How to Choose the Right Agent for Your Incapacity Plan from Austin Estate Planning Attorney Liz Nielsen


Many people believe that estate planning is only about planning for their death. But planning for what happens after you die is only one piece of the estate-planning puzzle. 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 (in other words, if you become incapacitated). Meaning, choosing the right trusted help, or agent, to act on your behalf is incredibly important to any complete estate plan. But first, what exactly is incapacity and why should it matter?

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 money and property (known in Texas as a Guardian of the Estate) and to make some or all personal and medical decisions for you (known in Texas as a Guardian of the Person) under court-supervised guardianship proceedings.

The guardian of the person or estate may be the same person, or there may be two different people appointed to these roles. In Texas, a Guardian of the Estate will need to provide an accounting of all financial transactions during the year, and is also typically required to obtain court permission before entering into certain financial transactions (such as mortgaging or selling real estate).

Similarly, the Guardian of the Person may be required to obtain court permission before making life-sustaining or life-ending medical decisions, if there are no advance directive or do-no-resuscitate (DNR) documents already signed. The court-supervised guardianship 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?

For Texans, the guardianship 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 crafted for yourself. Most importantly, state statutes may give priority to  certain individuals to act as your guardian, despite them not being the person you would have selected, had you engaged in proactive planning.

Rather than having a judge appoint these important decision-makers for you, your incapacity plan allows you to appoint 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 day-to-day and healthcare decisions.
  • How organized is the agent? Your agent 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 agent has a demanding job or travels frequently for work, then the agent 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. Keep in mind that you can appoint different people for these different roles.

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 appointed on your behalf. This would be a hassle, taking time and costing money during what is already likely to be a very stressful and emotional time.

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. This would also be a great opportunity to discuss with them your wishes as to the medical and financial issues that are most important to you.

Our firm is ready to answer your questions about incapacity planning and assist you with choosing the right agents for your plan. Nielsen Law PLLC provides family-focused estate and business planning to individuals and families in Austin, Round Rock, Cedar Park, and the Central Texas area.  For more information, and to learn about our firm, please contact us. We look forward to working with you.