The purpose of a 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.
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. Your panel members 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. You should also have a back-up or two, just in case an initial panel member predeceases the Grantor.
The point of a disability panel is often to avoid the need for a doctor’s declaration of incapacity or the need to hire an attorney to go to the courthouse to have the Grantor declared incompetent. The last thing your loved ones or beneficiaries want to deal with during a time of crisis is a court process to have the Grantor declared incompetent. Not only does the Disability Panel save the time and expense of a court process, but it also saves the dignity of the Grantor. Likewise, the Grantor is given the opportunity to pick the people who they trust to make the decision rather than depending on doctors and judges that are strangers to the Grantor.