Long-Term Care Planning: Guardianship
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While many people planning their long-term care see the value of living trusts, online wills, and other financial instruments; guardianship has few advocates because it is a costly and often demeaning process for the person, whose frailty and inabilities to manage have to be presented in court.
Court-appointed guardianship (or conservatorship) does have a role in protecting the property and decision making for older adults who are unable to make decisions themselves and do not have natural advocates such as a trusted family member with authority to make decisions.
Generally, guardianship is used as a last resort when the person has failed to plan for their disability and now needs the help of someone else to make important decisions about their care and finances. This sometimes necessary court process can be costly and unpleasant. Having a stranger appointed as guardian introduces another element into an already difficult situation.
Even if the court-appointed guardian is a family member, the responsibilities of being a guardian are more onerous than simply being a caring child or nephew. You will be required to report periodically to the court about how you are spending the money and how you are caring for the incapacitated person. You have a fiduciary duty to properly manage the resources for the benefit of the family member.
Following are the two kinds of guardianship:
Guardianship of the estate: Having authority to manage money and other assets; this is called conservatorship in some states
Guardianship of the person: Having the responsibility to make healthcare and other decisions that affect the well-being of the person
Guardianship situations usually arise when a person is mentally ill, has an intellectual disability, advanced dementia, or otherwise lacks capacity. Courts determine capacity in different ways, depending on state law, but it generally involves a legal finding that a person cannot make certain kinds of decisions. Capacity is specific to the task or decision. Someone may have capacity to make healthcare decisions but not to manage money.
If there is conflict among siblings, for example, over whether a parent's assets should be used to hire home care workers, or to place the parent in a nursing home, one sibling may file a guardianship petition to be able to make the decision. The court may appoint one person or co-guardians.
If no family member or friend seems to be an appropriate guardian, or the family situation appears irrevocably torn, the court may appoint a person outside the family to take on this role. It could be a private professional guardian, public guardian, volunteer, or attorney.
Although the guardian is required to act in the person's best interests or expressed interests, sometimes courts do not fully investigate the background of the guardians they appoint, and their shortcomings are realized only after they have committed fraud or abused or neglected their wards.
Money matters and legal issues are complicated. Don't make any decisions without consulting an experienced attorney.