Supportive Decision Making: A Transitional Plan for Incapacity

Many families believe estate planning ends once documents are signed. In reality, the most difficult and important questions often arise later, when those documents need to authorize decision makers to act with the powers granted to them. This can occur when the plan creator begins to decline and the people named in the plan must decide when and how to step in.

Identifying Capacity on a Spectrum

Sometimes a person loses the ability to make decisions for themselves suddenly after experiencing a crisis, like a stroke, fall or other traumatic injury, but capacity can also decline gradually, where support becomes increasingly necessary long before a court may find that person legally incapacitated. Capacity relates to whether a person can understand information relevant to make and communicate decisions, appreciate the consequences of their financial and/or medical decisions, and resist the undue influence of others.

In real life, families may notice small changes long before there is a formal determination of incapacity, and a person’s ability to make decisions on their own can fluctuate based on time of day, nutritional needs, or a treatable underlying condition, such as a urinary tract infection. Moreover, a medical diagnosis, such as early dementia, Parkinson’s or MS does not preclude a person from actively making their own decisions.

When capacity occurs gradually, adult children and spouses often find themselves quietly compensating for a loved one who is declining. Perhaps they take over bill paying, attend appointments to get clear answers, monitor medications, or step in during emergencies. This is incredibly difficult for the family members supporting a declining loved one because they are often struggling emotionally with the idea that their loved one is declining, and they aren’t sure how to help while recognizing lifelong relational boundaries.

Supportive Planning

Many people fear giving up control, or finding themselves in a situation where they cannot make day-to-day decisions. This underlying fear creates a natural tension in families where one party wants to preserve their autonomy while the other wants to intervene for fear that something bad will happen to their loved one. When we empower clients who are managing a changing health circumstance with the ability to name supportive decision makers in their legal plan, it can offer them the opportunity to feel supported, rather than contributing to that tension. When clients are open to the conversation, they can control their destiny by selecting the right people to help them navigate a new stage of life, and ensure they are authorized to act appropriately without fear that they will either make a poor decision to their detriment, or abandon control prematurely.

Early, honest, respectful and supportive intervention can make a significant difference for families navigating the gray area of declining capacity. In many cases, a person experiencing cognitive or physical decline does not immediately lose the ability to make decisions. Instead, they may begin needing more support managing finances, understanding complex transactions, attending appointments, or recognizing risks. During this period, supportive intervention can allow trusted individuals to assist without removing the person’s dignity, independence, or participation in decision making. Co-Trusteeship in conjunction with carefully drafted powers of attorney can allow a trusted person to begin participating in financial management while the trust creator remains actively involved in decisions.

If a person has a Revocable Trust as part of their comprehensive estate plan, they can name a co-Trustee, who will share the authority to manage trust assets while they are living, and often, that same person will continue to act as Trustee at death, following trust instructions related to ultimate distribution. The durable power of attorney grants that same person authority to manage financial assets, benefits and rights outside of the Revocable Trust. If the durable power of attorney is immediately effective, the Agent may act, without a need for the principal to be deemed incapacitated. Therefore, if a client updates their Revocable Trust to name their adult child as a co-Trustee, and their durable power of attorney also names that person as the immediate agent, the adult child can manage existing accounts, open new account, assist with retitling of assets to ensure proper bill pay and alignment with the revocable trust.

Case Study

Jane is 84 years old. Her spouse died several years ago and she has a close relationship with her two adult children. When she created her estate plan 15 years ago, she named her daughter as her initial successor trustee and her daughter as her second successor trustee. She also established her Will, Power of Attorney and Advance Health Care Directive at that time, naming her children in the same order as decision-makers. Her durable power of attorney is effective upon a finding of incapacity. A few months ago, Jane was diagnosed with early onset dementia. Jane is working with her neurologist on a treatment plan and she and her children are already observing positive changes. Jane is worried about how her children will best be able to assist her as her condition declines, but she has been fiercely independent for her entire life, and she isn’t ready to give up her autonomy.

Jane can consider amending and restating her revocable trust so that her daughter is listed as a co-Trustee, and her son is listed as successor after her daughter. She can also update her power of attorney to make it immediately effective. If Jane has not addressed her estate plan in 15 years, it is likely that her planning should address asset alignment, which is a process of changing ownership and beneficiary designations so that the benefits of the trust are fully maximized to fully eliminate probate. If Jane needs assistance aligning her assets with her plan, her will be authorized under the updated durable power of attorney to update ownership and beneficiary designations on Jane’s behalf.

After Jane establishes her plan, she decides to enroll in the DiPietro Law Bridge Program, which allows her to hold a family meeting with her attorney and her children so that they can discuss how the plan works, what each person’s responsibilities and benefits are, and they can ask questions while everyone has the ability to fully participate in the conversation.

If Jane later loses the ability to make decisions, her daughter is already authorized to continue acting under the terms of the trust. Because Jane’s daughter acted as a supportive decision maker, their relationship grew stronger, and both Jane and her daughter were relieved to know that Jane’s transition occurred on her terms.

The Takeaway

A comprehensive estate plan should incorporate planning for both incapacity and death. However, when we experience or observe a change in our needs, it is important to remember that incapacity is often not a black and white event, and a diagnosis may not be the end of our planning, rather an opportunity for our plan to evolve as our circumstances change.

Leslie Case DiPietro( Attorney )

Leslie Case DiPietro Inspired by her own family’s experience navigating a long term care crisis with her father, Leslie shifted her professional focus exclusively to estate planning and elder law. As the founder of DiPietro Law, LLC, she now helps families create comprehensive estate plans that promote family harmony, avoid probate, reduce taxes, protect needed benefits, and shelter assets from the cost of long term care.

Read Leslie’s full bio here.