I get a handful of questions regarding the disability panel, and when and how to use it. Although you may not use it very often, it is extremely helpful to have a disability panel in place for your clients should you ever need it. Your clients and their family members will be happy to avoid obtaining opinions from two licensed physicians as well as to avoid court intervention whenever possible.
WHAT IS IT? The purpose of the disability panel is to remove a Grantor as Trustee if he or she is no longer able to manage the Trust property competently. It is important to note that the disability panel determination only applies to the Grantor in his or her capacity as Trustee and does not hold any weight or significance over non-Trust assets or other legal matters outside of the Trust. In joint Trusts, each Grantor sets his or her own disability panel; in other words, spouses do not need to choose the same individuals. Most importantly, the Grantor can always change the members serving on his or her disability panel, as the power of appointment in the iPug™ trust specifically lists that as one of the things the Grantor can modify.
WHERE IS IT? The option to include a disability panel appears in Enhanced Trust plans and the Personal Care Plan (or Living Will, whatever you choose to call it). In the Revocable and Irrevocable Trusts, it is located in Article Two, toward the end. In the Personal Care Plan, it is in the first couple of paragraphs before the client starts listing personal preferences. There are also references to the disability panel in the incompetency, incapacity, and disability definitions in the last Article of the Trusts. Those sub-sections state, in relevant part: “. . . an individual may be treated as legally incapacitated or disabled [or incompetent] if . . . the individual has been declared as such by a disability panel authorized to issue said declaration by the individual.”
WHO TO APPOINT? Because “competency” and other like terms are subject to some discretion, a disability panel of at least three people is usually preferable, with a majority vote controlling. I explain to clients this should be the people who know you the best, who would know you are not quite yourself anymore, and will recognize that your decision making is not what it used to be, or out of character in some way. I also encourage a back-up or two, just in case an initial panel member predeceases the Grantor. Most often, I find clients choose their spouse, and adult children, if any. If none, they tend to pick siblings, other family members, or close family friends. Occasionally, clients choose their primary care physicians. That is fine, especially if the client has gone to that physician for years and years. However, the point of a disability panel is often to avoid the need for a doctor’s declaration of incapacity, as they are busy and sometimes hesitant to declare a patient “incapacitated.”
HOW DO I USE IT? In the relatively rare circumstance where a Grantor does not step-down prior to becoming incapacitated, you can execute a disability panel determination. I do this using a separate document that: 1) states when the Trust was created and by whom; 2) cites to the disability panel section in the Trust and explains what it requires; 3) names the disability panel members and states they hereby attest to the incompetency/incapacity of the Grantor-Trustee; and 4) includes signature lines for the relevant members of the disability panel to sign in the presence of a notary public.