What Breaks in the First 72 Hours
When a Georgia business owner becomes incapacitated — whether from a stroke, a serious accident, or a progressive cognitive condition — the operational consequences arrive before anyone has contacted an attorney.
Within the first 72 hours: the owner cannot sign checks. They cannot execute contracts. They cannot make payroll if the business account requires their signature. They cannot respond to clients who need a decision. They cannot terminate or hire employees. The business has a functioning operation but no one with legal authority to make binding decisions.
Unlike death, where the executor eventually gets Letters Testamentary and can act, incapacity creates a situation where the owner is still alive and still legally in control — but cannot exercise that control. No one else has automatic authority to step in. Not a spouse. Not a business partner. Not an adult child. Not a longtime key employee.
What Georgia Law Says About Incapacity and Business Authority
Under Georgia law, an incapacitated individual retains their legal rights — including their rights as an LLC member or business owner — until a court formally removes those rights through a guardianship or conservatorship proceeding. Until that happens, no one else has legal authority over the business.
A durable power of attorney gives an agent authority over the owner’s personal financial matters. Whether that authority extends to LLC management depends on what the operating agreement says. Most Georgia operating agreements are silent on incapacity — they name no one with management authority during a living owner’s incapacity, and they do not define what standard triggers a management transition. See LLC operating agreement succession problems in Georgia for why this gap exists in most formation-era agreements.
The Guardianship and Conservatorship Path — and Why It Fails Businesses
If the owner has no incapacity plan, the only legal path to appointing someone with authority is a guardianship (authority over personal decisions) or conservatorship (authority over financial decisions) proceeding in the Superior Court.
This process has four problems for a business owner:
- Timeline: A guardianship or conservatorship proceeding takes 3 to 6 months at minimum. During that entire period, the business has no authorized decision-maker.
- Cost: The proceeding requires attorneys for the petitioner, a guardian ad litem for the incapacitated owner, and often a physician evaluation. Total cost runs $5,000 to $15,000.
- Public record: Guardianship proceedings are public. Clients, vendors, and competitors can search the court record and discover the owner’s incapacity and the legal uncertainty about who controls the business.
- Wrong result: The court appoints a guardian or conservator, but that person may not be the person best positioned to manage the business. Courts prioritize family members, not business competence.
Two coordinated documents prevent the guardianship path entirely:
Durable power of attorney with business authority: A durable power of attorney that specifically grants authority over LLC management — not just personal financial matters — gives the agent immediate authority from day one of incapacity. The operating agreement must recognize this authority. Without the operating agreement coordination, the POA authority stops at the LLC boundary.
Operating agreement incapacity provision: The operating agreement must define three things: (1) what standard triggers the management transition (typically a physician determination of incapacity), (2) who has interim management authority during the incapacity period, and (3) what authority that interim manager has — specifically, whether they can sign contracts, hire and fire, and access business accounts.
Together, these two documents give a named person immediate, legally recognized authority to manage the business from the moment the owner cannot. No court. No petition. No 3-to-6-month waiting period.
The Role of the Revocable Trust in Incapacity Planning
The revocable living trust adds a third layer of incapacity protection. When the LLC membership interest is held in the trust, the successor trustee has authority over the trust assets — including the LLC interest — during the owner’s incapacity. The successor trustee can manage the trust, direct the LLC as the member, and coordinate with the agent under the POA.
The trust does not replace the operating agreement incapacity provision — both are needed. The trust addresses management of the membership interest. The operating agreement addresses day-to-day business operations. These are different authority questions that require different documents.
A Complete Incapacity Plan for a Georgia Business Owner
A complete incapacity plan for a Georgia LLC owner requires four coordinated documents:
- Revocable living trust — holds the LLC membership interest; successor trustee has immediate authority during incapacity
- Durable power of attorney with business authority — gives the agent authority over the owner’s personal financial matters and, through operating agreement coordination, LLC management authority
- Operating agreement incapacity provision — defines the trigger standard, names the interim manager, and specifies their authority
- Healthcare directive — addresses medical decisions separately from business decisions
The complete succession plan covering both incapacity and death costs $8,000 to $10,000. See the full pricing breakdown.
