When Can Someone Be Declared Legally Incompetent?

If a loved one is experiencing memory loss or suddenly making poor decisions, you may be in a situation where it becomes necessary to ask the probate court to appoint a guardian and/or a conservator for them. This is a complicated process, so we strongly encourage our clients who are considering this route to consult with us first to learn exactly what will be involved and whether there are any good alternatives.  

If a loved one is unable to make decisions for him or herself, the court may appoint a substitute decision-maker,  called a “guardian.” If a loved one is unable to manage their financial affairs and assets, the court may also appoint a “conservator” to handle their money and property. A guardian and/or conservator is only appointed as a last resort if less restrictive alternatives, such as a power of attorney, are not in place or are not working.

Our goal is always to find the least restrictive alternative. If your loved one still has the mental capacity to sign legal documents, it may be best to consider whether they can sign a power of attorney, which enables an agent to take action and sign documents on their behalf. A power of attorney has many benefits in that it does not take away or restrict the decision-making authority of your loved one; it also does not require court involvement or reporting. When a court appoints a guardian or conservator, it does take away or restrict the ability of your loved one to make his or her own decisions and also involves ongoing court involvement, reporting, and oversight.

The standard under which a person is deemed to require a guardian differs from state to state. In Michigan,  the court must find by clear and convincing evidence that the individual lacks the understanding or capacity to make or communicate informed decisions, and that appointment of a guardian is necessary to provide the individual with the necessary care and supervision.

In order to grant a conservatorship, the court must find that the individual is unable to manage his or her property and affairs effectively due to mental or physical illness, disability, mental deficiency, chronic usage of drugs or alcohol, or confinement, among other reasons. The court also must find that the individual has property that will be wasted or dissipated unless properly managed, or that the property is necessary for the person’s support or those entitled to his or her support, and management is necessary to safeguard needed support from the individual’s resources.

In making this determination, the court requires evidence and testimony be presented and that the individual have the opportunity for a hearing and representation by legal counsel. In addition, the court will appoint a “visitor” or “guardian ad litem” to meet with the individual to explain their rights and prepare a report to the court.   This can create an uncomfortable and confusing situation for both the individual and the family member who may be viewed as trying to take away their rights.

The court usually looks at a number of factors in determining the need for a guardian or conservator, including the following: 

  • Comprehension of important medical or financial information
  • Appreciation of the importance of medical and financial decisions and understanding the effect of those decisions 
  • Ability to make reasonable decisions using the information available 
  • Capacity to communicate decisions in a consistent manner
  • Ability to maintain a safe environment 

A person cannot be declared incompetent simply because he or she makes irresponsible or foolish decisions, but only if the person is shown to lack the capacity to make sound decisions. 

To plan for decision-making in the event of incapacity, it is always advisable to have a good power of attorney and/or trust in place before incapacity occurs; but when that is not an option, it is important to understand how to seek the appointment of a guardian and or conservator. Contact our office for a consultation to learn more about these options and create a  plan that works for you and your family.

If you have specific questions about your situation or would like to learn more, reach out to the team at WBH here.

Read more articles:

You Can ‘Cure’ a Medicaid Penalty Period by Returning a Gift

Anyone who gifted assets within five years of applying for Medicaid may be subject to a penalty period, but that penalty can be reduced or eliminated if the assets are returned.  In order to be eligible for Medicaid, you cannot have recently transferred assets....

The Tax Consequences of Selling a House After the Death of a Spouse

If your spouse dies, you may have to decide whether or when to sell your house. There are some tax considerations that go into that decision.  The biggest concern when selling property is capital gains taxes.  A capital gain is the difference between the "basis" in...

Why Small Business Owners Need an Estate Plan

Running a small business can keep you busy, but it should not keep you from creating an estate plan. Not having a plan in place can cause problems for your business and your family after you are gone.   While an estate plan is important for everyone, it is especially...

Why You May Need a Trust in Addition to a Power of Attorney

While everyone should have a durable power of attorney that appoints someone to act for them if they become incapacitated, in some circumstances, it is not enough. In these cases, a revocable trust can help.  A durable power of attorney allows you to appoint someone...

Medicaid’s Attempt to Ensure the Healthy Spouse Is Not Impoverished: The CSRA

Medicaid law provides special protections for the spouses of Medicaid applicants to make sure the spouses have the minimum support needed to continue to live in the community while their husband or wife is receiving long-term care benefits, usually in a nursing home....

Take These Three Steps When Your Child Turns 18

If your child has reached the teenage years, you may already feel as though you are losing control of her life. This is legally true once your child reaches the age of 18 because then the state considers your child to be an adult with the legal right to govern his or...

How Do You Choose the Right Person for Your Power of Attorney?

A Power of Attorney is a document that authorizes someone to represent and act on your behalf should you not be in a position to do it. The person you name to act on your behalf is known as the “agent.”  Your agent may need to sign contracts, handle investments, sell...

Medicaid’s “Snapshot” Date and Its Crucial Impact on a Couple’s Financial Picture

When a married couple applies for Medicaid, the Medicaid agency must analyze the couple’s income and assets as of a particular date to determine eligibility. The date that the agency chooses for this analysis is called the “snapshot” date and it can have a major...

Court Case Illustrates the Danger of Using an Online Power of Attorney Form

A recent court case involving a power of attorney demonstrates the problem with using online estate planning forms instead of hiring an attorney who can make sure your documents are tailored to your needs. Mercedes Goosley owned a home in Pennsylvania. In 2013, she...

How Much Should a Trustee Be Compensated?

Serving as a trustee of a trust can be a huge responsibility, so trustees are entitled to compensation for their work. The amount of compensation depends on the type of trustee and the complexity of the trust.  Depending on the trust, a trustee’s duties can include...