A single tear falls from his cheek as he struggles to find the word. A missed mortgage payment, a transposed number, a forgotten appointment, silent confusion. Is it a sign of decreasing competency or typical age-related changes? We are independent and stubborn creatures by nature, born knowing what is best for us and hesitant to put someone else in control. Out of fear, we often ignore the warning signs and cover up cognitive impairments. It is that denial and
secrecy that makes it difficult to determine if and when an individual can no longer manage their daily responsibilities.
Incapacity is never black and white. It is a slippery slope fraught with emotion. We live in fear of losing our freedom, and those around us wonder if this is the new “norm,” or if they’re simply jumping to conclusions. By definition, an incapacitated individual “is impaired by reason of mental illness, mental deficiency, physical illness or disability, chronic use of drugs, chronic intoxication, or other cause, not including minority, to the extent of lacking sufficient understanding or capacity to make or communicate informed decisions.” MCL 700.1105(a) A well-crafted legal definition that unfortunately translates poorly into real life.
None of us are equipped to evaluate someone’s mental competency, but if we don’t, who is? Who is protecting us from ourselves? Unfortunately, it often takes a significant financial loss before a cognitive deficiency is discovered. Having the right tools in place can not only avoid court involvement, but protect us from being vulnerable to financial exploitation. As with many things in life, advance planning is key. In fact, estate planning is much more than directing distribution of your assets once you are gone. Instead, a well-crafted estate plan should also provide direction and protection while you are living.
- Financial Durable Power of Attorney. An invaluable document that gives us the power to decide who we want acting on our behalf to make financial and business related decisions. All too often we take for granted the day-to-day transactions we are able conduct, but what happens when we are no longer able to do so? Or, who is ensuring that the transactions we conduct are in our best interest? A comprehensive Durable Power of Attorney will incorporate provisions to control how and when our incapacity is triggered, and who will step in when necessary. By defining incapacity, the steps needed to prove it, and appointing the individual to fulfill that role, the Durable Power of Attorney serves as a roadmap for determining incapacity without judicial intervention.
- Durable Power of Attorney for Healthcare. Much like the Financial Durable Power of Attorney, the Durable Power of Attorney for Healthcare ensures that we not only choose who we want making decisions related to our healthcare, but that we are also able to communicate our specific wishes with respect to life-sustaining treatment and end of life care. Healthcare related decisions are not only delicate, they are extremely personal; so it is imperative that we know and trust who will be making those decisions when we are no longer able. A carefully drafted Durable Power of Attorney for Healthcare not only allows us to empower our Patient Advocate with the authority to carry out our wishes, it again avoids the complexity of court involvement.
- Revocable Living Trust. If a Trust is an element of your estate plan, it is critical that your Trust document also anticipates your incapacity. By nature, estate planning documents are designed to ease the burden on your family and friends, therefore your Trust should not only address appointment of key individuals and direct administration of your assets upon your death; it needs to include a mechanism for determining and managing future cognitive issues. Particularly, it should provide provisions to elect certain individuals
who can trigger evaluation by a licensed physician to certify incapacity, protect you from exercising certain powers upon determination of your incapacity, and give them authority to use the financial resources necessary to pay for your care.
It will always be a delicate balance between respecting an individual’s independence and protecting that individual from financial vulnerabilities. However, it is no longer about losing control, it’s about keeping it. The first step in maintaining that control is to ensure you have a properly drafted estate plan in place that clearly defines, anticipates and prepares for a cognitive impairment. Whether you executed your documents five years ago, you are appointed in a friend or family member’s documents, or you are a trusted advisor to individuals with diminishing capacity; you should frequently review those documents to ensure you understand how and when incapacity will be triggered. For some, incapacity may be a slow, gradual decline. For others, it will happen unexpectedly. While we may not have control over when we will be affected by incapacity, we can control how our personal and financial affairs will be managed and who we want managing our affairs when we are no longer able to.