include here as an example of what you hope to avoid. Click here for In re Copelan, 250 Ga. App. 856, 553 S.E.2d 278 (2001). This case illustrates what appears to have been a very expensive, time-consuming, painful ordeal for the family and for the mother who ultimately prevailed against her children seeking to have her deemed incapacitated. Note there was a jury trial at the superior court level that thther lost; she then successfully obtained a reversal of the jury verdict on appeal. My guess is the angst and legal fees for these family members were substantial.

Finally, the court in this Copelan opinion pointed out that one of the sons had left a voice-mail message with another sibling threatening their mother with “embarrassment” in the community and referring to a lawyer who was “chomping at the bit” to take the case.

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